Appeared in The News on Sunday

No respite causes abjection
If the prevailing conditions in the labour market are allowed to continue unabated, a considerable majority of the labour force would be further marginalised and would askew the income distribution
By Nadeem Akram
A tiny news item appeared in a lesser known English daily about the Supreme Court of Pakistan ruling that declared the termination of a PTCL employee unlawful since the employer failed to follow the due process, mandated under the existing labour laws, in terminating the employment. The two stalwarts of English print media in the country, however, did not feel the need to run this story, for reasons better known to them. However, one of the two reported a rather in-depth and long detail of the protests lodged by various employers’ federations against the Sindh Labour Department for declaring March 13th as a local holiday in connection with the Opening day of the India-Pakistan ODI series.
The protestations, which in essence challenged the legality of the Sindh Labour Department’s decision to declare a public holiday, is an interesting read. The main thrust of their argument is as follows:
1. The holiday would deprive the exporters from meeting their export targets;
2. It would cost ’daily wagers’ one day’s wages; and
3. Overall production would suffer resulting in heavy losses to thousand of units operating in Karachi
None of the above-cited reasons carry any weight. In fact, it is all about money, additional money the industrialists would have to spend in the form of overtime, if they chose to bring in their workforce to ’meet their export targets’. It is actually really simple: a public holiday does not necessarily mean that the workers have to be given a day off. It happens all the time. The units working to meet deadlines quite often carry on with their normal production operations during the holidays such as Eid etc by paying the employees overtime payment that is normally twice the amount of their regular daily wages. Apparently, the exporters were not happy at the prospects of doling out large sums of money because the government for once thought that the poor workers deserve to have some fun.
The remonstrations made by the employers and the kind of coverage it got goes on to demonstrate our national apathy towards matters related to the ordinary workers and the mindset of our employers who consider workers as a ’liability’ rather than an asset. It should also not come as a surprise to anyone who read the Supreme Court ruling that the employee belonged to a public sector company, with a very strong and dynamic labour union backing their members, especially in cases involving infringement of the basic rights of its members. In the private sector, however, with few exceptions ’freedom of association’ is as alien a concept to an industrialist as ’freedom of expression’ is to a dictator.
This is not to suggest that the labour unions do not exist within the industrial units operating in our country. There are over 8,000 registered unions in the country representing almost 1m workers of public and private sectors but with the exception of a few trade unions, most of the unions operating in Pakistan are either a showcase for the consumption of foreign buyers or simply a matter of adherence of law.
Despite their abundance, the membership of the unions has been on the decline, rendering them ineffective, if not redundant. Abdul Qadir notes in his assessment of trade unionism in Pakistan: "The reasons (for decline in union membership is partly due to) an anti-trade union drive by successive regimes and anti-union laws, the collapse of the old Stalinist trade unions and leadership, the policies of the IMF and World Bank, especially in the so-called structural adjustments, liberalisation and lastly a series of capitulations by the leaderships of the trade unions."
The freedom of association in the private sector, especially in export-oriented companies, is simply a joke. Most of the exporters have got it made since government continues to hold its position on Export Promotion Zones as ’union free’ areas, despite promises made to ILO and other world trade bodies. Ironically, units not operating within an EPZ are the ones who have no choice but to swallow this bitter pill as it is mandatory for every manufacturer employing in excess of 50 of more employees to adhere to, among others, the core principles of labour relations, which are as follows:
* Freedom of association and right of collective bargaining
* Working conditions
* Equal remuneration
* Child labour
* Occupational safety and health
* Labour welfare
It is, therefore, not surprising to find a trade union in almost all export-oriented companies, on paper at least. These unions, hold regular elections, membership dues are regularly deducted from the workers’ salary, all according to the law. The only real difference is that most of these unions are sham unions, commonly referred to as ’pocket unions’. The union officials are handpicked by the owners and are then employed as regular workers. In addition to their regular salaries, a stipend or a union fund is usually given to these union officials for safeguarding the interests of their masters. These officials are usually the strongmen of the management who are not only entrusted with keeping the ’miscreants’ in check but they are valuable providers of the inside information. This vital information helps the management in nipping the evil of freedom and just rights in the bud, and getting away with violating the various laws under the sun.
Ironically, 9/11 has been a blessing in disguise for most of the export-oriented, especially the knitwear, home textiles and Sialkot-based surgical and sports goods manufacturers. Prior to 9/11, they were under extreme pressure from their buyers to abide by the national and international laws vis-a-vis labour rights and working conditions. Compliance to the standards, such as SA-8000, was enforced by regular conformance audits conducted by auditors on the buyer’s payroll. Since 9/11, most buyers opted to ’outsource’ their auditing activities. Several South Asian companies, including Pakistan, were engaged for this purpose. This outsourcing brought rich dividends to the non-complaint companies. Suffice to say that the auditors were less judicious in carrying out their responsibilities, allowing companies to get away with blatant violations of laws.
