The Companies' Profits (Workers' Participation) Act, 1968

Updated: Monday January 18, 2010/AlEthnien Safar 03, 1431/Somavara Pausa 28, 1931, at 10:39:12 PM

The Companies’ Profits (Workers’ Participation) Rules, 1971

S.R.O. 321 (1)/71.---In exercise of the powers conferred by section 9 of the Companies’ Profits (Workers’ Participation) Act, 1968 (XII of 1968), the Federal Government is pleased to make the following rules, namely,---

1. Short title and commencement.---(1) These rules may be called the Companies’ Profits (Workers’ Participation) Rules, 1971.

(2) They shall come into force at once.

2. Definitions.---In these rules, unless there is anything repugnant in the subject or context,---

(a) “Act” means the Companies’ Profits (Workers’ Participation) Act, 1968 (XII of 1968);

(b) “collective bargaining agent” has the same meaning as in the Industrial Relations’ Ordinance, 1969 (XXIII) of 1969);

3. Establishment of Board of Trustees.---(1) As soon as possible, but not later than two months after the establishment of Fund by a company, the company shall,---

(a) intimate to the Federal Government the names, addresses and other particulars of the two persons nominated by the company to represent the management on the Board to be constituted for the administration of the Fund; and

(b) where there is no collective bargaining agent in relation to the company, hold elections amongst the workers to elect two of them to the Board by the method of single non-transferable vote:---

Provided that, if a collective bargaining agent in relation to the company comes into existence subsequent to the elections, the elected representative of workers shall cease to be trustees as soon as such agent has nominated two persons to represent the workers on the Board.

(2) As soon as possible after the result the elections held under sub-rule (1) is available, the company shall intimate to the Federal Government the names, addresses and other particulars of the workers elected to the Board.

(3) Subject to the provisions of sub-section (3) of section 4, a trustee shall hold office for two years unless he earlier resigns or, in the case of a trustee nominated by the company, his nomination is withdrawn by the company.

(4) The nominee of the company from the accounts branch or, where both the nominees are from the accounts branch, the one designated by the company, shall act as the Secretary to the Fund.

(5) To assist the Board in the performance of its functions, the company shall, at its own expense, provide it with such office accommodation and secretarial staff as the Chairman of the Board may, in accordance with any general or special instructions of the Federal Government in this behalf, require.

(6)

(7) A vacancy in the office of a trustee arising on resignation, death or otherwise shall be filled as soon as possible by the workers or the company, as the case may be, in accordance with the provisions of sub-rule (1).

4. Functions of the Board.---(1) The Board shall meet as soon as practicable after it is constituted and frame regulations governing its procedure:---

Provided that any regulation framed by the Board shall, to the extent it is repugnant to any of the provisions of the Act or these rules or any directions of the Federal Government given thereunder, be void.

(2) The regulations framed by the Board under rule (1) may, in particular, prescribe,---

(a) the manner of holding annual meeting of the Board after the working results of the company have been made available to determine the allocation of shares in the Fund to individual workers;

(b) the procedure for holding extraordinary meetings to consider individual cases of forfeiture of the shares of workers in the Fund;

(c) the appointment of an Executive Committee, consisting of an equal number of members representing respectively the workers and the management of the company, to transact all the day-to-day business of the Board, including the receipt and disbursement of moneys and securities and entering into any proceedings on behalf of the Board, subject to such conditions and limitations as the Board may decide;

(d) the procedure for decision on any question through circulation of papers to all trustees where it is not convenient or practicable to hold a meeting of the Board;

(e) the quorum and requirement of notice for the meetings of the Board; and

(f) the entrustment to the Secretary of the functions relating to maintenance of the office and records of the Board.

(3) The trustees shall not be entitled to any remuneration for their services as such but the reasonable cost of their travel for attending meetings of the Board shall be borne by the company.

(4-A) Duties of the Secretary to the Fund.---It shall be the duty of the Secretary to the Fund,---

(a) to hold the meeting of the Board for the allocation of the Fund as soon as practicable, but not later than thirty days after the constitution of the Board;

(b) to prepare a list of the workers eligible to the benefits of the scheme showing their average monthly wages computed in the manner set fort in paragraph 4 of the Schedule to the Act;

(d) to furnish information to the Federal Government, in the proforma as at Annexure III, within one month of the annual allocation of the Fund; and

(e) to transfer any amount, left out of the annual allocation, to the Fund constituted under section 3 of the Workers’ Welfare Fund Ordinance, 1971 (XXXV of 1971), within fifteen days after the annual allocation as required under paragraph 4(d) of the Schedule to the A ct, and furnish to the Federal Government a Photostat copy of the treasury challan showing the transfer of the said amount.

5. Maintenance of accounts.---The procedure for maintenance of accounts and determination of annual and long-term benefits to the workers shall be, as far as possible, in accordance with the Model Procedure set out in Annex I appended to these rules.

6. Limitations as to the power of the trustees.---No trustee shall have any right to vote or take a decision as such trustee upon any matter relating solely to himself or to any of his rights or benefits under the Scheme.

7. Miscellaneous.---(1) All actions and determinations of the Board affecting workers shall be uniform in nature as to all workers similarly situated and nothing shall be done or omitted in the administration of the scheme which may unreasonably discriminate in favour of, or against, workers who are officers, shareholders or supervisors.

(2) Neither any income of, nor benefits due to, the workers under the Scheme may be assigned, hypothecated, exchanged or sold:---

Provided that nothing in this sub-rule shall be deemed to prevent:---

(a) a worker from nominating any person to receive, in the event of the worker’s death while in the employment of the company, the net asset value of the units standing in the worker’s name, or

(b) a person so nominated from in any way transferring any interest in the Fund developing upon him by virtue of such nomination.

(3) A worker shall, as soon as may be after he has become eligible to the benefits of the Scheme, send to the Board a nomination in writing conferring on one or more persons the right to receive, in the event of the worker’s death while in the employment of the company, the net asset value of the units standing in his name.

(4) If a worker nominates more than one person under sub-rule (3), he shall specify in the nomination the share payable to each of the nominees in such manner as to cover the entire net asset value of the units standing in the worker’s name.

(5) A worker may at any time cancel a nomination by sending a notice in writing to the Board;---

Provided that the worker shall alongwith such notice send a fresh nomination made in accordance with the provisions of sub-rule (3) and (4).

(6) Units shall be transferable by only the Board under the provisions of the Scheme relating to issuance, forfeiture and cancellation of Units.

(7) If the Scheme is, for any reason, discontinued with respect to a company, the Fund shall be distributed among the workers in accordance with the net asset value of the Units credited as on the date of termination, in cash or in securities as the Board may determine.

8. Repeal.---The Companies’ Profits (Workers’ Participation) Rules, 1969, are hereby repealed.

The Companies’ Profits (Workers’ Participation) Act, 1968

The Schedule (Scheme) [See section 2(e)]

Model procedure for the maintenance of accounts of Workers’ Participation Fund