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Labour welfare schemes.

Labour Welfare Schemes

For the democratic country and an Islamic Welfare State as Pakistan claims to be it is necessary that there should be a code of conduct whereby it is possible to provide a just and equitable treatment to all sorts of Employees particularly the Labour working in factories. In the 1970's the fever of socialism was pervading in most of the Third World Countries. Mindless of the results the Government of Pakistan nationalised all the big industries and banks. It also made out a number of Labour Laws and created a number of Agencies for Workers' Welfare Scheme. Many of the 160 or odd articles of ILO were adopted without going into detail whether they suited our country or not. A policy of hatred between employers and Employees was adopted. Professional leaders started making Trade Unions, even in cottage scale industries and there was a mess wherein neither the employers benefited nor the employees. In all progressive countries the fundamental spirit in Employer and employees relation is that the industrialist gets the maximum uninterrupted production and the labourers are remunerated handsomely.

In most of the developing and progressing countries particularly the East Asian Giant Exporters of Textiles such as Bangkok, Korea, Taiwan, Hong Kong etc., the remuneration of Labour is linked with productivity. The concept of minimum wages is becoming out-dated. Moreover it can be observed in big factories or in such institutions where the nature of a worker's job is not defined or determined. In small industries particularly the cottage scale industry employing less than 100 workers the conception of minimum wages does not suit.

The most illogical part of the story is that there is no participation of labour in the schemes made out for their benefit. All the levies and laws like Factory Act, Social Security, Insurance, EOBI, education Cess, in short, every law of levy is applied upon or paid by the Employers on behalf of Employees. The result is that the Labourers are not at all interested how these labour welfare schemes work, what they collect, how they disburse it? It will also be noticed that the majority of Employees in small industries and even in big institutions do not even bother to get their registration card either from the Employers or the Government Departments. The reason is that they get little or poor service from the Agencies which collect these levies.

These levies have neither served the purpose of welfare of Labourers nor have they in any way provided a base for increasing the productivity of the Employers. A dispassionate study will show that many an industry have been dis-integrated in small portions or independent departments resulting in serious quality problems. The worst hit are the labour-intensive industries of value added Textile sector. Field study will prove the contention. The conception of integrated industrial unit, particularly in Towels, Hosiery, Knitwear, Gloves, Garments etc. etc. has been buried under the debris of "not possible to implement" conventions of ILO and borrowed ideas of socialism. Weaving is done somewhere in small units, stitching under other separate roofs, bleaching and dyeing in various sheds; the entrepreneurs taking as much precautions as possible to employ minimum number of Labourers under one roof and one name. All stress on quality improvement is meaningless till such time the work is carried out in an integrated atmosphere. The entrepreneurs are ready to spend huge amounts in transporting their unfinished products from one roof to another for stagewise finishing to avoid the labour laws as much as possible, at the cost of quality due to lack of supervision and too many separate places of business. This is one single reason why not a single Towel, Hosiery or Garment unit has been installed which carries out work from weaving stage to |finished goods and packing stage. The fact should always be kept in mind that these industries create one simple job not in million or lacs of rupees but in a few thousand rupees, unlike Spinning, Sugar and Cement industries.

Now let us study what is the position of big factories employing a greater number of people in private sector - we don't talk of Public Sector because in these factories productivity and profitability is no concern of the management. It is the Government which suffers and for which all the rulers right from Ziaul Haq to Nawaz Sharif are lamenting but unable to do anything. In private sector capitol intensive industries are very few. Moreover except for these few, no big factory allows the entry of Labour Inspectors in their premises. Only high officers of Labour and other allied departments are allowed access to top management, and whatever agreement is made by them is anybody's guess. The workers of these big factories are handled by tough supervisors who know the art of dealing with them and it is also a fact that layoffs, lockouts and legal processes are common in these factories. The workers of the big factories are neither happy with their jobs, nor do they earn more than what they are earning in small industries.

Another weak point in these schemes is about their implementation. From Khyber to Karachi, these laws are enforced only into enclaves of the country. Karachi and its adjoining areas of course are the most lucrative fields for Labour Department and then Lahore to a lesser extent. Otherwise in the whole of Pakistan there is no labour welfare Agency worth its name which is effectively working. This creates a sense of deprivation for law abiding people particularly Karachi which has the greatest labour and employees' force.

The laws framed under labour welfare scheme have such penal clauses which are not found in other laws. Warrants or confiscation of property, unilateral assessments, payment before appeal, audit by different departments seizure of account books etc. are the main features of these laws. Even in the Income-tax, Sales-tax and Excise etc. there are a number of remedies provided for the aggrieved party but the laws embodied in these welfare schemes are unique in their nature and arbitrary in favour of the Department concerned.

Considering all that stated above and many other lacunas which are not discussed so that the reader is not bored, it will emerge that these laws do not provide any relief to Labourers and Employers, rather they hinder the productivity, increase harassment by these Departments and the Government also does not receive any substantial amount which it may spend on Labour Welfare Schemes. A few politicians and professional labour leaders get Air Tickets and lavish boarding and staying charges at the cost of ILO. This is the only benefit which we get from this Convention.

