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Pakistan: Labour Policy and Rights

by Karamat Ali, 27 July 2009

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Dawn, 27 July 2009

Militancy in Pakistan has overshadowed the concerns and rights of the poor. However, general discontent amongst most segments of the population continues to grow while the state seeks military solutions without focusing on other issues.

Under the circumstances, a new perspective for labour rights, both as an existing concern and a new challenge in situations of emergencies and distress, is needed.

The current scenario presents opportunities for creating a model that can successfully address the issues of marginalised sections who are survivors of poor development and military rule.

Can the present democratic government address the situation? The federal government appears to have ceded responsibility for labour issues as demonstrated by the lack of a new labour policy, which was expected on May 1, Labour Day. There was total silence on the subject that day.

Later, many expected that the new budget in June 2009 would address workers’ issues. Some hoped that the minimum wage would be raised. The record 24 per cent overall inflation in Pakistan including a 35 per cent food-related inflation has seriously eroded the real incomes of working people.

This negative impact was expected to be addressed through the indexation of wages, meaning that wages would increase with inflation. Unfortunately, the 2009 budget did nothing to redress the impact of the previous budget. Not only will the situation of labour deteriorate, it will do so at a faster pace, as the impact of the current budget will be felt somewhat later.

Even now, it is not too late to make amends for this blatant neglect. The government can address labour issues either by instituting structural changes in power relations or through the reform of the present system. While the government avoids structural change, meaningful reform is critical.

In any case, some steps do not need radical restructuring. They simply imply the efficient utilisation of social security funds and putting into practice existing laws and mechanisms.

First, almost 80 per cent of workers do not receive the minimum wage as determined last year by the government. Implementation of this wage is a provincial government matter; mechanisms for implementation and the redress of violations must be carried out.
Second, land reforms may be unacceptable to the government but the government can give poor people the lease/rights for their homes built on state land. This process has begun in a limited way in Sindh and should be replicated throughout Pakistan. If the government wants to end the bondage of the poor and prevent their children from becoming suicide bombers or be employed in hazardous occupations, it must give the poor legal titles to their homes.

Third, employees’ social security institutions at the provincial level and the Employees’ Old-Age Benefits Institution (EOBI) at the federal level must register all eligible workers to provide old-age pension, medical and disability coverage etc. At present these institutions, though in existence since 1965 and 1976 respectively, have not registered more than 10 per cent of the total work force.

Fourth, workers should have the right to register themselves. The government must notify all establishments employing five or more workers to be registered and ensure that the law is applied to all such establishments everywhere in Pakistan. It should also give the right of self-registration to a worker on payment of a small contribution to both the Employees Social Security Institution (ESSI) and EOBI where employers fail to get them registered. The same applies to those who are self-employed or work in the informal sector. The government can pay the remaining amount from the Workers Welfare Fund in which over Rs80bn are lying with the federal government.

Fifth, the two institutions, the ESSI and EOBI, can be merged into a single social security institution to cover all aspects of protection such as unemployment benefits, health coverage and disability compensation.

Sixth, all provinces of Pakistan should resume proper labour inspection. This has been suspended everywhere for years. This is callous and against the constitution which asks for ensuring humane and safe working conditions. So inspection is important for labour protection.

Finally, a new model of ensuring rights and providing protection to workers caught up in violent conflict or emergencies can be created in the NWFP to be replicated in other emergencies later.

In the NWFP, where massive displacement and unemployment have occurred due to the ongoing disruption caused by militancy and military action, workers’ health and safety issues can be seen in the context of the larger picture, and workplace health and safety measures should be extended to and coupled with general health and safety issues.

Meanwhile, the law of minimum wages should be strictly implemented. The workers could be engaged in public works when reconstruction begins on private and public projects. They could be protected through registering with the ESSI and EOBI rather then depending on charity and dole-outs by local and foreign donors.

In view of the conditions obtaining in the NWFP, southern Punjab and parts of Sindh the state must take measures to ameliorate the conditions of the marginalised and excluded. Drone attacks alone cannot address these problems. In the coming days, business and industry shall remain under stress and the state must fulfill its social and economic responsibilities as obligated by the constitution of Pakistan.

The writer is executive director, Pakistan Institute of Labour Education and Research.