Sindh industries challenge minimum wage hike to Rs25,000

KARACHI: Sindh industries, especially from Karachi, have stood up against the provincial government’s decision to increase minimum wage from Rs17,500 to Rs25,000, warning of mass closures due to cost spikes, a statement said on Wednesday.

“The decision has been taken without following the laws in place and does not conform to the provisions of provincial wage act and ILO’s (International Labour Organization) minimum wages fixation convention 1970,” said a joint statement issued by the trade bodies of the province.

“This move has deprived the industries of Sindh from level-playing field not only locally but also globally, making them uncompetitive and unviable to operate because of a high cost of manufacturing as wage is its major component.”

This joint statement was issued by the Federation of Pakistan Chambers Of Commerce & Industry (FPCCI), Karachi Chamber Of Commerce & Industry (KCCI), Pakistan Hosiery Manufacturers & Exporters Association, SITE Association of Trade & Industry, and other associations.

It said this action was unconstitutional and it had compelled the industrialists to plan and shift their industries to other provinces or abroad.

“The national economy will be severely impacted as the share of Karachi industries in national exports and revenue generation will plunge as a result of this decision.”

The gravity of the situation shall lead to massive layoffs, unemployment and law & order situation, the business community said in the statement.

“Trade organisations see the Sindh Government's Notification No.L-II-13-3/2016 dated 9th July, 2021 to fix minimum wage of Rs25,000 as unjustified and unreasonable executed in noncompliance of the due process of law, contrary to the Sindh Minimum Wage Act 2015 and sidelining the jurisdiction of minimum wage board and without consulting stakeholders - the employer representatives,” they said.

Fixation of minimum wage of Rs25,000 would proportionately increase and multiply the variable cost on account of the employers’ contribution in the EOBI and SESSI, the industrialists said.

They said the Sindh government had created a huge disparity as minimum wage in the center and Punjab province was Rs20,000 and in Khyber Pakhtunkhwa and Balochistan it was Rs21,000.

“The minimum wages fixed by the province of Sindh is not equitable to the employers,” they said.

The trade organizations appealed to the Sindh government to review and reconsider the decision as per the relevant laws, rules, and procedures in the best interest of Sindh province, people of Sindh and its industries. They said otherwise industries would be shifted to other provinces and no new industries would be established in Sindh, which would cause mass job losses and a huge decline in revenue generation.