Recently recommendations have been made to Government by Prime Minister's Committee that factories employing upto 100 workers be exempted from Factory Act and other laws. If these recommendations are accepted it will go a long way to help industrialisation of the country in one jump but in case the Government feels that under political pressures it would not be possible for it to adopt those recommendations; another suggestion is being made which will not only generate huge income for Government to spend on Labour Welfare but also remove all constraints and harassment of Employers to increase their production and install integrated factories which will improve the quality and bring added foreign exchange in the Export Sector particularly in Textile value-added items. Following industries should be granted total exemption from Factory Act, Labour Laws, Social Security, EOBI, Workers Participation etc. etc.

- Cloth, Canvass and Towel Industry

having 4 or less looms underone roof. - Garments Industry having 10 or less

stitching machines under one roof. - Hosiery having 4 or less Knitting

machines excluding big warp knitting


All the units having more than the above number of machines should be charged a single tax of Rs. 50/-per month which should be collected by a single agency; and should be deposited in State Bank/National Bank through Treasury Challans. One Single Agency should be formed called "Labour Welfare Bureau". Simple laws should be formulated in order to help the Employers to register themselves and contribute towards this tax. On the basis of rough calculation the total tax collection will yield more than 5 billion rupees annually, if a proper census of the machinery is carried out in all the Industrial Areas of the country - not restricting to Karachi only. This fund should not be administered by the Government alone. A Board of Directors should be formed in which the representatives of Employers and Employees should also be accommodated. The main purpose for this fund should be on the following priority basis:
 (1) Education (2) Hospital
 (3) Housing (4) Old Age Pensions

These are the real four objectives which if achieved would not only improve the slot of Labourers but also create a disciplined Welfare Social Security umbrella for the Labourers. Trade Unionism has never established itself in this country. No doubt it works in Public institutions, but cannot work successfully in small industries. The reason is lack of education of our working class. Out-side professional labour leaders not only exploit the Employers but also they fool the community whom they represent. There are examples where such labour leaders have been responsible to harm the cause of workers and it will take a lot of space to dilate on this subject.

Recently one Minister put a question what the Industry has done for the labourers. The simple answer is that the bureaucrats have done for the country? What the Maulvis have done for Muslims Welfare State? What a Jagirdar, Zamindar and Wadera has done for the Muzareens and Haris? The industrialist class is no better than the other classes. Feudal lords sitting as Ministers are very keen to formulate laws for welfare of Labour whereas the condition of their own Haris and land tillers are worst, rather more deplorable than the workers in industries. At least good or bad some laws are there to give a sense of security to Industrial workers but the Haris, land-tillers and the work force of Waderas and Zamindars forming more than 70% of population are practical serfs, slaves. Any how this was just a passing remark. Coming back to labourers the best relief which we can provide to them is to collect a large amount of Labour Welfare fund which should be administered among others by their own representatives.

In big cities, particularly Karachi which has the biggest number of cottage industries value added industries and exporting industries - the skilled labour is no where to be seen. It is a fact that more than a million Bengalis are working in every industry. The local labour force is simply not available. And it is also a fact if these Bengalis are extradited from Pakistan 50 per cent of the industry will collapse and cause a severe set-back to the production and export of value-added goods. This is what our Labour Laws have done to the Labourers of the soil. It is high time that the Factory Act and Labour Laws are streamlined. Innovative measures should be adopted instead of borrowing ideas from ILO. The Socialist approach has totally failed. Soviet system inspite of all its utopian and idealistic philosophy has collapsed. In this country of 11 millions, are there no brains who can formulate a just and viable labour policy. All the Labour Laws and Factory Act were drafted by British Government before partition. We are just adding commas and full stops to these outdated documents and claim that we are going to make Pakistan an Islamic Welfare State. No Sir, it is impossible. Unless there are pragmatic laws, unless there are funds with the Government to improve the living conditions of people nothing can be done for labour, worker or industrialist. The IJI has started its Government with a lot of fanfare and its real test is a labour policy which should be framed in such a manner that neither the worker, nor the Industrialist exploit each other. It is only possible if the matter is studied objectively and in a pragmatic approach. We will have to re-link the labour policy from the pressures of Politicians, Waderas and Professional Labour Leaders. Factories where over 100 labourers are employed can enjoy the luxury of the present labour policies but cottage scale industries and value-added textiles are not going to increase production and export if these laws persist.

S.M.A. Rizvi, Chairman, Towel Manufacturers' Assoc. of Pakistan
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Title Annotation:Special Issue: Industrial Relations in Pakistan '91
Author:Rizvi, S.M.A.
Publication:Economic Review
Date:May 1, 1991
Previous Article:Industrial relations in ICI Pakistan.
Next Article:Human resource development.

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