Profit participation fund: Audit finds payment of Rs266m to ‘ineligible’ workers

Thursday, February 23rd, 2012 4:25:39 by


Heads of collective bargaining agent (CBA) and top officials of the Oil and Gas Development Company (OGDC) have been found involved in unauthorised payment of Rs266 million under the Workers Profit Participation Fund (WPPF), says findings of an audit report.

The auditors, who conducted the audit, have recommended investigating the matter and fixing individual responsibility and said the payment may be recovered from the employees concerned.

According to the auditors, an amount of Rs266 million was released to 3,500 “ineligible workers”, who were not direct employees and hired through contractors, over  three years from 2007-08 to 2009-10. The company paid Rs84 million in 2007-08, Rs84 million in 2008-09 and Rs98 million in 2009-10.

The WPPF is represented by two officials of the company and two members of the CBA.

According to documents, the auditors also noted that a complete list of private workers who received the amount from WPPF had not been produced. “Thus, it could not be ascertained whether the amount was actually received by them or otherwise,” the auditors said.

The auditors observed that private workers engaged through contractors did not come within the definition of “worker” of the company and were not entitled to the benefits of WPPF.

“In this connection, Khalik-ur-Rehman, advocate of the Supreme Court of Pakistan, referred to a judgment passed by the Sindh High Court Karachi in a constitution petition and clarified on January 3, 2012 that distribution of 5 per cent profit under WPPF among third party workers was not admissible and should be stopped forthwith,” the auditors said. Thus, the entire payment of Rs266 million made to third party workers was inadmissible and irregular.

Commenting on the matter, OGDC Managing Director Bisharat Mirza told The Express Tribune that he had not seen the audit report. However, he pointed out that the labour department had said three months ago that the government had filed an appeal in the Supreme Court against the decision of the Sindh High Court and therefore payment to third party workers should continue under WPPF.

The main objective of the Workers Profit Participation Fund, established by OGDC in compliance with the Companies Profits (Workers Participation) Act 1968, is to contribute five per cent of the company’s profit to the fund every year not later than nine months after the close of that year.

As per rules, all workers, who have completed six months of employment with the company during the year of the account, will be eligible to take benefits of the scheme.

Published in The Express Tribune, February 23rd, 2012.

Islamabad News Sources -2

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