The federal government has approved a Rs5 billion technical supplementary grant to initiate the layoff of approximately 2,545 dock workers from the Karachi Dock Labour Board (KDLB), following the refusal of AD Ports to absorb their services. The total cost of the layoff plan is estimated at around Rs24 billion, with the Karachi Port Trust (KPT) expected to arrange the remaining funds from its own resources.
Background of the Layoff Decision
The KDLB, established under the Dock Workers (Regulation of Employment) Act, 1974, has been responsible for ensuring regular work and income for dock workers and overseeing labour relations between workers and KPT. However, after the Bulk & General Cargo and Container Terminal of Karachi Port were outsourced to AD Ports, the role of dock workers diminished significantly. AD Ports explicitly requested KPT to assume full liability for all dock workers, stating it would neither utilize their services nor contribute to any payments.
The Ministry of Maritime Affairs (MoMA) briefed the Economic Coordination Committee (ECC) that the layoff proposal originated from the Prime Minister's Task Force on Revamping of Pakistan's Maritime Sector, which directed KPT to initiate legislative measures to abolish the Dock Workers Act. The Implementation Committee of the task force, during a meeting on March 11, 2025, deemed the original layoff proposal cost-exorbitant at over Rs24 billion and directed MoMA to seek clarity from the Management Services Wing of the Establishment Division.
Legal and Financial Hurdles
The matter was subsequently referred to the Law and Justice Division and the Establishment Division. The Law and Justice Division classified it as an employee-related issue under the purview of the Establishment Division. The Establishment Division, however, noted that the analogy with the layoff plan for Pakistan Public Works Department employees, who are civil servants, was not applicable. A draft bill to repeal the Dock Workers Act and the Karachi Dock Workers (Regulation of Employment) Scheme, 1973 was prepared and legally vetted by the Law and Justice Division.
A high-level committee chaired by the deputy prime minister held meetings on October 31, November 12, and December 1, 2025, to deliberate on three compensation packages ranging from Rs7.582 billion to Rs12.780 billion. The committee initially decided that the finance division would provide Rs5 billion, with KPT arranging the remainder. However, the finance division refused, citing lack of fiscal space and noting KPT's healthy liquidity position. MoMA countered that KPT had to finance projects worth over Rs200 billion and could not bear the additional burden.
ECC Approval and Implementation
Despite the finance division's initial reluctance, the ECC ultimately approved the proposal for a Rs5 billion federal contribution through a technical supplementary grant for the current fiscal year. KPT will arrange the remaining amount from its own funding sources. The layoff is expected to face strong opposition from dock workers' unions, who have raised concerns over job security for workers employed for over 50 years.
According to MoMA, the KDLB currently registers 2,545 dock workers under the scheme established pursuant to Section 3 of the Dock Workers Act. The board was created to ensure regular work and incomes for dock workers and to manage labour relations. With most terminal operators no longer requiring their services, the workers' utility has become limited, prompting the government's decision to wind up the KDLB.
