‘Labour rights in Pakistan curtailed by design,’ Karamat Ali-PILER
Karamat Ali is a founding member and current Executive Director of the Pakistan Institute of Labour Education and Research (PILER). A veteran trade unionist, Mr. Ali played an integral role in the labour movement of the 1970s. He graduated from University of Karachi, and earned his Master’s degree in Labour Studies from the Institute of Social Studies, The Hague, the Netherlands, in 1984. He has written extensively on labour and peace issues for academic journals and the national media. In this interview, Mr. Ali talks about the state of unionisation in the country, social security, and minimum wages.
BR Research: Why does Pakistan have low levels of unionisation?
Karamat Ali: Only one percent of labour force in Pakistan is currently organised, which is arguably the lowest level of unionisation in the world. To understand the reasons behind this, we will have to go back to the days before 1947.
Before the partition, the workers of this region had very broad rights under the India Trade Union Act 1926 (ITU). Under that law, all and sundry could form unions as per their desires and requirements, whether it is industry unions, sectoral unions, organisational, or geographical unions.
Globally, in 1945, there used to be World Federation of Trade Unions (WFTU), but then began the Cold War, and the WFTU was confined to socialist bloc countries, and a new federation called International Confederation of Free Trade Unions (ICFTU) was formed by the capitalist bloc.
After the partition of subcontinent, the ITU continued in Pakistan and many unions were formed under that law. In 1951, when industrialisation had just picked up in Pakistan, the level of unionisation in the country was about 25 percent of labour force.
However, as the Cold War gathered heat, there was this misplaced assumption that if workers are allowed to organise, the country would fall to the communists, whereas communism was to be stopped. Gradually, therefore, the biggest trade union on our side of the border, Pakistan Trade Union Federation – which was previously a part of All India Trade Union Congress and had a left tilt – was not allowed to work by the state policy. And to achieve these goals, many people were put into jail.
In 1958, when Ayub Khan imposed martial law, he created many distortions in the country’s political and economic framework. But the worse was his order to repeal the India Trade Union Act 1926 as well as the 1947 Industrial Disputes Act. There were many serious repercussions of throwing the basic legal structure out of the window, and for ten years there was no legal structure for workers to organise themselves.
Finally, in 1969 under Yayha Khan’s regime, the Industrial Relations Ordinance was passed that has continued since then. Now the provinces are making their own acts following the devolution of labour from federal concurrent list to provinces.
BRR: What made Yahya pass the Ordinance?
KA: The Ordinance of 1969 came after a lot of hue and cry, strikes, and protests by workers in which many workers were killed as well. This was because between 1958 and 1968 the wages of industrial workers had depreciated by 45 percent in real terms. Therefore, after a hiatus of many years, the tripartite conference was called in 1968 under the framework of International Labour Organisation (ILO) and that resulted in the passing of Industrial Relations Ordinance 1969. Later, however, when Zia-ul-Haq came to power, he began to track down unions under the pretext of Islamisation.
BRR: What is the biggest difference between the 1926 Act and the 1969 Ordinance being currently followed?
KA: In the 1926 Act, except for uniformed army officials and soldiers, everybody could form a union. All government officials, including the police and the non-uniformed employees of army could and indeed had a union. However, in 1986, a review mission by ILO found out that the Industrial Relations Ordinance of 1969 excluded 75 percent of the labour force. Moreover, due to further exclusionary rules and limitations, in its current form, the law is applicable on only 10 percent of the labour force, of which the organised are only one percent. The legal framework is so restrictive and exclusionary today such that workers can only make unions at enterprise level, and there can be no sectoral or industry-wide unions.
A big issue has been the lack of acceptance of unions. Normally, the state leads by example by giving government workers the right to organise themselves under the ILO conventions ratified by the state. However, the Pakistani state has not given any legal rights to its workers to organise themselves. Before Ayub Khan repealed the 1926 Act, almost 60 percent of unions were from the public sector. Now there are none.
BRR: Tell us a bit about ILO’s framework.
