7/29/2019 Ammendment in Labour Laws Through Finance Bill - SHC Judgement

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Sub: Amendments in Labour Laws legislated through Finance Acts.

1) Over the last few years, it has been observed that Amendments in Labour Laws are

legislated through Money Bill presented as Finance Bill. Through Finance Act, 2006; 2007 and

2008; number of amendments was made which in brief are attached in the Appendix.

2) The Division Bench of the Sindh High Court on 26th February 2011; in the case titled

Employers Federation of Pakistan and Others versus Federation of Pakistan relying on the

Judgment of the Supreme Court (reported as PLD 2009 SC 879), has held that an Act of

Parliament is different to and distinct from a Finance Act. All substantial legislation is made by

an Act of Parliament, that is to say, the passing of the relevant bill by the two houses of

Parliament as defined in Article 50 of the Constitution of Islamic Republic of Pakistan, 1973

(Constitution). An amendment made through a Money Bill in any substantive law dealing with

the subject other than what is defined as Money Bill in Article 73(2) of the Constitution would be

valid and effective only for the purpose of making financial provision but would not have the

effect of changing piece of legislation which does not squarely fall within the ambit of scope of

money bill as given under Article 73(2) of the Constitution. Money Bill can originate only in the

National Assembly and after having been passed by the National Assembly and to be forwarded

to the President for his assent and are not required to be passed by the Senate. Therefore it has

to be seen whether the amendments in the Laws fall within the ambit of the provisions of Article

73(2) of the Constitution.

After discussing the Labour Laws referred in the Appendix, it has been held that none of these

Amendments relate to imposition, abolition, remission or regulation of any tax. It has been held

that athough there are valid aims and reasons behind these Amendments, but they cannot be

conferred legitimacy as they were not validly enacted. Consequently the Amendments legislatedthrough Finance Act, 2007 were held as ultra vires, without any lawful authority and of no legal

effect.

3) The effect of this Judgment is that all the referred legislative Amendments referred in the

Appendix; are of no legal effect, as the same principle shall apply for the amendments legislated

through Finance Act, 2006 as well as Finance Act, 2008. It is clarified that no amendment in the

Labour Laws were legislated through Finance Act, 2009 and Finance Act, 2010.

However the only exception will the minimum wages as lastly the increase in Minimum Wages

of Unskilled Workers to Rupees Seven thousand per month was affected under the Minimum

Wages Ordinance, 1962 by the respective Provincial Governments, and not through Money

We may add that legislature following due process either through Ordinance or Act of

Parliament may re-legislate these Amendments and that too with retrospective effect, thereby

nullifying the impact of this Judgment.