Workers’ Welfare Fund

The Workers’ Welfare Fund Ordinance 1971, providing the rules and regulations for proper functioning of the WWF was promulgated by the federal government in December 1971. The purpose of the WWF is to finance housing estates or construction of houses for workers, along with financing other programmes for the welfare of workers, such as provision of marriage and death grants, education, trainings, and skill enhancement. Money in the fund can be used for: (i) the financing of projects connected with the establishment of hous- ing estates or construction of houses for the workers; (ii) the financing of other welfare measures including education, training, and apprenticeship for the welfare of workers; (iii) the meeting of expenditure in respect of the cost of management and administration of the Fund; (iv) the repayment of loans raised by the govern- ing body; and (v) investment in securities approved for the purpose by the federal government.

The WWF is currently servicing programmes such as housing construction, health service outlets, educa- tional institutions and special funds or commodities provided directly to eligible workers: the death grant (Rs500,000 to family on the death of a worker), mar- riage grant (Rs100,000 per worker), and distribu- tion of tricycles and sewing machines among disabled workers and their family members (on a case to case basis). Housing-related activities include construction of houses and flats, as well as the development of plots. The construction of schools, financing of school-relat- ed expenditures and provision of merit scholarships are the major educational activity of the WWF. Educa- tion is provided free of cost up to the secondary level and scholarships are provided at the post-secondary level. Different types of scholarships are offered under the education component. Merit scholarship stipends range from Rs1,600-3,500. Technical education is also provided and industrial homes have been established for vocational training.

The WWF also runs its own schools, through boards funded from an education cess (of Rs100 per worker per year levied on employers). The schools are run ac- cording to the requirements of the Workers’ Children Education Ordinance of 1972, according to which free education until matric was to be provided to one child of every worker, working in an establishment with 10 or

more employees. The construction of dispensaries and wards, provision of hospital beds, and establishment of kidney centres constitute the main interventions in health.8

The WWF is a federal body linked with the Ministry of Labour, Manpower and Overseas Pakistanis. It is governed by a tri-partite governing body with mem- bers from the government, as well as representatives of both workers and employers. The governing body of the WWF consists of a chairperson and 18 members. Among the members from each province, it is compul- sory that at least one member should be from among the workers, one from among the employers, and one should be appointed on the recommendation of the provincial government. While allocation of funds and monitoring of projects is done at the central level, the Provincial Workers’ Welfare Boards are the imple- menting bodies, and are responsible for executing, maintaining and operating projects.

3.1.3.1 Analysis

a) Targeting efficiency: The eligibility criteria for

individual workers to become beneficiaries in- clude: (i) at least three years of service with an industrial establishment; (ii) fulfilment of the definition of worker given in the WWF Ordi- nance, 1971; (iii) registration with the EOBI or Social Security; and (iv) fulfilment of the definition of the labourer under the Industrial Relations Act, 2009. Funds are released to the provinces based on demand. While the fund is theoretically administered by a tri-partite body, the federal government manages it. The WWF in general has not been administered ac- cording to its mandate with projects such as kidney centres being initiated by certain gov- ernments. Structural issues between the WWF and the boards have also resulted in significant misappropriation and misuse of funds and ex- tremely inefficient allocation of resources, par- ticularly in the housing sector.9 _{In the WWF’s} more than 40 years of operations, only about 20,000 flats have been built for housing. There are serious complaints as to the manner in which the houses/flats and plots have been al- lotted, and questions regarding the eligibility of the beneficiaries have also been raised. Low.

b) Extent of programme coverage: With regard

tion, only 0.4% of the industrial labour force is extended coverage. Moreover, only 60,000 workers or about 1% of those employed in the manufacturing and mining sectors have benefitted from the WWF’s development of plots. In Khyber Pakhtunkhwa, to date 2,892 houses/flats and 1,474 plots have been devel- oped.10 _{A total of 23 Working Folks Grammar} Schools are functional in the province and they are all English-medium schools. In ad-are all English-medium schools. In ad- dition, 13 industrial homes and 4 community centres have also been established. There are 13 dispensaries operational in the province, as well as one hospital and kidney centre each. In Balochistan 2,223 houses and 232 barracks have been developed since the WWF’s incep- tion. In addition, 17 primary schools, 25 mid- dle schools, 9 secondary schools and 3 higher secondary schools have been established. Two industrial homes are also operational. Also, 25 dispensaries are scattered throughout the province, along with 12 bedded wards and 12 hospitals. Overall, 66,000 children are obtain- ing free education in all the schools in Paki- stan, while 67,662 children have benefitted through the post-matric scholarship schemes. About 30,000 industrial workers or their fam- ily members have obtained technical or vo- cational training in different fields under the auspices of the WWF. The WWF has provided free technical education to more than 11,000 workers or their family members in collabora- tion with the Skill Development Councils; free medical treatment to an estimated 1,252,000

