Developing a friendly labour
policy and work environment for economic growth
A labour policy in the backdrop of globalization, market liberalisation
and increasingly competitive environment simply can neither afford antagonising
employers and investors nor workers; it has to be industry, investment and 
labour friendly

By Dr Sabur Ghayur

There are a lot of hectic efforts underway in the Ministry of Labour and Manpower (MOLMP) to come to rescue the Prime Minister Yusuf Raza Gillani of yet again his failing to match words with actions. It is now well over a year when he had stated at the Pakistan Tripartite Labour Conference (PTLC) about his government’s intention to announce a new labour policy on the eve of May Day (of 2009). While, one is yet to understand the “logic” for a new policy as there already exists the labour policy of 2002 (LP-02), providing feedback on the areas to be covered in the new policy nevertheless deserves attention.

A labour policy in the backdrop of globalization, market liberalization and increasingly competitive environment simply can neither afford antagonizing employers and investors nor workers; it has to be industry, investment and labour friendly. Ideally, the over-riding goal of the policy should be none other than to lay a solid foundation for sustained industry, decent employment and economic growth in conditions of equity and social justice.

The new policy should be developed with adequate considerations on: (a) improving working conditions, (b) fostering generation of greater employment opportunities including specific measures aiming at enhancing employability, as well as productivity, (c) developing and strengthening social safety nets, especially giving due considerations  to medical cover and old age benefit, (d) ensuring a functioning bi- and tri-partism,(e) providing a level playing field by fostering partnership and fair labour practices, (f) tapping vast employment potential overseas, and (g) ensuring consistency with other policies especially those related to trade, industry, small and medium enterprises (SMEs), investment and human resource development. 

The new policy should also be based on an understanding of the factors that constrained the effective implementation of LP-02. The country’s labour laws – out dated, complicated, overlapping and simply out of tune to the current competitive environment – were indicated by the policy to be consolidated/classified into six groups. The policy had stipulated progressive extension of labour laws and welfare measures to an informal economy and other un-organized sectors. It had also talked about improving labour welfare institutions –Employees’ Social Security Institutions (ESSI), Employees’ Old Age Benefits Institution (EOBI) and Workers Welfare Fund (WWF) - and also making them autonomous. These all largely remaining mere “statement of intent” will have to be given due attention in the new policy especially with regard to “when” and “how”. 

Nevertheless, there are almost ten vital areas that the new policy should consider. These encompass the following:

(1) It should make an elaboration of the necessary motivations for a new labor policy. Indeed, it should be based on a critical appraisal of the LP-02 as well as accounting for the factors acting as constraints in the implementation of other important policies and programmes that were developed as its follow up, namely: Labour Inspection Policy (LIP) and Labour Protection Policy (LPP) of 2006, Decent Work Country Programme (DWCP) of 2005, National Employment Policy of 2008 and National Emigration Policy of 2009. The employment and emigration policies, as yet, are to be presented to the Cabinet. 

(2) The policy should develop an understanding of the importance of labour standards and their compliance in the context of globalization. It should clearly highlight the growing importers’ requirements with regard to labour standards and social labeling; these are emerging fast as determining factors in gaining market access and sustaining it.

(3) The policy should make special reference as how it intends to improve working conditions of men and women engaged as home-based workers, domestic workers, contract workers, agriculture workers and informal sector workers. Besides, the issues of working conditions and remunerations in particular application of minimum wage, mechanisms for social security and labour inspection would have to be adequately addressed.

(4) It is the determination of minimum wage. The policy should clearly lay down the mechanism for minimum wage fixation. In fact, it should establish a tri-partite minimum wage council with MOLMP serving as its secretariat.

(5) The policy should also stick with current macro-economic environment and policy framework. A careful analysis of macro economic environment and also policies with regard to trade, investment/foreign direct investment, SMEs, education and especially technical vocational education training (TVET) is critical in developing greater and effective linkages and synergies with the policy.

(6) The policy should clearly define its principle. Its foundation should be none else than ensuring respect to rights as enshrined in the Constitution of the country, as well as  international obligations originating from the International Labour Organization’s (ILO’s) conventions ratified by the government of Pakistan (GOP). It is important to stress here that it is obligatory for a ratifying country to bring its law and practice in conformity with the conventions.

(7) Greater and effective social dialogue should be indicated as the “key” in promoting not only industrial peace and harmony but also “rapid industry, employment and economic growth”. In this regard, the policy should establish a mechanism for regular convening of PTLCs together with its follow up mechanism.

(8) The policy should settle two workplace related issues. Whereas, employers are asking for the right to “hire and fire” to adjust and adopt, the workers have shown concern over lack of “employment security”. Yet another issue relates to an unduly longer period normally witnessed in seeking resolution of disputes amongst employers and workers.  Alternate dispute resolution (ADR) mechanism needs to be focused, discussed and announced in this policy. The ADR should primarily be based on the most representative workers and employers organizations with adequate backstopping from the experts.

(9) The policy should clearly spell out the “road map” and an action plan for effective implementation. It should clearly spell out measures to be taken with regard to (a) classification/codification of labour laws, (b) raising productivity, (c) generating productive employment opportunities within the country and overseas, (d) skills development programmes, (e) skills up- gradation for working women and men, (f) implementation of labour laws including reforming labour inspection machinery, (g) elimination of child labour, (h) reforming workers’ welfare institutions, and (i) medical coverage and old age benefits.

(10) Lastly, a policy essentially being developed to promote industrial peace and harmony has to take on board the stakeholders and in particular the most representative employers and workers’ organizations, as well as provincial governments. Hence, it has to be prepared and finalized with their effective integration. In addition, series of consultations needs to be organised by the MOLMP with the concerned federal ministries, provincial governments and other interest groups. This should culminate by organising final consultations at the provincial and federal capitals and indeed in the announcement of a mutually agreed “industry and worker friendly labour policy”.