New York July 30 2021: Pakistan is a beneficiary of the U.S. Generalized System of Preferences (GSP) program as well as the EU’s GSP+ program, both of which require labor standards to be upheld, reported by US Department of State.
Pakistan has a complex system of labor laws. According to the 18th Amendment to the Constitution, jurisdiction over labor matters is managed by the provinces. Each province is in the process of developing its own labor law regime, and the provinces are at different stages of labor law development.
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In the Islamabad Capital Territory and provinces of Punjab, Khyber Pakhtunkhwa, and Balochistan, the minimum wage for unskilled workers is PKR 17,500 (c.$110) per month. In Sindh, it is PKR 17,000 (c. $105) per month. However, the minimum recommended living wage by the Pakistan Institute of Labor Education and Research (PILER) is PKR 31,000 (c. $200) whereas ILO has recommended a reference wage of at least PKR 25,000 (c. $165) per month. Legal protections for laborers are uneven across provinces, and implementation of labor laws is weak nationwide. Lahore inspectorates have inadequate resources, which lead to inadequate frequency and quality of labor inspections. Some labor courts are reportedly corrupt and biased in favor of employers. In July 2020, the Pakistani government amended the Employment of Children Act 1991 to include child domestic labor as hazardous work. The decision applies to the Islamabad Capital Territory; provinces are able to adopt the measure via a provincial assembly resolution. On January 23, 2019 the Punjab Provincial Assembly passed the Punjab Domestic Workers Act 2019. The law prohibits the employment of children under age 15 as domestic workers, and stipulates that children between 15 and 18 may only perform part-time, non-hazardous household work. The law also mandates a series of protections and benefits, including limits to the number of hours worked weekly, and paid sick and holiday leave. On January 25, 2017 the Sindh Provincial Assembly passed the Sindh Prohibition of Employment of Children Act, 2017. In August 2019, the Balochistan Assembly adopted a resolution to eradicate child labor in coal mines.
The Senate passed the Domestic Workers (Employment Rights) Act in March 2016, but the bill has not progressed in the National Assembly. An amendment to the federal Employment of Children Act, 1991, which would raise the minimum age of employment to sixteen, has been pending in the National Assembly since January 2016.
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According to Pakistan’s most recent labor force survey (conducted 2017-2018), the civilian workforce consists of approximately 65.5 million workers. Women are far under-represented in the formal labor force. The survey estimated overall labor participation at approximately 45 percent, with male participation at 68 percent and females at 20 percent. The largest percentage of the labor force works in the agricultural sector (38.5 percent), followed by the services (37.84 percent), and industry/manufacturing (16 percent) sectors. Although the official unemployment rate hovered at roughly 6 percent pre-COVID-19, the figure is likely significantly higher. Additionally, there are as-yet no reliable unemployment statistics since the COVID-19 outbreak. In 2018, the UN Population Fund estimated that 29 percent of Pakistan’s population was between the ages of 10 and 24 and according to 2017-18 labor force survey estimates unemployment for 15 to 24 year old was 10.5 percent.
Pakistan is a labor exporter, particularly to Gulf Cooperation Council (GCC) countries. According to Pakistan’s Bureau of Emigration and Overseas Employment’s 2019 “Export of Manpower Analysis,” the bureau had registered more than 11 million Pakistanis going abroad for employment since 1971, with more than 96 percent traveling to GCC countries. Pakistanis working overseas have sent more than USD 20 billion in remittances each year since 2015. Remittances of more than USD 2 billion per month have continued from mid-2020 through February 2021 despite the negative impacts of COVID-19 that has resulted in many overseas Pakistanis returning to Pakistan over the last year.
Pakistani workforce is insufficiently skilled Says government sector contacts
Federal and provincial government initiatives such as the National Vocational and Technical Training Commission and the Punjab government’s Technical Education and Vocational Training Authority aim to increase the employability of the Pakistani workforce. However, the ILO’s 2016-2020 Pakistan Decent Work Country Program notes that, “Neither a comprehensive national policy nor coherent provincial policies for skills and entrepreneurship development are being applied.” The ILO report notes that “a small fraction of vulnerable workers are covered by social security in one form or another, while access to comprehensive social protection systems is also limited.” The ILO’s 2016 Decent Work Country Profile states that in 2015, only 9.4 percent of the economically active population – excluding public sector employees – were contributing to formal social security systems such as old age, survivors’, and disability pensions.
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Freedom of association is guaranteed under Article 17 of Pakistan’s Constitution. However, the ILO indicates that the Pakistani state and employers have used “disabling legislation and repressive tactics” to make union formation and collective bargaining “extremely difficult.” A report compiled by ILO in 2018 noted there were a total of 7,906 registered trade unions with a total membership of 1,414,160. However, this may underreport the actual figure because it pertains to the number of members declared at the time of union registration. As membership grows over time, provincial labor departments and the National Industrial Relations Commission (NIRC) do not regularly update their records. According to worker representative organizations, the estimated unionized workforce is approximately two million, which would represent roughly three percent of the total workforce in Pakistan. Provincial labor departments are responsible for managing trade union and industrial labor disputes. Each province has its own industrial relations legislation, and each has labor courts to adjudicate disputes. Recent strikes have been spearheaded by public sector workers, such as teachers and public health workers.
The ILO’s 2016-2020 Pakistan Decent Work Country Program states that “exploitative labor practices in the form of child and bonded labor remain pervasive…” and notes “the absence of reliable and comprehensive data to accurately assess the situation of hazardous child labor, worst forms of child labor, or forced labor.” The report also identifies weak compliance with, and enforcement of, labor laws and regulations as contributing to poor working conditions – including unhealthy and unsafe workplaces –and the erosion of worker rights.