Pakistan has very tough labour laws that makes it very difficult for an employer to fire a worker, the severance penalties are also high; yet workers are being terminated in Pakistan without any notice as very few are registered.
LABOUR
Pakistan has very tough labour laws that makes it very difficult for an employer to fire a worker, the severance penalties are also high; yet workers are being terminated in Pakistan without any notice as very few are registered.
Foreign investors cite the tough labour laws as a major hindrance in investment besides the painfully slow judicial process. Pakistan is ranked very low in the Ease of Doing Business report of the World Bank and among all other parameters its worst score is in the labour laws. This gives an impression that workers’ rights are over protected in this country.
Unfortunately, this is far from truth. Labour in Pakistan is exploited mercilessly. The labour laws are applied on those workers that are given official appointment letter in an enterprise. They are entitled to minimum wage, officially prescribed working hours, employees’ old age benefits, social security and health facilities. The number of workers in Pakistan according to the Pakistan Bureau of Statistic has exceeded 60 million. Out of these hardly two million workers are registered with the four provincial labour departments.
The employees pay the Employees Old-Age Benefits Institution (EOBI) and Social Security to the respective labour departments of each province. The rest get no social security, safe guard or minimum wage. It is surprising that exploitation of workers by Khaadi made headlines in social media as if they were ignorant of similar treatment faced by the rest more than 58 million workers.
There is no concept of contract work in the law except that an employee is not considered permanent until he/she completes three months probation. At the end of this period, the probation period could be extended by another three months after which the workers should be regularised or terminated. The labour departments in all provinces are responsible to ensure that the employers are fully abiding with the labour laws.
One can lament that it is not possible to cover factories that are in far flung areas. But let us take the example of the factory that collapsed in Sunder Industrial Estate few years back. Dozens of workers lost their life in that incident along with the owner. The survivors of Sundar factory collapse told media that they were being paid Rs8,000 per month; against the then minimum wage of Rs12,000. They were asked to work for 10 hours instead of the officially allowed 8 hours. Those workers were not registered with the social security department of the provincial labour ministry.
Sundar is the largest industrial estate of Punjab and accessible to the labour department. How can we expect to stop workers exploitation in smaller industrial clusters; when they cannot stop labour exploitation in the largest industrial estate?
Textile sector claims that they provide employment to over 3.5 million workers and the number may even be higher, but the way they give work to them is simply out of the book in real sense. In some cases they enter into contract with a contractor who supplies them the required labour on daily basis. People wonder as to why no complaint of withheld payments surfaced in the past four years, particularly in Punjab, when the mills sometimes remained closed for up to 15 days due to load shedding. The answer is simple, when there is no power, the labour is told at the mill gate to go home. This way the mills are not burdened with the wages of the daily wagers. These workers are hired through third party contractors. The contracts are of small duration and workers can be hired and fired on the whim of the owner. In some cases even the past dues are denied and worker having no official appointment letter cannot plead his case in any labour court.
The entrepreneurs take advantage of a flaw in law that allows hiring on contract basis when they receive an order requiring the labour to work for a limited time. Factories that have been working for decades are not operating on per order basis. They operate sometimes 24/7 to execute orders of different buyers, but take refuge of the clause allowing contract workers on per order basis. Each order that a company obtains from different clients is considered a contract. Even if there is no order in line but they expect the goods to dispose later, they invent a contract to beat the law.
What has happened in Khaadi is happening in most of the textile factories. This cannot happen without the connivance of the labour departments of all provinces. Any determined labour inspector can apprehend the owners by simply interviewing the factory workers outside.
Exporters do have problem in such hiring as they are bound to comply with not only the labour laws of Pakistan but also with some other conditions desired by the foreign buyer regarding labour welfare. They wrangle out of this situation by hiring skilled workers on ‘piece rate’. This means that the worker is paid on the quantity of articles he/she completes in a day. They are allowed to work overtime as well and paid according to law. This way a worker might earn more than the minimum wage but is denied any other benefit.
The earning depends upon his/her output. The worker is not entitled to any paid leaves and is not paid if the factory is closed. Some factories are more cautious, they fire their workers a day before the end of each month and rehire them two days later to deny them the permanent status.
Contract labour benefits the employer in many ways. First is that there is no chance of formation of workers union; second he has no obligation to give gratuity or medical benefits to the workers. These workers do not get yearly raise as the market is flooded with job seekers. When they are unable to work after 25-30 years of labour they end up as destitute.
Conditions are worse in cases where the supplies are meant for domestic consumption. The producers of ladies lawn are not subject to the oversight by foreign buyers regarding the way they treat their workers. The brands that sell stitched ladies dresses make them mostly for domestic consumption and the few that export send it to their own outlets in foreign countries. Stitching work is mostly done on piece rate that deny workers any other right than the money they get for their work. There are some brands that arrange workers through third party contractors where workers rights are ignored.
The Khaadi episode has gone viral on social media, but we must not act as hypocrites as workers plight is even worse in our daily life. Many of those that rightly condemned the unfair treatment employ house servants who are treated as shabbily. The shopkeepers employee children at as low as Rs4,000 a month. The roadside workshops pay apprentices Rs30-50 per day for years.
Government’s lax attitude towards workers exploitation has given the employers a free hand. The foreign investors that go by the book consider the labour laws in favour of labour and against employer. They think twice before investing in the country. The labour laws are balanced in developed economies that safeguard the rights of workers to the extent of their minimum wage and social security but give free hand to the employer to hire and fire them. The local investors have found a way to not only defeat harsh labour laws, but also to exploit their workers at will.
The writer is a staff member
