A sustainable development cannot be achieved without letting competitiveness flourish in industries by adopting a ‘balanced labour policy’ for increasing productivity and efficiency.

The previous labour policy favoured employers while ignoring labour rights and welfare. The new elected government intends to improve labour conditions.

Profit maximisation, productivity and efficiency are the core objectives in this competitive world. Investment in human capital is a significant factor for industries to sustain considerable profit. The South East Asian countries since 1960 have adopted a dynamic and strategic labour policy putting emphasis on improving the quality and skills of labour.

Our policies during the last eight years, have curtailed labour’s benefits to achieve the profit maximisation. This is due to public policy’s faith in neo-liberalism. The provincial governments do not properly inspect the industries to ensure proper implementation of labour laws. The prescribed health and safety standards are not maintained in industrial set-ups, according to laws. The number of industrial mishaps are increasing. Since the initiation of the privatisation policy in the early 1990s, nearly 600,000 labourers have lost their jobs.

The employers believe that the labour laws mean unnecessary capital investment which is contrary to the profit maximisation objective. Often contract employers are preferred.

Gradually, the life-time employment is getting out of fashion and replaced by a flexible labour policy, globally.

Since its inception, only one labour policy (1972-1977) was relatively balanced and comprehensive. Lately, the divergent interests of labour, employers, and the government’s are not properly reconciled.

The imbalance in labour policy appeared because of the changing aim of the state, from ‘welfare state’ to ‘national security state’. The ‘human security’ has been considered less significant than ‘defence security’. The limited budget for education and health is the manifestation of the state’s low priority to social welfare.

The labour unions were discouraged although forming and joining them is a fundamental right under the ILO of which Pakistan is a signatory. According to the Asian Development Bank (ADP), ‘less than two per cent of the labour force was unionised in 2002’ which has gone down further in last five years.

Labour law promotes ‘contract labour system’ and reduces the legal status of a worker. The employer is under no legal obligation to contribute funds in terms of medical, health and accident insurance, provident fund and social security. The contract labour system is exploitative from the ‘welfare point of view of workers’.

A research report reveals that contract labour is less motivated. The industries that hire employees on contract have experienced higher turn-over rate in contrast to permanent employees. Although it may appear cost effective, it works against the strategic objective of an organisation: consistency in retaining a motivated and trained workforce.

The job insecurity in contract labour reduces workers’ efficiency and creates anxiety, work stress, depression and frustration. But now it is a growing practice. A considerable numbers of multinational corporations (MNCs) hire workers on contract, from labour right up to the managerial level.

The socio-economic condition of our labour is below the international standard. Fifty per cent of labour force is illiterate and its skills deficient as per the need of technologically advanced work/production process. This reduces their capacity to learn and upgrade themselves with new knowledge and skills. The training policy for skilled workers is least significant in manufacturing industry and exhibits short sightedness of employer.

The higher illiteracy and deficient skills have resulted in lower productivity. According to the ILO, the average labour productivity in Pakistan-- just 2.90 per cent between 1980 and 2005—is lower than other East Asian countries. It is so because the Asian tigers ‘developed with equity’. Unlike Pakistan, their economic growth helped in reducing poverty and shrinking the income gap inequality.

The facts suggests that GDP increased, on average, by seven per cent in the last five years while poverty also increased as ‘more people fell below, earning $1 per day’ according to an ADP report. The impact of higher growth did not trickle down to the poor that comprises one-third of the total population; the unskilled labour is part of this segment.

The three-fold increase in the prices of kitchen items during the last eight years has further increased the hardships of the labour class as 70-80 per cent of their income is spent on food items. The ‘minimum wage’ is the only instrument that provides some little benefit to those whose industry observes labour laws.

The labour laws are applied merely on 10 per cent of the formal sector. The agriculture sector, road transportation, construction, retail and wholesale sectors are out of domain of the labour laws. Wages of the majority of workers in these sectors are less than Rs2500 per month i.e. far below the minimum wages.

On the Labour Day, the government annulled the IRO-2002, lifted the ban on the labour unions, decided to increase the minimum wages up to Rs6000 per month, and raised pension amounts and other benefits. But these are the cosmetic measures.

The ‘social dialogue’ among all the stakeholders is the right way to evolve an agreement between them on the labour policy and ensure its implementation’ in formal and informal industries.

Opinion

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