Finance Division refuses to pay dues of retired PSM employees

Says gratuity, PF and leave encashment are not liability of federal government

ISLAMABAD: The Finance Division has refused to pay Rs15.8 billion worth of dues of retired employees of Pakistan Steel Mills (PSM) on account of gratuity, provident fund and leave encashment, saying it is not the liability of the federal government.

PSM has been shut since 2015 when Sui Southern Gas Company (SSGC) stopped gas supply over delay in payments during the tenure of previous Pakistan Muslim League-Nawaz (PML-N) government.

Since then, the federal government has been paying salaries to employees of the sick unit. However, the latest development came as the court directed the Ministry of Industries and Production to pay billions of rupees worth of dues to retired employees of PSM.

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Sources told The Express Tribune that the Ministry of Industries had informed economic managers that PSM had not been able to pay dues on account of gratuity, provident fund and leave encashment to its retired employees outstanding since May 2013, which resulted in protracted litigation.

Around 3,000 PSM employees out of the total of 4,682, who retired on or before December 31, 2018, filed petitions in the Sindh High Court for releasing their outstanding dues. The court, in its order on August 16, 2018, directed all concerned ie the Ministry of Industries and the Privatisation Commission to resolve the issue of payments within 90 days from the date of order on November 15, 2018.

Total outstanding dues on account of gratuity, provident fund and leave encashment of the PSM employees retired on or before December 31, 2018 including those of the petitioners were Rs17.135 billion.

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Of that, Rs1.266 billion had already been paid to heirs of the deceased employees and Rs15.869 billion was outstanding.

The Ministry of Industries further said the Finance Division in its comments conveyed that the outstanding dues were not a liability of the federal government and there was no budgetary allocation for the purpose in financial year 2018-19 or financial year 2019-20.

The ministry requested the Economic Coordination Committee (ECC) to consider the matter and issue directives for the release of Rs15.8 billion to avoid contempt of court proceedings.

During discussions, the ECC meeting observed that the number of PSM employees was quite large and the federal government had very limited fiscal space after the NFC Award.

The ECC directed the Ministry of Industries to obtain legal opinion from the Ministry of Law and Justice on the payment of dues of retired employees by the federal government from the federal consolidated fund in accordance with the order of the Sindh High Court.

Published in The Express Tribune, July 5^th, 2019.

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