There are over a hundred laws that govern Pakistan’s labor market, but all are either out-of-date or ill-conceived.
Take the example of The Factories Act, 1934, which deals with companies with 10 or more workers, and applies, mostly to textile firms. This Act, although a comprehensive piece of legislation, dates back to the colonial period and is over 70 years old. The law has been revisited and revised as the Sindh Factories Act, 2015.
Pakistan’s labor laws provide some protection to workers. At least on paper, they ensure minimum wages, health and safety benefits, overtime pay, registration with the Employees Old-Age Benefits Institution, and social security. But similar to the Sindh Factories Act, 2015, most laws do not account for the use of technology and digital bookkeeping in today’s globalised world. This is particularly important since most factories now have computerized records and rely on technology and machines.
One glaring paradox is third-party vendors. Large companies often outsource their production to suppliers not directly associated with their brand in order to slash costs. But such third-party contracts are illegal, according to Saeed Ghani, former adviser to the Chief Minister Sindh on Labor and Human Resources. “Its prohibition is not exclusive to the textile industries, rather all sectors and industries are required to abide by it.”
A key point of dispute between Khaadi and the workers was the usage of the word employee. Khaadi distanced itself from the protesting men and women since they were hired on contract through a third-party, while the protesters identified themselves as employees of the brand. Despite repeated attempts, Khaadi did not respond to requests for comment.
So, were they or were they not workers of Khaadi?
Under law, contracts by definition should not be longer than 90 days. Anything above and beyond is considered a permanent stint. For example, if a person works at a garment factory sewing clothes all year round, his or her job will no longer be a seasonal one. The contractor will be required to offer the worker a permanent position.
In several private organisations, workers have been working for more than five, six, or even seven years, but have not been regularized. Such situations are in direct violation of Articles 3 and 4 of the Constitution of Pakistan.
Legally, a workday in Pakistan should be no longer than eight hours, including a one-hour break for lunch. For this, the state-mandated minimum wage is set at Rs 15,000. Overtime must not exceed two hours per day, which should be accordingly compensated. Yet, none of these rules are followed. In most factories, workers toil for over nine hours, with hurried lunch breaks.
Going by international labor laws, factories should be inspected annually to ensure the protection of workers’ rights. But Pakistan is short on hands and even shorter on motivation. Today, there are 547 inspectors for over 350,000 factories. Even more abysmal are the number of female inspectors, 17 in total, for the large number of women employees in garment factories. Doing business in Pakistan might be cheap, but there is a dark side to it that few are willing to talk about.
Pakistan is a country only for riches. The overall system works in favor of affluent society. Feudalism is existing in its most formidable form in Pakistan where the poor have no door to nock in condition of persecution and destitution. The shares of wages and salaried workers, own-account workers and contributing family workers in Pakistan account for around one-third of employment. According to a report of United Nations, employment situation in Pakistan remains weak as the sluggish growth rate over the past few years has had a negative impact on employment. Long-standing structural problems such as weak policy implementation, security concerns and low investment in physical and human capital constrain growth. Reflecting the high share of employment in agriculture, working poverty persists at very high level. Based on a $2 a day international poverty line, South Asia, especially Pakistan, has globally the highest proportion of working poor at 67.3 per cent in 2011.
According to Pakistan’s first-ever official report on multidimensional poverty, Four out of 10 Pakistanis are living in acute poverty with the population of Balochistan faring the worst among the provinces. The report states 38.8% of Pakistan’s population lives in poverty. A majority of the rural population (54.6%) lives in acute poverty while this ratio is only 9.4% in urban areas, emphasizing on the need to make rural-centric economic policies. If regions are also included, the Federally Administered Tribal Areas (Fata) has the highest poverty rate, where three out of every four persons (73.7%) are poor. Fata is followed by Balochistan (71.2%) and Khyber-Pakhtunkhwa (K-P), where half of the population (49.2%) suffers from acute poverty and deprivation.
So in this condition the poor had no choice to sell his labor for a song and this vicious cycle of poverty became endless.
Santosh K. Verma is Senior Fellow, Makhan lal chaturvedi National University of Journalism and Communication Bhopal M.P. India