Labour cost

Published April 14, 2020
The writer works at the Pakistan Institute of Labour Education and Research.
The writer works at the Pakistan Institute of Labour Education and Research.

IN Pakistan, the impact of the novel coronavirus is startling, with the number of infected people growing each day. If the current trend continues, the numbers may soon run into tens of thousands if not more.

Mindful of the situation in many countries, the provincial governments have imposed lockdowns within their jurisdictions, with the Sindh government taking the lead on March 23, effectively restricting a population of over 47 million within their houses, including 14.9m citizens in Karachi alone.

The prompt measures have earned the provincial government considerable praise, in stark contrast to the decade-long perception of bad governance and corruption by the PPP. The longevity of the goodwill for the provincial government generated on account of its actions is yet to be seen, but the test for coping with the challenge has begun.

While the lockdown is being presented globally as an effective tool to curtail the quick spread of the virus, the actual challenge is to reduce the socioeconomic impact of the exercise. It is proving to be a strain on the labour force in the country, and particularly in Karachi, where millions are dependent on daily wages to earn a square meal for themselves and their families.

Pakistan’s labour force profile already categorises a large number of workers as vulnerable; they cannot sustain such shocks without adequate government support.

Workers cannot sustain shocks without government support.

According to the latest labour force survey, out of 65.5m workers in the country, approximately 72 per cent are in the informal sector, which means there is no monthly pay cheque to fall back on if they do not show up for work. Sindh alone has a 15.19m-strong labour force. If one excludes agriculture, which employs 38pc of the total workforce, the remaining 9.41m workers are largely employed in Karachi, which has been badly impacted by the lockdown. Over 6.5m of them are categorised as informal labour, and they are either contract employees, temporary workers, piece-rate earners, daily wagers, or home-based women workers who are technically not entitled and practically not paid any kind of money if they do not work on a day-to-day basis.

However, the Sindh government, at least on paper, has declared that all kinds of workers in the province must be paid wages during the lockdown period. The official order issued on March 22 by the home department says that ‘no worker shall be laid off and all kinds of workers shall be paid salaries and wages in full by their employers during the closure of business on account of lockdown’. The Sindh Epidemic Diseases Act, 2014, under which the order has been issued, did not explicitly provide any such powers to the provincial government.

Regardless of the good intentions behind issuing such orders and follow-up notifications, it is unlikely that the workers will be paid while they are away, unless the provincial government comes up with a practical mechanism to ensure implementation of its directives and addresses legal loopholes.

Such a monitoring and implementation mechanism could only have come through the labour department. However, besides the department, which failed to maintain a proper data of registration of workplaces and workers in the province, ensuring that all workers are paid during the shutdown seems unrealistic.

The department has only 555,000 workers registered with 9,869 factories and 37,000 shops and establishments in the entire province, which makes up a mere 5.8pc of the non-agriculture labour force in the province. The department, which has never been able to implement the minimum wage that it notifies every year in normal conditions, is unlikely to implement special orders for payment of wages to all workers in the province while workplaces remain closed.

One can expect the employers to pay their staff on moral grounds, which is expected only by a small number of formal-sector employers as those running businesses in the informal sector have their own explanations against paying workers during the lockdown.

The only short-term solution is to activate the existing tripartite mechanism in Sindh, in which workers, employers and the government come together to ensure that labourers are paid wages while businesses remain closed either as moral obligation or by law.

It is equally important to learn from difficult situations and build systems and mechanisms which are more long-term, sustainable and credible to be relied upon both in normal and crisis situations.

Lastly, the universal social security system requires immediate attention with a starting point of registration of all workers with existing provincial employee social security institutions as well as building the capacity of labour departments in maintaining a database and the implementation of labour laws.

The writer works at the Pakistan Institute of Labour Education and Research.

Published in Dawn, April 14th, 2020



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