It was busy Monday morning when Manager Human Resource at PTCL Ms.

Amna asked Ms. Azka for the job descriptions she had ordered to be prepared
last week. “Ms Azka please show me the job descriptions I had told you to
prepare last week. I need to show them to the EVP by the end of today” said
the manager HR. “Sorry madam I was unable to prepare them due to the
strike last week” said Ms Azka. “This is the fifth time this month we haven’t
been able to meet our deadline because of the labor unions. I need to take
this case up with our EVP” said the Manager HR.

Pakistan Telecommunication Company Ltd.

From the humble beginnings of Posts & Telegraph Department in 1947 and
establishment of Pakistan Telephone & Telegraph Department in 1962, PTCL
has been a major player in telecommunication in Pakistan. Despite having
established a network of enormous size, PTCL workings and policies have
attracted regular criticism from other smaller operators and the civil society of
Pakistan. Pakistan Telecommunication Corporation (PTC) took over operations
and functions from Pakistan Telephone and Telegraph Department under
Pakistan Telecommunication Corporation Act 1991. This coincided with the
Government's competitive policy, encouraging private sector participation and
resulting in award of licenses for cellular, card-operated pay-phones, paging and,
lately, data communication services.
With an employee strength of 30,089 and 5.7 million customers PTCL is the
largest telecommunications provider in Pakistan. PTCL also continues to be the
largest CDMA operator in the country with 0.8 million V- fone customers.
The company maintains a leading position in Pakistan as a leading infrastructure
provider to other telecom operators and corporate customers of the country. It
has the potential to be an instrumental agent in Pakistan’s economic growth.

The New Age of Privatization

Pursuing a progressive policy, the Government in 1991, announced its plans to
privatize PTC, and in 1994 issued six million vouchers exchangeable into 600

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million shares of the would-be PTCL in two separate placements. Each had a par
value of Rs. 10 per share. These vouchers were converted into PTCL shares
in mid-1996.
In 1995, Pakistan Telecommunication (Reorganization) Ordinance formed the
basis for PTCL monopoly over basic telephony in the country. It also paved the
way for the establishment of an independent regulatory regime. The provisions of
the Ordinance were lent permanence in October 1996 through the Pakistan
Telecommunication (Reorganization) Act. The same year, Pakistan
Telecommunication Company Limited was formed and listed on all stock
exchanges of Pakistan.
As telecommunication monopolies head towards an imminent end, services and
infrastructure providers were set to face even bigger challenges. Pakistan also
entered post-monopoly era with deregulation of the sector in January 2003. On
the Government level, a comprehensive liberalization policy for telecom sector is
in the offing.In middle of 2005 Government of Pakistan had decided to sell at
least 26 percent of this company to some private agency. There were three
participants in the bet for privatization of PTCL. Etisalat, a Dubai based company
was able to get the shares with a large margin in the bet.
Privatization & the Labor Unions
In 2005, when the government was going to privatize the company there was a
country wide strike and protest by the PTCL labor unions. They even disrupted
phone lines of some big Government institutions like Punjab University Lahore
and many lines of public sector were also blocked. Military had to take over
management of all the exchanges in the country. Many workers were arrested
and put behind bars. The contention between the government and the
employees ended with a 30% increase in the salaries of workers.

Many big changes happened at the beginning of the privatization phase which
included the VSS (Voluntary Separation Scheme) in which a hefty amount was to
be paid to employees who willingly left the company. It was found that lists of
predetermined employees were only offered the scheme. Many employees took

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the scheme and left PTCL .Starting from 2004 a series of strikes were held and
still continue up to this date.
Let the Strikes Begin!!
There are two main different categories of employees working at PTCL.
• Managerial(Regular, Contractual)
• Non- Managerial (Daily wages, Contractual, Regular, NCPG).
17 small trade unions of PTCL employees operate all over Pakistan representing
and forwarding labor interest. One problem with the trade unions is that they
work separately and there is no unified representation of workers.
In 2004, a strike was held by the NCPG (Non-Compensation Pay Grade)
workers. The key issue behind this strike was the regularization of NCPG
workers in the company. This would make the NCPG workers regular employees
and they would receive pension plans and increments. The strike was not
successful.In October 2004 there was a 15 day strike. The key issue behind this
strike was a demand for a 15% increase in the pays scale of union represented
workers. In December 2005, as privatization began there was another 15 day
strike by workers. This was strike was done by workers as they thought
privatization would have an effect on their job security .In 2008, another strike
was held by the NCPG workers. The same issue was raised by the workers who
wanted their status to be changed to regular and provision of increments as per
government rule. In the protest 265 NCPGs lost their jobs.
The UPS
There was mistrust between management and worker unions. There was no
single representation of labor interests. In July 2008, a strike was held against
the UPS (Unified Pay Scale). On July 14, 2008, PTCL administration decided
that all employees of the company will have to sign a new contract and they will
have to accept all new rules and working regulations or they can and get out of
the company very calmly. Management believed that the UPS would have a
positive effect on workers. They had planned road shows to create awareness
about UPS. The UPS stated that workers at a same grade would receive the

