Trade Unions: Losing Steam

Majyd Aziz

A Worker’s Union is an integral part of an industrial or commercial unit’s working environment. The workers have a fundamental right to form an association to project, promote and protect their rights, their needs, their demands, and their remunerations. Unions are formed not only in the public sector organizations but are also very significant in private enterprises. There can be more than one Union in an enterprise but only one is designated, through a democratic process, of representing the workers as their Collective Bargaining Agent. Labor Unions got their primary boost after Zulfiquar Ali Bhutto and his Pakistan People’s Party came into power in 1972. The socialist mandate of the government gave impetus to workers’ representatives to form their own Unions and also group into Workers Federations. 

There were labor leaders galore and there was this sense of perceived omnipotence in most of them much to the consternation of industrialists and businessmen. Industrial unrest became the norm and Labor Courts were inundated with all kinds of cases, mostly frivolous, or to coerce the employers to accept the dictates of this new band of leaders. Although there were some moderate persons among the labor leadership, the majority of them were in a belligerent mood and they created havoc in many establishments. A large number of industries closed down, many industrialists left the country and, with the government in no mood to rein in the radical elements, Pakistan saw decline in industrial output, in new investment and in attracting even foreign investment. The labor leadership obtained more power after Bhutto started nationalization of industries and service sectors. This further aggravated the dismal scenario and Pakistan lost five years of growth apart from the tremendous loss of half of the country in the 1971 War in East Pakistan.

Come Martial Law of Gen Zia ul Haq in July 1977, things seemingly cooled down. Radicalism yielded to realism and the workers’ representatives were subdued through various measures, including banning unions in public sector organizations. The pressure eased to some extent on the private sector and there was again infusion of domestic and foreign investment into the country. Of course, there were strong unions in many private enterprises but by and large industrial peace became a common feature in industrial estates. With the advent of the Benazir Bhutto regime, the sparks flew again with the result that there was a marked revival of the labor extremism that had been tamed in the past many years. 

The Musharraf government put lot of emphasis and gave considerable importance to attracting investment and rebuilding the country. Labor leaders were told not to rock the boat and were clearly reminded that the goalposts had changed. A labor and social activist was made the Labor Minister and he very shrewdly sidelined the mainstream labor leadership. The aging leaders were gradually put to pasture and the new leaders came with a conciliatory outlook and a pragmatic vision. The labor unrest in private enterprises dwindled down drastically and most of the enterprises conveniently got rid of unions and in-house agitators and adopted the hiring of contract workers rather than a permanent workforce. Labor lost its luster and its critical mass. This continued even after the Zardari government came into power. It was felt by the business community that there would be a strong labor transformation after the advent of the PPP government. Premier Yusuf Raza Gillani did convene a Tripartite Labor Conference but it turned out to be nothing more than a PPP worker jalsa thus vitiating the purpose of this crucial Conference.

There has been a paradigm shift in the trade union influence among workers over the past two decades. The gradual veering away from having a permanent, on-record, labor force in the plants led to a proliferation of so-called contract workers that has over the past many years led to this decline in unionized membership. This was not an overnight transition nor was it a planned or a deliberate employer strategy. This was the result of other factors that impacted upon the trade union movement. Labor Unions have become skeletons of the past. It is a fact that except for enlightened employers who accept and encourage healthy union activities in their plants and businesses, a deep-rooted dislike to demands of workers more often than not discourages employers from allowing workers to chart a course on the pathway of basic labor rights.

The catalytic factor has been the focus of many labor federations away from unionization of private sectors and concentrating on having a strong control on workers in the public sector organizations. It was in state-owned enterprises where real potential lay and where they could muster political patronage, power and privileges. More importantly, labor federations were and still are more or less personal fiefdoms of the leaders. This individualistic control is averse to a true democratic hierarchy or succession. Ergo, a labor federation is usually an extension of the leader’s personal vision.

Another factor that diverts the attention of labor leaders is that they are often on foreign-sponsored junkets where they hobnob with counterparts from other nations and use all means to source funding for their projects. While appreciating their desire to generate foreign funds, it has been alleged by some quarters that at times their proposals for sponsorships highlight negative aspects of the labor situation in Pakistan, often detrimental to the image of the motherland. 

The inability of the tax collectors to enforce a broad-based tax regime has encouraged a pushback to an undocumented economy in many areas and sectors. The high General Sales Tax, the unbridled influx of smuggled, under-invoiced and mis-declared foreign goods, the exorbitant utility charges, the menace of extortion and deteriorating law and order, and other negative factors have aggravated the situation and thus SME employers are not eager to get themselves registered or maintain documentation. This is one more reason why many enterprises are out of the tax net. Thus workers of these units are deprived of many of the legal remedies and prescribed benefits under the law. It also impacts upon the efforts of labor leaders to increase their membership base.  

The momentum of the labor unionization movement has decreased. There are no more formidable and strong labor leaders anymore. This has been understood and accepted by the moderate leaders of the workers. They are, thus, cautiously and prudently working within the system while leaving their rabble-rousing dramatics for the Red Salute rallies or celebration of May Day. They now seriously want the wheels of economy to move. As Charles Dickens said, “Industry is the soul of business and the keystone of prosperity”

(Part 1 of 2-part series)