New PIA act strips workers of civil service protection

ISLAMABAD:

Just 10 days after a joint sitting of parliament unanimously approved the Pakistan International Airlines Corporation Conversion Act, a fresh controversy has emerged over the status of the national flag carrier’s employees.

The Senate Standing Committee on Finance on Thursday pointed out a clause in the act through which the government has withdrawn civil service protection previously available to PIA employees.



The issue came to light during Privatisation Secretary Ahmad Nawaz Sukhera’s presentation to the panel on PIA’s privatisation and the status of the airline’s workers.



Pakistan Muslim League Quaid (PML-Q) Senator Kamil Ali Agha challenged the secretary’s claim that PIA employees’ rights were fully protected under the corporation conversion act. He read out sub-clause 3 of the act’s clause 6 which stated that “employees of the company shall continue to be governed by non-statutory contractual terms, conditions, rules and regulations, which shall not acquire the status of statutory terms.”

By withdrawing the statutory status, the government has withdrawn protections available to PIA employees which are enjoyed by other civil servants in the country, said the Senate panel’s legal adviser Mohsin Kamal.

He said the statutory status allows employees aggrieved by an action of the employer to seek remedy from a high court by invoking Article 199 of the Constitution. Under the new status, this right of the employees has been withdrawn, the adviser told the panel.



“An aggrieved employee can now only approach a civil court against the employer,” Kamal said, adding that this also happened in the case of Pakistan Telecommunication Limited (PTCL) following privatisation. “The language of the PTCL and the PIA conversion acts is the same.”

Senator Agha endorsed Kamal’s position, but the privatisation secretary contested it and said the committee was being misled. Panel chairman Senator Saleem Mandviwalla subsequently asked the secretary to seek a legal opinion on this matter.



Mohsin Kamal said the new act can be challenged in the Supreme Court under Article 184(3) of the Constitution to restore the employees’ statutory status. Before it was passed by parliament, the Senate Standing Committee on Finance had recommended retaining the statutory status for PIA employees.

The privatisation secretary also briefed the panel on the status of PIA’s privatisation. He said the changes introduced in the PIA conversion act had shifted certain goalposts. This, he added, meant that the transaction structure framed earlier by financial advisers for PIA’s privatisation could not be used.

Parliament has imposed restrictions on the powers of the federal government to pass orders for the transfer of assets. The management of PIA Company and any of its subsidiaries will rest with the majority shareholder, which will be the federal government and its share will not be less than 51%, according to an explanation inserted in clause 4 of the Act.



The government had originally wanted to hand over management control to the strategic buyer. However, opposition parties did not agree to this.

Due to political back-pedalling, the environment for privatisation is no longer conducive. Prime Minister Nawaz Sharif has already shelved the power sector privatisation plan and the government is now focusing on restructuring the sector.

Published in The Express Tribune, April 22^nd,  2016.