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The labour policy should be realistic and equitable.

Economic Review: What is the state of Labour-Management relations in the denationalisation era?

Parvez Rahim: It is too early to comment on this evolving development. l understand that managements of the majority of the denationalised units are under an obligation not to retrench their |inherited' staff for a period of one year. In the meantime the employees of denationalised units may be facing problems of adjustment in the new environment. in this respect even the first threshold of change for the employees i.e. adapting themselves to a task oriented management, and working in a more challenging environment needs to be monitored. Therefore, the state of Labour-Management relations in the denationalised units is yet to manifest itself fully. The true picture will emerge, once the dust has settled.

ER: Can you quantify labour productivity in Pakistan and whether it has improved in the last five years?

PR: There are no statistics available in order for one to quantify labour productivity in Pakistan. Regarding improvement in the productivity over the last five years, I cannot comment authoritatively on the public sector industries. However, productivity has decidedly increased in the private sector organisations, either due to BMR (Balancing, Modernisation, Replacement) carried out in the existing plants or the setting-up of new plants with inherent advantages of production process efficiencies which contribute to better labour productivity also.

ER: Absenteeism is said to be the main constraint in achieving the high productivity in every industry. What measures do you suggest to minimise absenteeism so as to increase productivity?

PR: Absenteeism is a significant problem faced by employers the world over. We can certainly adopt some of the techniques used in the advanced countries to counter this behaviour amongst employees. Recently, a US based international publisher of materials on workplace health and safety, and human resources management, conducted a survey on absenteeism. The survey was designed to determine absenteeism rates and subsequent costs for companies of various sizes and in different industries. These included finance and banking, manufacturing, health care, wholesale/retail services and utilities. In addition, the survey looked at the effectiveness of certain absence-control programmes.

The mean absence rate for all employees in the survey was 3.079%. This amounts to 7.5 days of paid sick leave for every 251 days worked in a year. The total cost for paid sick leave reflected in the survey was $ 50,000 for small companies to and $ 2.5 million for larger companies annually. This did not include the hidden costs such as overtime to cover for sick employees, temporary help to replace absentees, supervisory time spent to find a person to cover, impact of decreased morale or lowered productivity of those who have to work harder for someone chronically absent and catch-up time required by returning absentees. The rate of real and feigned sickness absenteeism in Pakistan may be three or four,times higher than the USA experience. Here even the law allows 16 days sick leave in a year, which is 5.82% of 275 average working days in a year in our country.

To check these alarming costs, companies are exploring methods to control the sickness absenteeism. As people do get sick, it is unrealistic to set a goal of zero absenteeism. The true objective is to establish programmes that penalise those who abuse the sick leave privilege. It is also desirable to reward employees who consistently have good attendance records. Employees remain away from work because of social, cultural, economic and behavioural as well as medical reasons. Many absent themselves because the work is dull, unrewarding, possibly hazardous, stressful, of low status, and physically demanding. The employee may have insurmountable family problems that receive greater priority than the job. insignificant symptoms may been larged to such psychic proportions that the daily reporting to work appears inconceivable, or the supervisor-worker relationship may be such that staying away becomes the only means of copying by avoidance.

In the developing countries the occupational health staff in organisations assist their managements in evaluating reasons for repetitive absences purportedly due to illness. They delineate the social, domestic and emotional factors in the absentee's life. If as a result of this exercise some job-related aetiologic elements are uncovered that the management could reverse,then counselling sessions are held with the employee concerned, which do help in alleviating attendance problems.

In Pakistan, majority of the employers either do not believe in tackling the issue through this reformative approach or consider it worthless to devote so much time and energy in improving an employee's attendance. Instead of correcting the situation they prefer to take disciplinary action against the employees, which back fires in most cases. Nevertheless,the fact remains that the persons abusing sick leave facility place their organisations at a competitive disadvantage in terms of direct and indirect costs.

In our experience of dealing with this issue, the following methods can help in managing this problem of absenteeism effectively and lead to improved productivity:-

- investigating the causes of absence

from work and then removing them

wherever possible.

- Introducing incentive schemes for

employees achieving high attendance,

such as the induction of a good

attendance allowance, or making yearly

encashment of sick and casual leave

more attractive for the employees.

ER: The problem of increasing unemployment is becoming serious in our country. What measures do you propose to help ? PR: It is difficult to be brief in responding to such a complicated issue, which directly impacts the social fabric of our society. Briefly, I would suggest that there is a need to bring about drastic changes in our education system. Instead of imparting education which does not prepare youths for getting jobs, the system should be geared to first identify and then educate and train them in fields which are more suited to their nature and aptitude. Consequently if they cannot get jobs, they should alleast be able to earn a living for themselves, by utilising their skill in small businesses and trades.

