A worker transferred by the same bank from Karachi to Lahore on Friday reports for duty on Monday with the same employer, the same years of service and the same family to support. Which government should pay a scholarship already approved for that worker’s daughter? Which board should receive an application lodged a day after the transfer? Governments have spent sixteen years arguing over who may collect the money. A workable answer to either question would tell workers more about the value of devolution.
On November 4, 2026, the Federal Constitutional Court (FCC) of Pakistan heard both sides in the litigation over provincial Workers’ Welfare Fund demands on trans-provincial establishments and reserved judgment. The author appeared for the respondents. The case raises a question that should concern trade unions as much as the banks before the Court. When a province identifies a branch and employees within its territory, what gives it authority to measure a welfare contribution by the income of the integrated enterprise? The answer determines both what the employer owes and which institution workers may hold to account.
Earlier published work by this author, including “Labour welfare laws & role of state” and “There’s need to remove confusion — II”, identified the constitutional mistake in treating the devolution of labour as the devolution of workers themselves. Events since publication give that argument a practical test.
The Sindh Revenue Board reported Rs. 14.33 billion in combined workers’ welfare and workers’ profit-participation collections for fiscal year 2023–24. The published collection figure tells a family nothing about how much of either fund reached beneficiaries. A government claiming authority to collect should publish the corresponding disbursements, outstanding claims and unspent balances, separately for each scheme. [1–2]
Sindh has a serious constitutional argument. After the Constitution (Eighteenth Amendment) Act of 2010 [Eighteenth Amendment] omitted the Concurrent Legislative List, Article 142(c) of the Constitution assigned residual legislative subjects to the provinces. A worker in Karachi can invoke provincial protections at the workplace even if the employer has branches throughout Pakistan.
However, Article 141 of the Constitution limits a provincial assembly’s legislative territory. Section 5 of the Sindh Workers Welfare Fund Act, 2014 charges a qualifying industrial establishment located in Sindh by reference to its total income.
A branch establishes a local presence. It does not establish what fraction of the bank’s consolidated income belongs to that branch. A demand founded on a severable Sindh operation should identify the statutory unit, the income attributable to it and the rule that prevents an overlapping charge elsewhere. Each is capable of proof. [3]
Section 10(a) of the federal Workers’ Welfare Fund Ordinance, 1971 supplies a distinction largely lost in public debate. It assigns the governing body the function of allocating money under section 9 principles to provincial governments, federal agencies and bodies corporate for specified section 6 purposes. Section 10A makes the allocation a grant-in-aid, vested in the recipient and restricted to the authorised purpose.
Section 11A of the federal Workers’ Welfare Fund Ordinance, 1971 permits a board to administer it. A provincial government can receive money, build workers’ housing and answer for the expenditure under a federal collection scheme. Section 10 sets no automatic provincial percentage. Its weakness for the worker is precisely the distance between a power to allocate and a published timetable against which a worker can demand an explanation for delay. [4]
The strongest judicial argument for the contrary view deserves close reading. In Shafiquddin Moinee v Federation of Pakistan (2018 CLD 1088), Justice Munib Akhtar, now senior judge of Supreme Court, sitting with Justice Omar Sial in the Sindh High Court, addressed workers’ participation in company profits.
Paragraph 34 of Shafiquddin Moinee case applied the Sindh statute to the proportion of workers in Sindh, irrespective of the location of the registered office or industrial undertaking. The calculation began with profits earned throughout Pakistan. The judgment even considered different provincial rates and accepted that workers of one employer could consequently receive different amounts. The Supreme Court subsequently granted leave and suspended the judgment’s operation. That interim order left the merits open. [5]
Consider a company with Rs. 100 million in national profits and one quarter of its eligible workers in Sindh. At a common five per cent rate, Moinee’s approach allocates Rs. 1.25 million to that group. Its attraction is easy to see. A registered office in Lahore cannot deprive Karachi workers of a share in profits they helped earn. Nor does the illustration produce four full levies on the same profit. Its constitutional weakness emerges when one asks who defines the denominator.
The answer depends on employees outside Sindh, their eligibility under the scheme and the national profit figure. If provinces use different eligibility rules or count a transferred worker on different dates, even an honest employer can omit someone or count that person twice. Paragraph 34 explains the amount payable once a common national account is assumed. It leaves the legal source and reconciliation of that common account unresolved. [5]
There is a further obstacle to importing Moinee Case into this litigation. Profit participation allocates part of a particular company’s profits among eligible workers. WWF finances statutory welfare purposes through a pooled fund. A worker’s headcount share of company profits can assist with the first calculation. It supplies no warrant for collecting two per cent of a trans-provincial bank’s income under the second enactment. Likewise, Workers’ Welfare Fund v East Pakistan Chrome Tannery (PLD 2017 SC 28) decided that the federal contribution was outside the tax basis invoked for the Money Bill amendments before the Court. That ruling on legislative procedure did not award the levy to either tier of government. [3–6]
Justice (retired) Qazi Faez Isa sought assistance from a particularly well-placed amicus when, as Chief Justice of the Balochistan High Court, he heard Pakistan Workers Federation, Balochistan v Government of Pakistan (2014 PLC 351). Mian Raza Rabbani had chaired the parliamentary committee responsible for the Eighteenth Amendment. His recorded submission was precise.
