Notwithstanding the quarter-page newspaper ads from industrialists gushing about the govt for its support during the pandemic, garment factory workers faced a high level of wage theft throughout 2020 and beyond.
According to a 193-page report on Covid-19–related wage theft within the global garment supply chains released by the Asia Floor Wage Alliance (AFWA) on Thursday, factory owners in Pakistan denied quite $85 million in wages to 244,510 workers from a sample of fifty industrial units within the name of order cancellations and non-payment for existing orders from global brands.
The denial of wages and benefits rightfully owed to employees constitutes wage theft.
“Even though (it) peaked in April 2020, workers consistently experienced wage theft throughout the year and well into 2021, with no real sign of recovery,” said the report, which is predicated on a survey of 605 workers from 50 garment factories in Karachi, Lahore, and Faisalabad. About 96 percent of those factories employed quite 1,000 employees.
Workers reported an overall wage theft of 29pc in 2020, with a pointy decline of 61-69pc in wages within the total lockdown (March-May) and 26pc within the partial lockdown (June-October).
All garment factory workers experienced employment shocks within the sort of either layoff (86pc) or terminations (14pc), the survey revealed. About 81pc of the workers were pushed below the planet Bank-determined poverty level, measured at $3.20 each day on a purchasing power parity basis, between March and should of 2020.
The survey revealed that workers with five years of labor experience didn’t have enough savings to bridge over even a one-month layoff period without reducing consumption, incurring debt, or selling assets.
Using foreign trade numbers from the UN Comtrade Database, the study noted exports declined 67pc and 40pc in April and should 2020 on an annual basis. However, garment exports registered a positive rate of growth from mid-June and outpaced the 2019 figures from September due to trade relaxations and incentives for garment exporters. Therefore, overall exports in 2020 declined by 2pc. “Wages never recovered to the pre-pandemic levels in 2020 as workers continued to experience wage theft of around 5pc during the post-lockdown period.”
Interviews revealed most garment workers were laid off for one or two months and didn’t receive any monetary support from any source during this era.
Most workers who were terminated didn’t receive the legally mandated severance payments. those that were re-employed later reported a rise within the unpaid overtime compared with the preceding year.
Subsidized loans not used effectively
The depository financial institution of Pakistan approved subsidized loans amounting to Rs238bn for wages in 2020. But the advantages from these programs weren’t effectively transferred to the workers within the sort of wages, the report said.
At the height of the crisis in April 2020, 88pc of the respondents were laid off. About 67pc of the respondents still had no job in May. The layoff trend declined after June, although 11pc of the workers were still unemployed by the top of 2020. About 86pc of the terminated workers didn’t receive their termination benefits and legal layoff wages.
Although employers must pay twice the regular hourly rate for overtime work, no worker interviewed as a part of the survey was purchased their overtime at the legally mandated rate even during the pre-pandemic period.
Regular workers are entitled to health services and cash benefits from the provincial-level Employees’ Social Security Institutions or ESSIs (PESSI in Punjab and SESSI in Sindh). Employers are required to contribute to both schemes under the law. But around 65pc of the workers didn’t receive any Social Security benefits even within the pre-pandemic period, the report said. These numbers “significantly increased during the lockdown,” with around 80pc of the workers reporting that they didn’t receive SESSI/PESSI contributions in April and should.