ER: Employers hire professional managers to run the industrial activities smoothly. But professional trade unionists are unbearable to employers. Your comments? PR: The professional managers are only responsible to the organisations in which they are employed. They are an asset to the company. The professional trade unionists, who may be union leaders in several organisations concurrently, are particularly and practicably responsible to none. They appear to have nothing at stake. if they lose the leadership of one union, they can conveniently switch over to another. Since the professional labour leaders are by and large ego centric, they tend to be minimally interested in the success and long term objectives of an organisation. They may therefore always be confronted with a conflict of interest in their calling.

The local union leaders who represent the workers employed in the same organisation have a better knowledge of the problems faced by their colleagues and the "capacity to pay" of their employers. When unions are led and guided by an outside labour leader, they are dominated and motivated by the latter's style and ethos. Therefore, the local union leaders are not afforded opportunity to mature and gain confidence in handling their own affairs effectively and inde- pendently. The absence of professional trade unionists, I believe, allows employees to get a better deal from their employers on the platform of mutual success.

ER: Why do the employers demand hire and fire right and are against worker's right of strike ? PR: The employers having professional management would not expect an unbridled or arbitrary right to hire and fire. At the same time they would not wish for the unions to have the facility to call lightening strikes. The provisions with regard to the employment of workers and their terminations or dismissal from service are contained in the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968. The Standing Order No. 12 deals with the termination simpliciter, Nos. 13 and 14 prescribe the procedure for retrenchment and re-employment of retrenched workers and No. 15 covers the dismissal on account of misconduct.

Employers should not dispute the provisions of law regarding the retrenchment or dismissal from service. These are fair and in conformity with the rules of natural justice. The problem lies with the termination simpliciter. Prior to the 1972 amendment in law, the employer had the unfettered power to terminate the services of an employee, without assigning any reason, by giving him one month's notice or pay in lieu thereof, plus the benefit of gratuity. If that requirement was compiled with, the industrial courts had no jurisdiction to set aside the order or management. Although that provision of law could only be invoked where the services of a worker were to be terminated for any reason other than misconduct, but management fully exploited this to their advantage. The employers used it as a guise to avoid legal formalities of holding an enquiry in cases of misconduct. In the amendment effected in 1972, it was made mandatory for the employer that while terminating the services of a workman, he should explicitly state reason for the action taken. Since the induction of this clause the employers right to carry out the termination simpliciter has been drastically curtailed.

There is no doubt about the need for making a clear distinction between the dismissal due to misconduct and termination for other reasons. A balance could be struck whereby both the rights of the employers and the workers are well protected. I suggest that the employer should have a right to terminate the services of a workman who is inefficient, careless or a malingerer, which may be achieved by amending and revitalising the Standing Order 12. Currently these acts are omissions of a worker are merely termed as misdemeanours under Standing Order 15 and therefore he can either be reprimanded or a negligible fine may be imposed. Surely this system can be rendered more equitable and eff ective as a deterrent.

In case this termination right is given to the employer then he should be required to pay to the worker a reasonable yet attractive amount of compensation for his action. This will facilitate the worker to seek an alternate vocation, which is more suitable to his skills and temperament. The employer should also be obliged to engage his replacement within a specified time to obviate the possibility of victimisation. So far as the workers right to strike is concerned, it is well protected under sections 26 to 33 of the Industrial relations Ordinance, 1969. I fully support this right provided in the Ordinance. Afterall this is the only alternative avallable to the workers through which they can ensure that the employers accept their genuine demands.

ER: What is your opinion about the feasibility of the well publicized Self-employment Scheme of the present government? PR: There are two aspects of the scheme, which have a bearing on the people at large:

a. Funds allocated for the scheme b. Benefit to the unemployed youth:

A significant level of funding has been made available for this scheme. Whether it does assist a million people in standing on their own feet, needs to be seen. My hope is that the same should not be at the expense of the 30 million, who live below the poverty line and who could have been helped with these funds. The loans by themselves cannot create jobs, nor the borrowers can discover overnight new avenues of self-employment, which call for aptitude and training. For this ambitious project launched by the Prime Minister, a training programme on a nation-wide scale should have been provided first. A network of institutes set up throughout the country to impart skills to young men to make them an asset to themselves and to the society would have been the appropriate precursor. Nevertheless the cause being noble and progressive, and that it touches the quality of life of people, I wish the scheme is successful in achieving the desired objectives.

ER: is it incorrect to say that the present government's tilt is more towards employers? PR: There has been no change in the government's labour policy to show that its tilt is more towards employers. On the other hand soon after coming into power the government had legislated the payment of Rs. 200/-per month as Special Allowance to the industrial workers effective from 1st December, 1990. This payment was |levied' by the government inspite of protests from the employers who felt that organisations having collective labour agreements with the unions should be exempted from it. Personally, I do not favour, expect or even suggest a pro employer labour policy from the government. The policy should be realistic and equitable so that it fosters a congenial industrial work environment, which is mutually supportive of both labour and management.
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Title Annotation:Industrial Relations in Pakistan '92; interview with Parvez Rahim
Author:Raza, Moosi
Publication:Economic Review
Article Type:Interview
Date:May 1, 1992
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