In the recent budget minimum wages for unskilled workers has been raised to 17,500/- per month w.e.f 1.7.2019. In our country implementation of all laws is very weak, particularly labor laws. It appears as usual it is a political decision without any serious thought. In Punjab minimum wages has been increased by Rs. 2,500/- from Rs. 15,000/- per month to Rs. 175,000/- per month. Is there any data available with Federal/Provincial Governments to ascertain level of implementation of minimum wages for unskilled workers, no data has ever been available on this subject.
As an Industrial Relations & Human Resource expert and teacher of industrial relations and management as per my assessment in Punjab its implementation is not more than 40%. In Punjab what will be the implementation level once minimum wages are 17,500/- per month. I am sure the percentage will drop. The implementation level has increased to some extent due to social compliance audit conducted by leading importers and GSP plus status. What is the benefit of promulgation of a law which we are unable to implement for the last many decades. It is beyond the ability and capacity of the governments to implement minimum wages even 30% implementation will be a big success.
A small textile unit employing 1000 workers will have to pay additional Rs. 30 Million per year.If the existing financial position of our industry can bear this additional expense without any increase in profit.
Production or productivity implementation of minimum wages in multinational and big local groups of repute has never been a problem; the real issue is informal and small sector which comprises 70% of our workforce. I personally know many organizations where minimum wage of Rs. 15,000/- per month has never been implemented till to date. This law is a double edge sword on the one hand due to financial condition of our industry they are not in a position to bear this additional expense. On the other hand Government does not have mechanism, to implement this law. Obviously when I am unable to pay either I will pay less or otherwise sack workers.
The Government should not make mockery of labour laws and stop enactment of such laws which they are unable to implement. If we cannot measure anything we can never implement it. Better we concentrate on economic development and enhance GDP to 6 % which is in the best interest of workforce.
The writer has over 30 year’s experience of working with multinational & national group of repute as an Industrial Relations/HR Expert
