Employees’ Salaries of Loss Making Pakistan Steel Still Over Rs. 100 Million a Month

The Economic Coordination Committee (ECC) of the Cabinet was informed on Tuesday that the salaries of the loss-making Pakistan Steel Mills employees have been reduced from Rs. 360 million per month to around Rs. 104 million per month due to retrenchment. Caretaker Finance Minister Dr Shamshad Akhtar chaired the meeting of the ECC of the Cabinet. The committee considered a summary of the Ministry of Industries for disbursement of salary of PSM employees for FY24. The PSM is a wholly owned entity of the government of Pakistan. It started incurring losses from the year 2008-09 and its accumulated losses climbed to Rs. 206 billion till June 30, 2022. The government has been providing funds for the net salaries of PSM’s employees since 2013 while the production operations of PSM have been suspended since June 2015 therefore the entity does not have adequate financial resources to pay the salaries of its employees. In the wake of the privatization process of PSM, the government decided to retrench the PSM’s employees and so far 5,679 employees have been retrenched and approximately 3,100 employees are working. Due to the retrenchment of the employees, the salaries of the employees have been reduced from Rs. 360 million per month to around Rs. 104 million per month. Moreover, PSM has filed a petition in the Labor Court Karachi for retrenchment of the remaining 50 percent workforce. Under the Industrial and Commercial Employment (Standing Orders) Ordinance, no employer shall terminate the employment of more than 50 percent of the workmen or close down the whole of the establishment without prior permission of the Labor Court. On the other hand, it has become mandatory for all ministries to ensure disbursement of monthly salary as per the Supreme Court order so salary should be released till implementation of the complete human resource retrenchment plan. The Ministry of Industries asked ECC to approve the payment of a projected net salary of Rs. 1,244 million for FY24 to be disbursed according to the salary demand of PSM for every month from the already approved budgetary allocation of Rs. 10 billion. After detailed discussion and deliberation, the ECC authorized the Finance Division to approve the payment of projected net salary for the first 6 months of FY24 to be disbursed according to the salary demand of PSM for every month from the already approved budgetary allocation of Rs. 10 billion.