Constructing fair workplaces

In a first move in recent days that pushed the envelope on policies beyond strategies for containment of the coronavirus pandemic, the federal government announced a package to support the construction industry.

For this policy, we were offered the justification that the construction sector is the second largest employer in the country and its rejuvenation will have great upstream and downstream benefits for the economy. The government has chosen to offer incentives, both in the form of an amnesty, effectively ‘whitening’ black money and in a flat taxation regime, intended to attract investment in this sector. Others have and will continue to provide informed opinions on both those strategies.

I am chiefly concerned that if a primary benefit of offering such incentives is to get a large population back into the workforce on the quick, let’s at least make sure that governmental concern with this sector is matched with protections for the labourers who will be employed.

As a preliminary, it is imperative to note that forcing people into close proximity, as they are on construction sites, is ill advised when the coronavirus threat is still increasing rather than subsiding. If however, it is going to happen then the first necessary intervention is of ensuring the health of these workers and their families. Difficult though it is to move beyond this, other protections should also be extended at this point.

It is estimated that 7.6 percent of Pakistan’s workforce has been employed in the construction sector, and yet, these nearly five million workers are utterly bereft of even the patchy and inadequate protection that other so-called unskilled workers are afforded. Addressing this absence means seeing clearly the sheer immorality and illegality of the ‘daily wager’ classification.

We’ve been hearing a great deal about the precarity of daily wagers but we have to actively undo the prejudices that create such a classification in the first place. Doing away with the exploitative “daily wager” model is the best way to protect the labourers that the state purports to care for. As this pandemic has opened up the gap between those who can afford to lock-down and those who cannot, it is no longer enough to speak compassionately about the desperately poor.

The illegality of the ‘daily wage worker’ classification is made apparent in the fact that it is simply not anticipated in any of the statutes that currently define labour protections. Additionally, though in the common law a distinction can be drawn between an independent contractor and an employee, this has no relevance to the circumstances of the daily wage worker.

In the common law, the former is someone who uses their own tools, exercises considerable control over their labor and shares in the profit or bears the losses of an enterprise. An employee is someone over whose time and labour a direct relation of control is exercised and the exchange for that is a wage and other protections against an employer.

As illustration, some in the newly fashioned ‘gig’ economy, and of course consultants and other professionals, might reasonably be considered independent contractors. They may in fact prefer it that way because they have chosen greater autonomy, and in some cases tax exemptions and the like that are sometimes tailored for them.

When we speak about daily wage construction workers and other informal, contracted labour, the idea that they have chosen their condition would be a major obfuscation. Yet, by marking them as ‘daily wagers’ we are circumventing labour protections by purposely misreading the sheer desperation of their position in the labour market as an exercise of autonomy and flexibility.

Now, given this decision to restart the economy with all hopes pinned on the unrealized potentialities of a construction industry, we should be using this moment for bringing construction workers and others within the regulatory ambit of existing labour laws. By declaring that the sector now constitutes an ‘industry’, one classificatory encumbrance has already been overcome. The other exclusionary criteria that has traditionally been used to undermine claims for protection is the size of an enterprise that employs these workers.

Construction companies and contractors, by relying upon the ready availability of a rotating array of workers assembled in areas from where they can be recruited on a daily basis, have foregone all of the formal requirements and obligations of maintaining a regular workforce.

Where they would otherwise be responsible for ensuring that employees are given written contracts, expect regular working hours and overtime pay, guaranteed a minimum wage and provided protections against unfair practices, their reliance upon a ‘flexible’ – read ‘desperate’ – workforce allows them to circumvent all this. In addition, it provides an exemption from making contributions to social security and other social insurance funds, including the EOBI.

If construction workers are now being invited back to work, circumventing the public health emergency that should ensure a lockdown with a guaranteed income for all, they at least need to be protected. They need to have rights against their employers and the state needs to be the guarantor for these rights. This need not be mired in difficulties.

Each of the enterprises being offered incentives will necessarily be brought within the taxation net and therefore the formal sector. If protection of workers were made incumbent upon them for realizing these incentives, there would surely be a greater chance for compliance, even putting aside all reasonable concerns about the state of our labour inspectorates. In principle, nothing stops the state from imposing the requirement to maintain registers of employment and wages and of making contributions to social insurance funds for enterprises within this industry.

Even in better times, construction workers have lived their lives in peril, without protective equipment and without sufficient safety precautions to keep them safe. In April 2020, with coronavirus in our air and running through our land, sending them to earn their desperately low incomes without masks, proper ventilation or spaces to ensure their personal hygiene would be a callous and hostile act.

I’m not an economist and cannot begin to answer the question of whether this truly is the sector with the greatest potential for sustainable growth. However, I also cannot help bemoan the fact that we’re resorting to a hackneyed neoliberalism rather than forging a new direction for future economic planning.

If we were going to jump start construction, could it not have been on the back of a Naya Pakistan Housing Scheme more fully fleshed out as a Keynesian intervention in our faltering economy? That would have required a plan for selling affordable land and easing access to credit markets and construction materials. It could have happened through a loose regulatory structure that promoted mutual aid and enabled people to engineer new low-cost housing communities. It would also have allowed people greater control over their practices of social distancing.

A policy that supported a basic human security need for the many rather than the further concentration of wealth for a very few would have been the grander intervention that this moment demanded.

The writer is head of program at the Shaikh Ahmad Hassan School of Law, LUMS.