The main objective of the industrialists operating in Pakistan is to keep their payroll at a decent level, since majority of the Pakistani export-based industry is labour intensive. The idea is to keep the overtime, cost of benefits such as health and life insurance, and labour welfare vis-a-vis social security contributions and Employees Old Age Benefit Insurance etc at a bare minimum. In order to achieve this objective, either of the two tactics is employed depending on the size and nature of the operation. Most recognised and ominous companies opt for the ’pocket union’ option, while lesser-known or the more daring companies go for a ’paper union’, where the union only exists on paper. The pocket or paper unions provide these companies with a cloud cover for circumventing labour laws.
For instance, an industrial unit operating in District Hafizabad, Punjab has opted for a pocket union, still requires the prospective employees to sign or place their thumb impressions on a blank piece of paper at the time of their recruitment. This blank piece of paper is then craftily used as a resignation letter, if the employee at some point strays and attains the status of persona non grata. In most textile units operating in Faisalabad and adjoining areas, the recruitment of workers is conditional to a personal guarantee provided by a worker already employed in the mill. The reference is crosschecked by the foreman who acts as the agent for the prospective employee. More often than not, the foreman ends up getting a certain percentage of the wages of an employee as ’compensation’ for a favourable recommendation.
In the knitwear industry, these foremen, usually with fancy titles are responsible for supplying the ’contract’ labour. Large sums of money are extracted from workers in the form of commissions for assignments on a better paying and lucrative function on the assembly line production where workers are paid on a piece meal basis. The kickbacks are shared equally in a bottom-up manner, with the mills manager or the general manager getting his share of the commission. An administration manager, who worked for a large composite knitwear unit, had to lose his job when he tried to intervene at the behest of an aggrieved worker who refused to pay the commission and ended up getting fired. The production managers, especially in knitwear industry, call all the shots simply because they serve a very useful purpose of getting the work done through ’contract’ workers.
Employment of contract workers is useful in more than one way, not only that it allows the organisation to keep its payroll cost down, since the contract workers are normally not entitled to the usual benefits such as provident fund, leaves, social security, life and health insurance, it also serves as an anti-union tool since contract workers do not have a right to form a union. Even multinationals operating in Pakistan have learnt to keep the matter straight and simple by employing similar tactics.
Abdul Qadir sums up the benefits of employing contract workers in his article "Unions and Challenges: An Analysis of Pakistan and the Pakistani Situation", where he states: "The Contract Worker System holds very strong roots in our economy. The employers and multinationals are enjoying enormous benefits from the contract system by circumventing labour laws. The majority of the workforce engaged in multinationals and other corporations is purely at the employer’s mercy. The allowances and other admissible facilities are imaginary for the hard working force. Being a contract worker they even have no privilege to form a trade union or participate in a referendum/election. So if the contract system continues to exist in the industry, the awareness level of ordinary workers cannot be elevated."
Similarly, International Confederation of Free Trade Unions (ICFTU) in its annual survey of 2003, severely criticised the violation of labour laws by both private and public sector organisations, citing numerous examples of harassment, intimidation, blackmailing and outright physical threats to force employees to accept violations of labour laws. It states, "In the industry, some employers divide production up into units of less than 50 people in order to evade labour legislation, even to the extent of having employees of different enterprises working at the same premises. Employers also artificially promote workers to managerial status so that they no longer qualify for union membership, usually without the concomitant salary. The procedures for union registration and the appeals process can take many years if an employer is opposed to the formation of a union. Employers often strongly resist unionisation of their employees, resorting to intimidation, dismissal and blacklisting."
A blatant display of high handedness and the repressive legislation is best illustrated in the Daewoo case, which was cited in the ’Report for the WTO General Council Review of Trade Policies of Pakistan’: "Employers often strongly resist unionisation of their employees, and can use the union registration requirements to their advantage in this regard. A Daewoo workers’ union tried for six years to unionise workers on a Daewoo-Hyundai construction project, but the drive was held up in court until after the project was completed’. It is just one of the many similar example of government’s complicity in facilitating the employers to deny workers’ their struggle for self-preservation.
If the prevailing conditions in the labour market are allowed to continue unabated, a considerable majority of the labour force would be further marginalised and would askew the income distribution, which stands as the poorest 20% of the people receiving 6.6% of the income against the share of richest 20% which is 47.8%. Additionally, this exclusivist approach would add further woes to our national Human Resource Development index, which has slipped from 144 to 175 in terms of its standing in a global perspective.
Policymaking alone will not make this genie disappear. Policies would have to be implemented, enforced and monitored in order for them to work. This is the only way that the labour in Pakistan would avail their legal rights and issues.