Employees lose millions to Lahore-based consultancy firm

Muhammad Mazhar is desperately waiting to get his dues cleared from his former employer, PEOPLE – Professional Employees (Pvt) Ltd an (HR) consultancy and outsourcing company – in order to pay his land owner who demands the outstanding amount every day.

Mazhar is now an office assistant at the DHL Global Forwarding Pakistan (Pvt) Ltd, a local subsidiary of the German company and among the 300 workers who were employees of PEOPLE, which had an outsourcing agreement with DHL under which its employees, including Mazhar, would provide services at DHL’s premises.

In other words, these employees were on the payroll of PEOPLE and providing services to DHL – similar to an arrangement under which a business hires a security firm to provide security to its premises but the security personnel remain on the latter’s payroll.

According to sources, DHL Pakistan terminated the eight-year contract in October 2015 over a dispute regarding the eight per cent tax imposed by the government on services. As a result, all these employees resigned from PEOPLE because they wanted to work for DHL directly or through another HR company that would replace PEOPLE.

However, when these 300 employees claimed their outstanding compensation from PEOPLE, the company refused to clear their dues, especially provident fund – a form of social safety net in which both the workers and the employers contribute equally. The money in the fund is paid back to the employees when they resign or retire – in other words, if an employee’s contribution over his job period amounts to Rs 100,000, the employers pay him Rs200,000.

According to the law, PEOPLE was bound to pay these dues within a month, Mazhar said. “It’s been more than six months, but we have not been paid anything yet,” he added.

When the matter was investigated further, sources revealed that PEOPLE, the Lahore-based HR consultancy firm was allegedly involved in the misappropriation of Rs16 million which belonged to the employees.

The victims are blue-collar workers who heavily depend on their savings, especially for major expenses, such as paying medical fee for their aging parents, getting their daughters married, and paying for higher education of their children.

Mazhar, along with his two colleagues, driver Shahid Naveed and office assistant Mukhtar Shah, told Pakistan Today that PEOPLE owes up to Rs200,000 to their‘poor employees.

When the employees lodged their protest with the company, the management simply laid blame on DHL for not making the payment which was due to PEOPLE, through which the company had planned to pay its employees.

By contrast, sources say that DHL had been paying Rs seven to eight million every month to PEOPLE under heads of salaries, provident fund and Employees Old Age Benefit Institution (EOBI) fund against the invoice they would receive from the latter – which included a monthly commission of Rs500,000 to 600,000 paid to PEOPLE.

DHL has to pay only Rs2.6 million to PEOPLE, sources say, but the amount PEOPLE owes to its employees is Rs16 million, which has to be paid regardless of DHL’s payment.

The dispute didn’t remain limited to these two companies and the Federal Investigation Agency has now initiated an inquiry in this regard.

Sources familiar with developments of the inquiry said PEOPLE had been receiving money from DHL but did not maintain a provident fund account. Moreover, the company was allegedly using this money in construction and building projects, sources say.

However, Kamran, an admin officer at PEOPLE said that the payments were delayed due to some contractual dispute with DHL. He refused to comment on the fraud allegations saying he was not aware of the details. “We are devising a plan to pay the employees and we will be dealing with DHL separately to resolve our dispute,” he added.

It may be added here that DHL had hired PEOPLE’s services in Karachi, Lahore, Islamabad and Sukkur. Therefore, PEOPLE’s employees from these cities are preparing to launch a protest at their respective press clubs.

DHL has reported the case to FIA where Investigation Officer Farid Khan is conducting inquiry and will send his report to his director to file First Information Report (FIR) against the company.