workers and their family members under the health schemes; death grants to 11,321 families of deceased employees; and marriage grants to 129,916 daughters/sisters of employees.11 Similarly, 386 tricycles have been distributed among disabled workers and 48 Annual Ex- cellence Awards of Rs100,000 each have also awarded to two outstanding workers from each province. Other welfare measures undertaken include Rs1 billion donated to the Prime Minis- ter’s Flood Relief Fund and Rs50 million worth of food items donated to Sindh in 2011. In 2010-11, total beneficiaries of different WWF programme numbered 19,952 – a significant decrease from the previous fiscal year when 70,403 workers received benefits. The reason of this substantial decline has not yet been de- termined. Low.

c) Degree of ease of access: To access services,

workers must have the social security card or the EOBI card. The WWF maintains that the employer is responsible for spreading aware- ness about the benefits available to the em- ployees, and that it does not have the resources to do this nor is it its responsibility. Awareness about benefits among the workers appears to be low and the means to access them, even lower. Low.

d) Percentage of programme expenditure dedi- cated to benefits: No data available.

e) Adequacy of support: The provision of free

housing and education for workers and their families constitutes a substantial relief meas- ure for those who are able to access it. Simi-

Table 3.2

Workers’ Welfare Fund – Beneficiaries and Disbursement (in Million Rs)

2008-09 2009-10 2010-11

Programmes Beneficiaries Disbursement Beneficiaries Disbursement Beneficiaries Disbursement

Marriage Grant 9,499 473 9,074 495 10,892 762 Death Grant 1,135 307 943 273 809 248 Education Grant 36,314 945 52,746 1,229 8,251 535 Earthquake Affectees 339 17 - - - - Scholarship 15,721 345 7,640 434 - - Total 63,008 2,087 70,403 2,432 19,952 1,546

larly, the amounts allocated for the marriage and death grant are generous. High.

f) Grievance redressal: If employees have a com-

plaint or grievance, they can only approach the employer to take up the case with the WWF on their behalf because they cannot directly ap- proach the fund. The WWF has caretaker of- ficers on their industrial estates and they can be approached by the employers. Only large firms, or firms where the workers are more aware about benefits and are organised, usu- ally end up taking up grievances or the cases of their employees. Low.

g) Extent of self/progressive financing and sus- tainability: According to the Ordinance, the

Fund consisted of: (i) an initial contribution of Rs100 million made by the federal government; (ii) monies paid by industrial establishments from time to time; (iii) voluntary contributions in the shape of money or building, land or oth- er property made to it from time to time by any government or by any person; and (iv) income from the investments made and properties and assets acquired from the Fund. Under the Act, every industrial establishment is supposed to pay a welfare tax at the rate of 2% of the as- sessable income exceeding Rs500,000 in a year.12 _{In addition, the left over amount after} distribution of profit among workers under the Companies Profits (Workers Participation) Act, 1968 is transferred to the WWF. This Act applies to all companies that have 50 or more workers, or a paid-up capital of Rs2 million or more, or have fixed assets valued at Rs4 mil- lion or more. The collected revenue goes to the Federal Consolidated Fund and is later trans- ferred to the WWF via budgetary allocations. The Federal Consolidated Fund is supposed to be credited with receipts of the WWF. There- after, the budget grant of the Ministry of La- bour is to be debited and the funds transferred to the WWF. Most of the money remains static with the Finance Ministry, which does not ad- minister the Fund according to its proclaimed mandate.13 _{An amount of Rs15 billion was col-} lected under the Fund in 2011-12, as opposed to a budgeted collection of Rs25 billion. The collection was, however, complete in 2012-13 when an amount of Rs18 billion was budgeted under the Fund and the same was reported in

revised estimates. The budget estimate for col- lections under the Fund in 2013-14 is Rs21 bil- lion.14 _Medium.

h) Exit mechanisms: Benefits are provided on a

demand basis and the recipients automatically ‘exit’ once the benefit (grants, tricycles, sew- ing machines) has been provided. With regard to education, it is free of cost for the children, but they automatically exit when they reach secondary level, and need to apply for scholar- ships thereafter. High.

i) Degree of impact on MDGs: The WWF, though

designed to benefit low-income workers, does not have a specific poverty focus. However, its components contribute to achieving MDGs 2 and 6, in that they make access to education and health facilities easier.

j) Programme potential to be extended to the RAHA target group: The WWF is specifically

targeted and its benefits cannot be extended to the population at large.