LABOUR ECONOMICS AND INDUSTRIAL RELATIONS

 

By ABDUL AZIZ ARAIN
Aug 06 - 12 , 2001

The growth of large scale industrial and commercial organizations have brought about the sub-ordination of human values almost to property values

Population of the country contributes the source from which its labour force is drawn. In Pakistan since independence until the present time, the population has grown steadily. The entrepreneurs and the employees had been concerned with the socio-economic and political changes, besides the determination of level of employment, un-employment, and the productive capacity of the economy and sector-wise distribution of the employed persons within the country due to concomitment efforts upon job openings, employment, business opportunities, and other related economic growth factors.

The relationship between the size of population and the resourcefulness of the population to maintain itself economically was first analyzed in accordance with their natural relationship by Thomas R. Malthus in 1798. Malthus determined that the population was doubling every twenty five years. During the last 20 years 1981-2000 Pakistan population increased by 62% from 84.87 million to 137.51 million. Malthus pointed out that it was not possible to increase the food resources so rapidly to meet the requirements of the increasing demand of the population and laid emphasis that the growth of population must be curtailed either by "positive checks" or through "preventive checks." The theory set-forth by Malthus was used as a basis for policy recommendations to business and government. It could be concluded from his analysis that the effects of an increase in the money, wages, paid to a worker would increase the number of children rather than the raise in real income. Michael Sadlar in 1828 wrote that the capacity to reproduce of human being varies inversely with their numbers in a given space and time, the increase of population in certain area increase the density, and the rate of reproduction will decline. In 1842, Thomos Doubleday maintained that the rate of increase in population is greater among those who are worst supplied with food provisions. Herbert Spancer alleged in 1864 that fertility is reduced as life becomes more complex. A theory expounded in 1929, which is predominantly natural, though it contains some social elements, is that population growth occurs in cycles, according to this theory, youthful nations show rapid increases, but with passage of time the rate of growth decline and eventually there is a decline in the size of the population.

The most important factor affecting the population of Pakistan has been the higher birth rate, and the birth control policy have insignificant effects. The continuation of population increase trend would result in the attainment of Pakistan population over 172. million by 2010. Whereas the death rate has shown a continuous decline. This reduction of death rate has resulted almost entirely from a lowering of infant and child mortality and from a reduction in maternity death and deaths from various diseases.

POPULATION AND LABOUR PROBLEMS:

Although the population has continued to grow since the founding of Pakistan, over the entire period, it is evident that the rate of increase has been either increasing or constant. The rate of expansion of the population and the working age composition of the people must be studied in connection with labour problems. The number of workers, labour force participation ordinarily and directly related to the size of the population, influences the amount of competitions in employment. According to the latest statistics available the population and the distribution of employed persons by major industries division in Pakistan is as under:

Pakistan - Population, Labour Force, and Distribution of employed persons of 10 years age and above by major Industries - Division - 2000

Population

137.51 Million

.

Labour Force

39.45 Million

(28.688%) of population)

Un-Employment

2.42 Million

(6.134% of labourforce)

Employment Labour Force

37.03 Million

(93.866% of labour force)

Distribution of employed labour

Agriculture

16.35 Million

(44.15%)

Mining & Manufacturing

4.15 Million

(11.21%)

Construction

2.50 Million

(6.75%)

Electricity&Gas Distribution

0.36 Million

(0.97%)

Transport

2.11 Million

(5.70%)

Trade

5.45 Million

(14.61%)

Others

6.15 Million

(16.61%)

Source: Economic Survey of Pakistan, 1999-2000

URBAN - RURAL LABOUR FORCE: The ratio of urban and rural labour during the year 2000 is reported 33.39: 66.61 the studies and investigations have shown that birth rates are higher in rural areas, among the poor class, among un-skilled workers and among those with least education. Such statistics help to explain the changing industrial occupational and geographical distribution of the working force.

EMPLOYED PERSONS BY MAJOR
OCCUPATIONAL GROUPS -1999.

Maior Occupational groups

No: in Million

% Shares

Legislators, senior officials and Managers.

3.1

8.6

Professionals.

1.3

3.6

Technicians and associate professionals.

1.0

2.8

Clerks

1.1

3.0

Service workers and shop and market sales workers.

2.8

7.7

Skilled agricultural and fishery workers.

13.3

36.8

Craft and related Traders workers.

3.6

9.9

Plant & Machinery operator and assemblers.

1.7

4.7

Elementary (un-skilled occupations).

8.3

22.9

Total:

36.2

100.0

Source Economic Survey of Pakistan 1998-99.

UN-EMPLOYMENT: Un-employment is an involuntary state. An un-employed person is defined as one who is not working but who is looking for work or gainful employment. The Labour economists has made distinctions in between "un-employed workers" and "under- employed worker" and "un-employables." There are no standard classifications, a number of major groupings are commonly focused in economic literature, such as frictional un-employment, causal un-employment, seasonal un-employment, cyclical un-employment, technological un-employment and down sizing. Frictional un-employment involves the time lost in moving from one job to another, rather than losses constrained from a lack of employment opportunity. Frictional un-employment results from the incompatibility of persons working together with other workers. Casual un-employment results from the irregularity of the labour market in some trades and industries. Seasonal un-employment is the term usually employed with reference to those industries whose production is affected by the climate and weather effects. The production, particularly of agricultural commodities determines the employment opportunities of farm labourers, and include the workers engaged in fishing, canning, construction projects etc. Cyclical un-employment connected with the business cycle is the most harmful type of un-employment in an economy. Technological un-employment involves the displacement of workers by the introduction of new technological machines or the new invented productions processing techniques, and relate to greater output with smaller number of workers and re-arrangement of plant layout eliminating some workers.

