Contract Work and Greed

Since money, as the exciting and active concept of value, confounds and exchanges all things, it is the general confounding and compounding of all things—the world upside down—the confounding and compounding of all natural and human qualities.

Karl Marx

Increasing prevalence of contract work in the labor market is a global phenomenon. Low production cost and increase in productivity–the reasons cited by economists for contract labour—both lead to wealth accumulation. Thus, the hidden motive behind contract work is desire, or greed of the employer, for more profit, more money. No wonder, then, contract work is so confounding that even the ILO finds it full of complexity and riddled with ‘conceptual’ problems.

The ILO accepted its defeat in defining contract labour and establishing its scope. Since 1950 contract labour was being discussed in various ILO sessions. After 48 years when the draft Convention on Contract Labour was proposed by the ILO in 1998, it was not accepted by any country in the world. In 2006, the ILO shelved the idea of the Convention on Contract Labour forever and instead came up with Employment Relationship Recommendation or R198, avoiding the word contract labour in the text. None of countries has ratified R198.

Traditionally, contract labour was defined only by triangular relation, that is, the principle employer hires contract labour through a third party called contractor, or agency. For the protection of these workers, the ILO Private Employment Agencies Convention 181 was put in place in 1997. Pakistan has not ratified this Convention. Only 28, out of 185 ILO member countries, have ratified it. However, today more and more establishments, both in the public and private sector, directly hire workers on contract basis, thus avoiding the cost of benefits mandatory for regular employees.

In Pakistan, the employers save the contributions for social security, provident fund, pension, group insurance, compensation for occupational injury or death, maternity benefits and education cess through hiring contract workers. According to a 1992 report of a national seminar on contract labour, the public and the private sector each spends about Rs.150 million annually through the job contract agencies. If the establishments hire regular workers, the cost of production would increase three to four times. We can imagine the money the employers are saving today through contract work.

In recent years, contract workers in the public sector have been protesting against the injustice inherent in contract work. Recent example is of the policemen of the Punjab Constabulary who were out on the streets a week ago in Lahore. These retired army men were inducted in the police force on a year contract basis in 2012 and now the contract of 30 workers have been terminated. There is a slim chance for them as the duration of their employment was brief.

There are cases where workers not regularized by the government departments even after 10-20 year period have taken legal recourse and won. One such recent decision of the Supreme Court relates to several employees of the Communication and Works Department Punjab who were serving the department since 1998. The Supreme Court declared the employees as permanent. Another noteworthy example is the movement of the Lady Health Workers in the country inducted in the government national programme in 1994 for a paltry stipend of Rs. 2500 per month. The LHWs came out on the street in 2008 demanding wage raise and regularization. The Supreme Court ordered the government in 2010 to apply minimum wage law. The health workers’ demand for regularization was accepted by the Sindh government in September 2013 and by the Punjab province in September 2014.

In the Factory Act 1934, the definition of worker includes both a person employed directly or through an agency, thus both categories have same entitlements. The other important labour law in Pakistan, the Industrial and Commercial Employment (Standing Order) Ordinance 1968, classifies workers in six categories—permanent, probationers, badlis (substitute), temporary, apprentices and contract workers.

All workers, including contract workers, are entitled to benefits of social security, unionization, minimum wages, overtime, compulsory holidays, group insurance, under this law. Unfortunately, the workers hired by the factory, or establishment, through an agency or directly, are not declared as workers and thus they do not exist. There is no specific law to protect contract workers unlike India where employment of contract workers is regulated by the Contract Labour (Regulation and Abolition) Act 1970 that ensures minimum wages, health and safety, and some insurance provision. But due to lack of implementation the situation in India is similar to Pakistan.

Is there any light at the end of the tunnel? Aside proper legislation, strict implementation, good governance, only a strong labour movement can safeguard its rights and push the employers, the industrialists, the capitalists to put a rein to their greed for profit.

This article was published in Dawn on Sunday 3 January 2015 under the title Contract Work Woes.

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