KA: The ILO’s basic framework is tripartite, which means the government, the employers, and the employees represented by their respective bodies engage with each other in a consultative manner to take decisions on bargaining, industrial relations, laws that affect workers, and so forth. That Tripartite Labour Conference is called once a year and as a result of that conference a Standing Labour Committee is formed, which has equal representation of employers, government, and the workers. The last time that Tripartite Conference was held in Pakistan was back in 2001. Until the 18th Amendment, it was the centre’s responsibility to call that conference but after devolution, provinces should at least call that conference at the provincial level.
This is in violation of international conventions. As an ILO member, Pakistan has ratified the conventions, especially conventions 87 and 98 and also the Tripartite Convention 141, and therefore the state have the obligation to call this conference on annual basis.
BRR: How many unions currently exist in Pakistan, and who gets to represent the workers in the Tripartite Conference?
KA: First of all, the fact that only one percent of workers are organised creates a major representation problem. Second, it is the state’s job to ascertain the most representative organisation of workers in the country. In Pakistan that does not happen. In fact, the state does not even know the number of unions in the country.
In India, their labour ministry ranks the top 10 trade union federations based on their membership. In Pakistan, this ranking is not available, since the provinces have stopped compiling and publishing that data. The federal government once used to publish a directory of industries, and the provincial labour departments used to publish a directory of trade unions that contained the key details of all the registered trade unions, such as their membership.
Similarly, there used to be a quarterly publication called ‘Pakistan Labour Gazette,’ which not only contained the numbers for registered unions and their membership, but also contained very pertinent information about labour courts such as the number and type of new cases, or pending cases in the court. But all these publications have been stopped for the last 20-25 years, and so nobody knows the actual number of unions.
BRR: Then how does the government decide which workers body it should engage with?
KA: The selection is an arbitrary decision by the government. The state only allows those unions to rise that are loyal to the state. It has blatantly intervened in the trade unions; the unions that the state did not like politically or ideologically were stopped from working smoothly, whereas those unions that the state favoured were given better room to work and were also chosen as official representatives of the workers.
BRR: Do employers stand to benefit if workers are allowed to be organised at industry or sectoral level?
KA: To some degree they may. For example, if there is a workers’ association for textile industry then it is better for employers because the basic condition of workers will be uniform, and it will reduce the time, money, and effort each employer spends in negotiation with their individual enterprise-level unions.
Employers can have longer-term agreements with the industry workers about wages, health and safety, and working conditions. And in return, the employers can insert clauses to improve worker productivity. At present, worker productivity is a part of labour negotiations of bigger firms but not of smaller firms. Smaller firms stand to benefit if there is an industry-wide worker association.
However, even in the big organisations, labour negotiations are hardly a matter because nearly 80 percent of the workers are hired through third-party contract system, leaving the workers without the recourse to labours’ rights of organisation. So basically, both the state and the employers don’t want the workers to be organised.
BRR: What is the single biggest problem with social security system in Pakistan?
KA: Pakistan’s experiment with social security is very fragmented. In 1965, we started social safety institutions, and it was made in two parts catering to West and East Pakistan. When in 1969, one unit was broken down into provinces in West Pakistan, the social safety institutions were also provincialised; when in fact it was not supposed to be provincialised, since this was all one contiguous area unlike the distance between West and East Pakistan. Later, when they established the EOBI, they made it a federal body. The Workers Welfare Fund (WWF) is also a federal body. So, it is a hotchpotch and needs to be simplified.
In 2001, a task force was formed, and their unanimous recommendation was that these organisations should be merged and a single autonomous body should be formed with its own independent governing body that can perform all the various functions of social security including healthcare, old age benefits, unemployment benefits, pension, death grants, etc.
In principle, the EOBI, the employees’ social security institutions in the provinces and the Workers Welfare Fund all belong to the domain of social security. I think these three institutions should be merged and a single National Social Security Fund ought to be formed. Social security should be made universal and the government should impose a social security tax, say on bank transactions, and provide social security to all and sundry.
BRR: What is your assessment of the EOBI?
KA: The state of affairs of EOBI and provincial social safety institutions can be gauged by the fact that barely five million workers are registered with both these organisations out of an estimated labour force of 60 million, of which about 56 million are employed, according to government statistics.