Parliament retained authority over matters within a federal entry, including qualifying inter-provincial institutions. Article 38(a) charged the State with securing an equitable adjustment between employers and employees. Under Article 7 the institution answering for that duty depended on the constitutional field. Justice Faez Isa subsequently revisited those submissions in Sindh Revenue Board v Civil Aviation Authority (2017 SCMR 1344). The latter was a services-tax case. Its value here lies in its account of how the amendment works. [7]
Sui Southern Gas Company Ltd v Federation of Pakistan (2018 SCMR 802) brings the argument closer to the worker. The Supreme Court upheld federal industrial-relations legislation for trans-provincial establishments and unions, recognising the practical constitutional difficulty of exercising an Article 17 of the Constitution right across provincial lines under laws confined to one province each.
WWF raises a distinct monetary question. Article 38 lends purpose to the argument, while the inter-provincial entry and territorial limits supply its legal footing. Article 270AA(6) continued existing laws until a competent authority altered them. In deciding who could displace the 1971 Ordinance for an integrated undertaking, identifying that authority is the very point in dispute. [7–8]
The provinces themselves confronted the transferred worker’s predicament at the Council of Common Interests (CCI). On December 23, 2019, the CCI recorded the absence of a workable mechanism for migrating employees’ pensions. Its annual report records both the decision and the clarification retaining WWF federally pending a mutually agreed mechanism.
The Sindh High Court subsequently relied on that arrangement and preserved the opportunity for a proper challenge to legislative validity. Article 154(7) of the Constitution gives a dissatisfied government recourse to Parliament in joint sitting. A provincial assessment cannot perform that constitutional function. Equally, the CCI cannot amend the legislative lists. Its decision matters because the governments collectively identified a real problem and agreed how to proceed pending its resolution. [9]
There have since been political discussions about transfer. In July 2026, a National Assembly standing committee still sought documentation on devolution and a financial audit of WWF. Those developments make a straightforward demand of both Islamabad and the provincial capitals. Publish any successor agreement, its effective date, the treatment of accrued claims and the arrangements for workers moving across a boundary. Publish also what happened to the money already collected. Federal custody deserves exactly the scrutiny demanded of provincial collection. [10]
Article 140A of the Constitution gives provincial autonomy a second direction. Provinces must devolve political, administrative and financial responsibility and authority to elected local representatives. In MQM (Pakistan) v Pakistan (PLD 2022 SC 439), the Supreme Court struck down provisions of Sindh’s local government law that impaired meaningful devolution.
Sixteen years after the Eighteenth Amendment, a province demanding money from the centre owes its own districts an account of the power and resources it has passed on. A workers’ housing scheme provides a tangible test. Publish the district allocation, completed dwellings, occupied dwellings and waiting time. Workers can then judge the performance of each government involved. [11]
Other countries offer choices for Pakistan. In the United States, payroll contributions support separate federal trust funds for retirement and survivors’ benefits and for disability insurance. In Great Britain, the National Insurance Fund pays the State Pension and other contributory benefits subject to eligibility rules. Neither arrangement makes payroll contributions alone sufficient for universal coverage.
A casual labourer with gaps in registered employment has the greatest need for a pension floor and the least opportunity to build a continuous contribution record. A Pakistani universal floor would require an explicit budgetary commitment, alongside portable contributory entitlements and provincial delivery. WWF’s income-based contribution, profit participation and old-age insurance would each need separate accounts and a lawful transition. [12]
Whatever the reserved judgment concludes about legislative power, governments can already tell workers where to claim and publish what they owe. For a trans-provincial employer, the defensible statutory settlement is one collection on a defined base, a published distribution formula agreed through the CCI, provincial responsibility for delivery and a claim record that follows the worker. Give workers’ representatives access to the accounts and a forum in which to challenge a refusal. Then the daughter whose parent changes branches can ask when her scholarship will arrive, and one identifiable public body will owe her an answer.
Endnotes
- Labour welfare laws & role of state, Minute Mirror • There’s need to remove confusion — II
- Sindh Revenue Board, Annual Report 2023–24, SWWF and SWPPF collections
- Sindh Workers Welfare Fund Act, 2014, sections 2 and 5 • Provincial Assembly, 2026 amendment
- Pakistan Code, Workers’ Welfare Fund Ordinance, 1971, sections 4, 6, 9–11A
- Shafiquddin Moinee, 2018 CLD 1088, especially paragraphs 33–34 • Appellate leave and suspension order reproduced in earlier analysis
- WWF v East Pakistan Chrome Tannery, PLD 2017 SC 28, particularly paragraph 23
- SRB v Civil Aviation Authority, 2017 SCMR 1344, paragraphs 34–35, recounting the amicus submissions in 2014 PLC 351
- Sui Southern Gas, 2018 SCMR 802, especially paragraphs 19–23
- CCI Annual Report 2019–20, agenda item CCI.14/1/2019 and subsequent clarification • Sindh High Court, 2026 SHC KHI 996, reproducing earlier order
- Dawn, Sindh and federal discussions on devolution • National Assembly standing committee, 6 July 2026
- MQM (Pakistan) v Pakistan, PLD 2022 SC 439
- US Social Security Administration, the two trust funds • HMRC, Great Britain National Insurance Fund Account 2024–25