Mohammed Nawal Jamil ACA’s Post

The biggest issue I've observed here is with the concept of learning and stipends. Any job offers valuable learning opportunities, even in a call center where communication skills are honed which is the most demanding skill in the Market. However, instead of offering stipends, which are essentially like lollipops, proper salaries are provided. In the case of CA trainees, they often serve as unpaid labor for the elite class for 3.5 years. Once, I questioned the ICAP president about the remuneration for trainees, he responded with a question about how much I thought was appropriate, whether it was 1 lac or 2 lacs. I replied that it should be more than the minimum wage rate in Pakistan. He then mentioned introducing scholarships, but I insisted that we need proper remuneration as a basic right, not scholarships that seem like begging. Unfortunately, they changed the topic instead of addressing the issue. They know that they are exploiting the basic human rights but as they are the beneficiary of this Cheap educated labour so why would they take steps in the favour of trainees. I would appreciate it if you comment, the favourable steps that we can take as trainees.

This addresses an important matter regarding the treatment trainees receive from the audit firm in different part of the world. I belive this disparity in how trainees are compensated only exists in sub continent, other parts of the world trainees are considered as employees. In some regions, unfortunately, trainees are subject to unfavorable conditions, including inadequate remuneration. However, I firmly believe that we should adopt a global perspective and ensure that all trainees receive fair treatment. Rather than referring to their compensation as a "stipend" or "wages," let us recognize it as a salary, just like any other employee receives. As we strive for excellence and progress, it is crucial to stay informed about the evolving landscape of employment practices unlike this senior audit member who is still living in his past. I encourage everyone, including our senior colleagues, to embrace change and adapt to the dynamic nature of our industry. Let us focus on creating an inclusive and supportive environment for all team members, regardless of their status.

Every few years this question arises and we see the same old arguments. This particular mindset of policymakers (decisionmakers) is one indicator of why the accounting industry is not growing in Pakistan. One big four does not exist in Pakistan while another has significantly downsized its operations. There is a need to seriously rethink how the industry is being run!

Sometimes we take things for granted, just like the knowledge each person holds. Something that has been popular in many conversations I have had this week has been the phrase “Nobody has monopoly of knowledge” (4 different conversations have lead to this phrase, this week!) Which is why, I urge you to consider dropping a one liner below, that could help someone in our sector with an issue they maybe facing. Here’s a couple of things I’ll share: - when you edit a csv bulk upload, and it fails due to date format error, you need to select an American date format in order for the portal to accept! - providing traineeship options to staff members may have a positive financial and workplace cultural impact on your organisation (such as not paying payroll tax on certain trainees and showing potential employees that you are willing to invest in them!)

It’s disappointing to see a partner at RSM Pakistan supporting underpaying trainees by calling it a “stipend.” He overlooks the financial needs of trainees who significantly contribute to the firm’s operations. Mr. Haque’s advice for trainees to seek part-time jobs ignores the stressful nature of firms’ training, with late hours and weekends making additional employment impractical as well as it’s not allowed by ICAP to persue part time job while training. This practice is a sophisticated form of bonded labor in Pakistan. Accounting firms are businesses, not charities. They earn substantial profits from the hard work of their employees, including trainees. Fair pay and reasonable working hours are essential for their well-being and professional development. This mindset within RSM Pakistan’s leadership needs to change. #FairPayForTrainees

To ensure an unbiased understanding of the situation, it's imperative to independently evaluate the following key aspects: - Comparative analysis of how other chartered accountancy bodies, such as The Institute of Chartered Accountants of India & Institute of Chartered Accountants in England and Wales (ICAEW) are addressing the matter of stipends in relation to minimum wage standards in their respective countries. - The mandatory articleship period should be viewed as an investment in oneself , my fellow trainees, rather than a period for earning. Firms offer invaluable training that yields lifelong benefits. - During the articleship, focus should solely be on learning and passing examinations. Pursuing part-time earnings at the expense of these priorities is counterproductive. - Accusations of firms earning unjustly lack merit, especially considering the comparatively low compensation in Pakistan's audit and assurance sector on a global scale. Ultimately, respect for the profession and The Institute of Chartered Accountants of Pakistan (ICAP) is paramount. Constructive dialogue, not finger-pointing, is the path to resolving issues. Waqas Bukhari Inam ul Haque FCA !!!

I partially agree with Inam's view, but only because firms would curtail hiring if they are asked to pay more. We all know that industry experience is no alternative for firm experience. So more students would miss out. It also means even more workload on fewer trainees. ICAP should instead provide relief by regulating tution fees and forcing firms to cut down on working hours. Further, if we treat trainees like normal minimum wage employees, it means no more long exam leaves. Only 7-10 days leaves and that too if circumstances permit, like normal jobs. If trainees are not willing, firms would hire accas instead who are nearing completion of their qualification.

Protect Your Business from Hidden Gratuity Liabilities: Know the Difference Between Trainees and Apprentices!!!! . . Many employees who have undergone training or apprenticeships are left confused about their eligibility for gratuity under the Payment of Gratuity Act, 1972. Are all trainees excluded from gratuity? How do you differentiate between a "trainee" and an "apprentice"? 👨⚖️ The Judgment 👩⚖️ In Steel Authority of India Limited IISCO Steel Plant vs. Md. Mohiuddin & Ors. (2024 LLR 831), the Calcutta High Court clarified that not all trainees are excluded from gratuity benefits. The court ruled that only those undergoing "apprenticeship training" under a formal contract of apprenticeship as defined in the Apprentices Act, 1961, are exempt from gratuity. Others, even if labelled as trainees, are considered employees under the Payment of Gratuity Act. 🔑 Key Insights for Employers and Employees: Not all trainees are apprentices. A person can only be considered an apprentice if they are undergoing specific training as per a contract under the Apprentices Act. Trainees are employees, too. Trainees not covered by the Apprentices Act are entitled to gratuity under the Payment of Gratuity Act, 1972. No break in service. If a trainee is absorbed into the job without a break post-training, the period of training is counted towards continuous service, making them eligible for gratuity. ✔ Solution for Employers 1. To avoid future compliance issues related to gratuity, it’s essential to clearly differentiate between apprentices and trainees right from the hiring stage. When hiring apprentices, ensure they are employed under a legally recognized Apprenticeship Contract as per the Apprentices Act. This way, their tenure won’t be considered for gratuity calculations. 2. For trainees or employees undergoing training without an Apprentices Act contract, always document their status and training duration transparently in their employment terms. Also, review the employment agreement periodically to confirm that the categorization aligns with applicable labor laws. By taking these steps, employers can effectively manage gratuity liabilities and prevent disputes down the line. Regularly consulting with compliance experts and conducting internal audits can further mitigate risks and help maintain a smooth operation. #GratuityRights #ApprenticeVsTrainee #PayrollCompliance #LabourLaw #PayrollExpert PS: My focus is on helping employers take the right steps so they won’t face the burden of statutory liabilities.