The EOBI law says that if any organisation employs five or more people, then those workers have to be registered with the EOBI by the employer. But most organisations don’t do that. Even if the company is hiring third-party contractual workers, even then the contractor firm should at least register with the EOBI, but they don’t do that.
BRR: But businesses often complain that EOBI officials abuse their powers and harass the employers?
KA: Until and unless the state makes social security a universal right, the government officials can abuse their powers. But employers don’t have clean chit either. For instance, in the famous Baldia factory incident; only 300 workers were registered with the EOBI, whereas about 1,700 workers were employed there.
The employers usually send the contribution cheque to the EOBI, say for 300 workers, but there is no list of names of workers attached to that cheque; so it could be anybody. Employees also don’t know whether their EOBI contribution is being made or not.
BRR: Recently, employers have taken the Sindh government to court after it made its own EOBI law after its devolution. What is the solution to EOBI’s devolution?
KA: EOBI should not be devolved. The majority of industrial workers in Sindh do not hold Sindh domicile. They are migrant workers from Punjab and Khyber Pakhtunkhwa, and when they retire they go back to their hometowns. So if you want to provincialise the EOBI, then who will make the payment to migrant workers? Right now, provincial governments are demanding the devolution of EOBI funds in proportion to the contribution they made over the course of years. But in the case of Sindh for example, the majority of workers for whom the EOBI contribution has been made in Sindh actually belong to other provinces. So social security has to remain a central body.
Similarly, at present, the collection under WWF and WPPF goes to the finance ministry, and the finance ministry uses that money to balance its budgets even though it has no right over these monies. And when they distribute that money to provinces, they use the population-based formula, whereas most of the collection is based on percentage of profits, which makes Sindh’s contribution to WPPF the highest.
A similar sense of arbitrariness also exists in the case of minimum wage fixation, although the institutional arrangements exist by way of tripartite board under the Minimum Wage Ordinance 1969. But historically, unfortunately, the minimum wage fixed in Pakistan has been 50 percent less than the minimum basket of goods and services needed to survive.
BRR: Fifty percent less? Has there been some research to support that?
KA: Plenty! In 1969, the minimum wage for unskilled workers in Karachi was fixed at Rs140 and for all other cities it was fixed at Rs120, because of the cost of living differences. In 1972, a Punjab University found that when Rs140 was fixed in Karachi as minimum wage, the actual amount that was needed based on cost of basic living was Rs275.
In 2001, the minimum wage was set at Rs2,500, though the original recommendation to the cabinet was Rs3,500. After a while, a Planning Commission study found out that, based on cost of basic living, the minimum wage should have been fixed at Rs4,700 in 2001, instead of the Rs2,500.
This year, the Asian Living Wage Conference was held in Islamabad and shed light on the wage structure of Asian countries, especially those involved with heavy concentration in garment and textile business. In that conference, a study by Wage Indicator Foundation found out that the minimum wage in Pakistan should be at least be Rs25,000, whereas at that point in time it was Rs13,000. Another recent study by Asia Floor Wage Network, which also focuses on garment sector wages, found out that minimum wage in Pakistan should be Rs31,000.
BRR: Devolution, they say has, caught governments unprepared; how do we ensure that laws are in harmony?
KA: Pakistan has ratified the ILO conventions but the relevant laws and the institutional arrangements are not in conformity with the conventions. Our laws curtail the freedom of workers and are against the essence of the conventions. In the wake of devolution, the state has to recognise that it is she which has signed the ILO convention and therefore she has to ensure that provinces comply with the conventions. To that end, not only the Council of Common Interests has to be strengthened, but the centre should also pass a framework as a minimum requirement that all the provinces should meet.
It is important to note that this region has had a long history of labour rights. The India Trade Union Act 1926 was formed more than 20 years before the ILO ever finalised its two conventions on unionisation and collective bargaining.
The ITU was passed by the Imperial Legislative Council nominated by the then Viceroy, and the biggest driving force behind the passing of that was Barrister Mohammad Ali Jinnah.
The Quaid-e-Azam, who was himself a President of All India Postal Workers Union, almost single-handedly had the ITU passed by the legislative council. So, it is quite ironic that the founder of this nation fought for workers’ rights, yet the workers are worse off in today’s Pakistan.
