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Businessmen Demanding Bailouts Are Least Concerned About Their Workers’ Woes

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Syed Azeem writes about factory workers in Pakistan who are at the risk of losing their jobs amid the coronavirus crisis because there is no record of their employment. Businessmen and industrialists are seeking bailout packages from the government to cope with the fallout of the economic crisis, but workers’ job security should also be guaranteed.

A crucially important aspect of the coronavirus crisis is that more than 70% of workers in Pakistan are on contract and the majority of them will be fired without compensation because there is no record of their employment anywhere.  The legal position of the mass closure of businesses is not clear. If it is a layoff or closure of business then legally, the factory is to first get permission from the Labour Court under Standing Orders s. 11. Otherwise it is a lockout and even the lockout needs to follow procedures under IRA 2012, which is giving notice to the union, negotiations, reconciliation, arbitration and then adjudication.

Therefore, is not clear what the legal standing for the mass layoff are since none of these procedures are being followed. The government needs to clarify through Ordinances the nature of this closure with proper legal protections for the workers.

So far, what is evident from the government’s steps and the demands forwarded by the industry is that they want bailout packages in the form of concessions for their businesses. The trillion rupee package has 3 parts: one is related to industry, which is making the demand of the release of Sales Tax Refunds and deferring debt services; the second aspect is PKR 100 billion for small and medium industry; the third aspect is PKR 400 billion directly for the poor.

The demands reveal industry’s core interests which do not show any concern for workers. The auto industry, for example, has asked for an exemption for the Turnover Tax for the year; reduction of import duty from 46% to 25% and reduction in GST by 59%. This industry went to the extent of demanding 70% reduction in duties on a permanent basis.

The main problem for labour is that it is not clear whether these concessions and bailouts will be tied to preserving employment or will be money that is unaccounted for. So far no mechanism is defined to address these issues. What labour should do is take a 3-level strategy while asking for their inclusion in any formulation of mechanism for bailout and relief.

  1. Constitutional and legal guarantees for workers compensation, job security, and living wages; full payment for the period of closure and guaranteed re-employment. This emergency should not be used to victimise workers or for industry restructuring at the expense of workers and the majority of the population of Pakistan.
  2. Where a business continues operation, there should be proper health security measures and safe transport for the workers.
  3. Most importantly, in each and every step of the bailout and restoration of industry, legitimate trade union representatives should have decisive roles.

In this situation, labour’s friends should be aware that this crisis is additional to the existing structural problems in the labour market. Labour’s duty is more than ever to take control of the direction of the steps being taken, through being informed, documenting and mapping all shifts, staying in close touch with workers and trade unions, building their organizations and labour action committees, pushing for industries that are relevant to the needs of workers, and claiming bailout money for the welfare of workers.


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