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INCREASING the prevalence of contract work in the labour market is a global phenomenon. Low production cost and increase in productivity — the reasons cited by economists for contract labour — both lead to the accumulation of wealth. Thus, the hidden motive behind contract work is the desire, or the greed of the employer, for more profit, more money. No wonder, then, contract work is so confounding that even the International Labour Organisation (ILO) finds it full of complexity and riddled with ‘conceptual’ problems.
The ILO accepted its defeat in defining contract labour and in establishing its scope. Contract labour had been discussed in various ILO sessions since 1950. After 48 years, when the draft Convention on Contract Labour was proposed by the ILO in 1998, it was not accepted by any country in the world. In 2006, the ILO shelved the idea of the Convention on Contract Labour and instead came up with the Employment Relationship Recommendation, or R198, avoiding the word contract labour in the text. No country has as yet ratified R198.
Traditionally, contract labour was defined only by triangular relation, that is, the principle that the employer hires contract labour through a third party called the contractor, or agency. For the protection of these workers, the ILO Private Employment Agencies Convention 181 was put in place in 1997. Pakistan has not ratified this convention. Only 28 out of 185 ILO-member countries have ratified it. However, today, more and more establishments in both the public and private sectors directly hire workers on a contract basis, thus avoiding the cost of the benefits that are mandatory for regular employees.
Employers save a number of costs by hiring workers on a contract basis.
In Pakistan, employers save the contributions for social security, provident fund, pension, group insurance, compensation for occupational injury or death, maternity benefits and education cess through hiring workers on a contract basis. According to a 1992 report of a national seminar on contract labour, the public and the private sector each spend about Rs 150 million annually through the job contract agencies. If the establishments hire regular workers, the cost of production would increase three to four times.
In recent years, contract workers in the public sector have protested against the injustice inherent in contract work. One example is of the policemen of the Punjab Constabulary that were out on the streets about a week ago in Lahore. These retired army men were inducted in the police force on a year’s contract basis in 2012 and now the contracts of 30 workers have been terminated. There are slim chances of redress for them as the duration of their employment was brief.
There are cases where workers who have not been regularised by government departments even after a 10-20 year period have taken legal recourse and won. One such recent decision of the Supreme Court relates to several employees of the Communication and Works Department, Punjab, who had been serving the department since 1998. The SC declared the employees as permanent. Another noteworthy example is that of lady health workers (LHWs) in the country, inducted in the government national programme in 1994 for a paltry stipend of Rs 2,500 per month. The LHWs came out on the streets in 2008 demanding a raise in wages and regularisation of their employment. In 2010, the SC ordered the government to apply the minimum wage law. The health workers’ demand for regularisation was accepted by the Sindh government in September, 2013, and by Punjab in September, 2014.
In the Factory Act 1934, the definition of ‘worker’ includes both a person employed directly or through an agency, thus both categories have the same entitlements. The other important labour law in Pakistan, the Industrial and Commercial Employment (Standing Order) Ordinance 1968, classifies workers in six categories: permanent, probationers, badlis (substitutes), temporary, apprentices and contract workers.
All workers, including contract workers, are entitled to employment benefits of social security, unionisation, minimum wages, overtime, compulsory holidays and group insurance under this law. Unfortunately, the workers hired by the factory, or establishment, whether through an agency or directly, are not declared as workers, and thus they do not exist. There is no specific law to protect contract workers, unlike India where the employment of contract workers is regulated by the Contract Labour (Regulation and Abolition) Act 1970 that ensures minimum wages, health and safety, and the provision of some insurance. But due to the lack of implementation, the on-the-ground situation in India is similar to that in Pakistan.
Is there any light at the end of the tunnel? Aside from proper legislation, strict implementation and good governance, only a strong labour movement can safeguard workers’ rights and push employers to cut down on their greed to make profits.
The writer is associated with Piler.
Published in Dawn, January 4th, 2015
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