Having realized the un-employment rate of about 6.1 per cent, the government is pursuing a multi-pronged employment policy which focuses on revival of agriculture and industrial sector as well as investment in Labour intensive sectors like small scale industry, social sectors, rural development programmes, provision of credit facilities for self employment, with the hope that these measures may arrest the increasing trend of un-employment, the outcome and the results are yet to be seen.

THE LABOUR MAKRET: Major employment opportunities are provided by the government, (Federal or provincial and local governments) and by private sector enterprises. Employees in government service generally have greater security and have been subject to less job connected tensions, but they have comparatively, lower pay scales and less opportunity for promotion than employees of private enterprises. There had been a tendency in the urban areas towards the concentration of employments in the large companies, size based on number of employees, rather on amount of capital. In the recent years there has been a growth in the number of large size firms and expansion in these firms.

The government is still the largest single employer, such as tele-communication, Electricity, Railway, Telegraph and energy sector and others. The rural areas women mostly engaged in agriculture and domestic small enterprises, whereas the majority of urban women are engaged in commercial and industrial organizations related to office and commercial jobs. The growth of labour force is not exactly correlated with the growth of the population. Women's participation rate is lower than men's due to cultural taboos and non-availability of suitable job opportunities. The female population of Pakistan 66.123 million constitute 48.101% of the totai population.

NEED FOR INVESTMENT - ORIENTED LABOUR LAWS: The Labour policy and the laws must be investment and employment oriented, having conformity with the current dictates of modern era of globalization. The business leaders are of the opinion that the labour laws had outlived their utility and were not beneficial to the workers either. The industry was being regulated extensively through multiple labour laws and agencies, which negated the very concept of privatization and liberalization. While comparing the labour productivity in Pakistan, it was emphasized that it was one of the lowest in the world and as such there was a pressing need for developing linkage between productivity and various kinds of financial benefits and remuneration, to the workers. It is observed that inherently and fundamentally our workers had the potential of doing hard work as they did while they are abroad. Need is to develop some mechanism to exploit their full potential by providing them enabling atmosphere in their own country, both through the efforts of government as well as private sector.

INDUSTRIAL RELATIONS: The Constitution of the Islamic Republic of Pakistan Article 17 and 18 guarantees the right of association and liberty to choose a trade or occupation to every citizen of Pakistan. Discrimination on the basis of gender, religion, race and creed has been prohibited. Pakistan had ratified 32 ILO conventions including five core conventions on human rights. National labour legislation is brought in consonance with the international labour standards through amendments in existing labour laws or by enacting new ones. Keeping in line with international labour standards, the government, through labour legisiation, fixes minimum wages, terms of service and conditions of work and also confers on workers and employees the right to settle industrial disputes concerning employment and non-employment, terms of employment and conditions of work through the process of Collective Bargaining.

Terms and conditions of employment bargained between management and the CBA are over and above the minimum provided under the law and the difference between the two levels of these symbolizes the effect of suo motu action of employers and the collective bargaining. Industrial peace and harmony play a pivotal role in the smooth running of industries and business operations and consequently the progress, development and prosperity of the country. Government provide policy guidelines for resolution of disputes while all major decisions are left to the two social partners to make within the bounds of laws on equal opportunity and fundamental human rights.

PRESENT INDUSTRIAL RELATIONS POSITION: Employers Federation of Pakistan recently conducted a survey on the Terms and Conditions of Employment of workers in Pakistan, published in 1999, inquiry was included in the survey about the Industrial Relations prevailing position. The response, out of 216 organizations participated in the survey indicated that 80 organizations do not have a trade union, whereas remaining 136 organizations reported existence of 221 trade unions. The findings of the survey indicate a good sign of Industrial Relations and reported prevailing position. Workers participation in management as under:

Workers Participation in Management of Establishment

No. of Companies

Private

Public

Multi- national

(A) STATUTORY PARTICIPATION

Ship Stewards

54

32

03

19

Work Council

66

41

04

21

Joint Management Board

55

34

03

18

Labour Management Committee

37

23

02

12

Canteen Committee

80

45

08

27

Board of Trustees for Workers, share in Companies profit.

79 46 05 28

(B ) NON-STATUTORY PARTICIPATION

Safety Committee

42

27

04

11

Provident Fund Committee.

72

42

05

25

Staff Welfare Committee

26

15

02

29

Staff Sports Committee

40

19

07

14

OVER-ALL DISCIPLINE

Through the survey questionnaire referred above, the experience of Management with regards to workers' attitude and discipline at work place was inquired. The findings indicate that there is a greater peace and harmony at the work place as compared to 70s and 80s when there were frequent incidents of strikes and the industrial scene was disturbed, because of friction between employers and workers. Table below indicate majority of the firms are much satisfied with the workers discipline these days.

Status of organizations

No. of organizations

DISCIPLINE STATUS (NO. OF COS.)

   

Excellent

Good

Satisfactory

Un-satis
factory

PRIVATE

127

50

69

04

04

PUBLIC

20

04

15

0

01

MULTI-
NATIONAL

46

22

23

01

0

TOTAL:

193

76

107

05

05