ON May 5, 2022, the UN said: “More unions and collective bargaining are vital to help countries recover from the pandemic and to overcome crippling income inequality around the world.”. It stressed that collective bargaining ensures fairer wages across enterprises, sectors and industries.
According to ILO chief Guy Ryder, “Countries where more workers are covered by collective agreements, are also those with less wage inequality.” He said: “Where collective bargaining was supported and was an accepted practice, it played a key role in forging resilience during the Covid -19 crisis.”
We have seen unions during the pandemic agree to facilitate workers working from home and communicating with customers or colleagues via the internet, phone calls, etc. They helped put in place protections for front-line workers, secured jobs, protected earnings and prevented the spread of Covid in workplaces. But this is far from the case in many places. In the US, only six per cent of workers in private and commercial services are unionised, compared to over 60pc in Sweden and Denmark. In Pakistan, around two million of the workforce is unionised, constituting a mere 3pc of the total.
Successive governments in Pakistan have recognised the workers’ right to form unions. Pakistan ratified ILO Convention 87 (freedom of association and protection of the right to organise) and ILO Convention 98 (right to organise and collective bargaining) in 1951 and 1952 respectively.
However, during the first two decades, the formation of unions and collective bargaining, was mostly confined to the public sector such as Pakistan Railways, Karachi Port Trust, etc. Unionisation gained momentum after the promulgation of the Industrial Relations Ordinance, 1969 and Zulfikar Ali Bhutto’s encouragement.
There is no substitute for collective bargaining with unions.
Among the industries nationalised by Bhutto in January 1972 was Ittefaq Foundry and Works Ltd in Kot Lakhpat, Lahore. The government named it the Lahore Engineering and Foundry Ltd. I worked there as a labour officer. Before its nationalisation, no trade union activities were allowed by the owners within the factory. There was no concept of issuing appointment letters to workers and the only record of their existence was the attendance register.
Workers who remained absent from work without leave for a few days or demonstrated an inclination towards unionism, faced instant termination from service. No procedure laid down by law was followed.
After nationalisation, the workers found the environment quite conducive to form unions and started their activities with full vigour. Seventeen unions were formed at the Lahore Engineering and Foundry, but there was one collective bargaining agent. Soon after nationalisation, the CBA served a charter of demands to the management, which was headed by a new managing director, who was also the deputy director of industries in Punjab.
The latter took the wise step of immediately taking up the CBA’s charter of demands and himself led the management’s negotiation team. A two-year agreement was successfully reached with the CBA, revising and streamlining the salary and benefits of workers according to market trends, which brought decency and dignity to their employment.
The circumstances under which this agreement was arrived at are comparable to collective bargaining by the unions to safeguard workers’ interests during the Covid-19 pandemic.
I believe that even under normal circumstances, there is no substitute for collective bargaining with unions as the workers are directly affected by the terms and conditions of the agreement. We should bear in mind that management itself is not the only source of all knowledge and wisdom. It may be that the unions, presented with the limitations that circumstances impose, will see a way out which the management may have missed.
The periodical activity of collective bargaining provides an opportunity to the management to start preparations and planning for at least four to five months ahead of the commencement date of the new agreement. This activity would include carrying out wage and benefit surveys of comparable companies, planning to handle key demands expected from the union, preparing a broad strategy for negotiations, and finally a proposed package for reaching the agreement.
Mishandling of activity may lead to the disruption of the desired level of productivity or even prolonged strikes by the workers. Such a situation should be avoided at all cost as the losses incurred by the organisation, may outweigh the cost of the agreement.
The recommendations formulated by the UN should be fully endorsed as it is only through the process of collective bargaining that the management may come to know about the problems faced by workers, their pressing needs and expectations from the organisation.
The writer is a consultant in human resources at the Aga Khan University.
Published in Dawn, June 8th, 2022