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same increments. E.g. all 11 grade officers would receive the same increment.
And equal changes would be made annually in pay scales.
New contract, reached PTCL employees through a notification. UPS stated that
previous employment agreements will be void and no benefits can be claimed by
any PTCL employee, which were granted under previous agreements. UPS will
deprive all employees from Pension (retirement fund) as well.
All PTCL employees were directed to submit signed copies of their UPS
agreements before July 21st, 2008, or their employment with PTCL will be
terminated. PTCL employees thought that UPS is an effort by PTCL
administration to degrade employees from their permanent status to the
contractual one.
Every Conflict had its effects
PTCL workers’ strike created immense problems for consumers as the
organization was already facing shortage of staff after a large number of workers
left the organization under the Volunteer Separation Scheme (VSS). The
company faced management problems. The number of complaints had also
increased in all 35 exchanges of the provincial metropolis and the estimated
number of complaints had increased from 30 to 40 percent in every exchange.
Problems of consumers and complaints were mounting. Distortion, network error,
underground cables damage and lines break-up problems were on the rise and
the administration was facing difficulty in clearing the backlog. According to
sources there were problems in all exchanges of the provincial metropolis; at
least 40 percent consumers were facing problems with their land-line numbers.
The unions also threatened cable cuts all across the country. DSL services were
also affected.
The Role of the Government
The previous government badly failed to face the press and public when they
were asked about the benefits of Privatization, along with the added concessions
given to Etisalat for buying the most valued corporate entity of Pakistan. They
used police and the military to suppress the unions which led to the arrest and

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injury of many workers. The previous government had later told PTCL
management to accept the union demands.

Pakistan People’s Party (PPP) in a recent announcement said that it will discuss
the issue in parliament to investigate the alleged scandalous privatization of the
Pakistan Telecommunication Company Limited (PTCL) by the former
government. The PPP when came under rule removed the ban on unions which
could cause problems for PTCL in the future.
Different Alternatives that could be used to solve the conflict
and their analysis
• Rather than government intervention PTCL management could sit and
discuss the problems with the unions. An advantage of this solution would
be that if there is govt intervention there is use of force, which could be
avoided. The disadvantage of this alternative is that there are 17 trade
unions and bargaining with every one is difficult.
• All the unions should have one single collective bargaining agent. The
advantage of this would be one single union representation and it would
become easier for the management to accommodate all the union
demands. A disadvantage of a single union representation, the conditions
of all the unions might not have much weight age. Disagreements could
erupt between trade unions leading to no results.
• Whenever PTCL management is about to introduce any scheme or policy
they should consult with the trade unions as they are the ones directly
being affected.
• If the government interferes they should try to maintain a balance between
union and management demands rather than giving in on one single
party’s demands. As seen the previous govt had failed in controlling the
situation, hence interference by a third party in a conflict might not be
beneficial. On the other hand a govt is the strongest of any party who
could bring a conflict like this to an end.

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 • PTCL must build on employees trust as they are the backbone of every
company. Conflicts such as these occur due to lack of trust. The company
should launch a scheme that promotes employee trust building. The
company is facing a post privatization phase in which conflicts are
inevitable.
• Governments such as the PPP should not remove ban on unions. An
advantage of this would be lack of pressure by more and more trade
unions coming into existence. A disadvantage of not removing the trade
unions would be that management such as PTCL could exploit its
employees.
My Suggestions
I believe that the main cause of the strikes by the unions were due to distrust and
lack of good communication with the management of PTCL. The UPS must have
been finalized after the mutual consensus between the trade union and
management through internal communication as in the VSS. The PTCL
management should build employees trust. There should be one single
representation of worker union so collective bargaining becomes easier. Force is
not the only way for unions to get their demands fulfilled. Not working and
damaging company assets would result to loss of the company as well as the
general public.
The Adopted Solution and analysis
The previous government had intervened and asked the management to
accommodate the union demands. This intervention led to the withdrawal of the
UPS. Regular employees were compensated as per Government Increments
(Salary Package 2008). NCPGs were given additional allowances which included
accommodation allowances, education grant, marriage grant and funereal grant
Job security was also increased for NCPGs as their job was confirmed. Also the
superannuation age was defined. The 265 NCPGs who had lost their jobs were
also reinstated.

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Lessons learned
Employees are an important asset of a company. They need to be treated with
respect and their rights must not be ignored. Bargaining with unions is a sensitive
issue and in large companies unions have a strong stake in the operations of the
company. Conflicts arise where there is lack of trust and communication.
References:
• http://www.thenews.com.pk/daily_detail.asp?id=125032
• http://propakistani.pk/2008/07/16/ptcl-employees-protest-against-unified-pay-
scale/
• www.ptcl.com.pk

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