July 13, 2022

Staff Report

LAHORE: Pakistan’s workforce participation rate of 20 percent for women is one of the lowest both in South Asia and globally, according to a recent World Bank report, adding that factors such as low education levels, mobility challenges and gender norms limit Pakistani women from entering and being retained in the formal workforce.

In a report on ‘supporting legal reforms to increase women’s workforce participation in Pakistan’, the World Bank cites that its SHIFT (Securing Human Investments to Foster Transformation) program has helped improve the rights and conditions of home-based workers (HBWs) and other vulnerable women working in Pakistan’s private sector, resulting in the adoption of 10 laws by the country’s provincial assemblies.

Women’s participation in workforce greatly constrained

However, the World Bank reported noted that Pakistani women’s participation in the workforce is greatly constrained. “The new laws are intended to extend informal HBWs’ access to social security, fair wages, and improve formal women workers’ access to childcare, separate toilets, transportation, to achieve equal pay, and to end sex discrimination,” the report says.

Pakistan has lifted restrictions on women’s ability to work at night, a measure that has eased women’s access to labor force and lifting constraints for them. The step also improved Pakistan’s score in the World Bank’s 2022 Women, Business, and Law (WBL) indicators.

New laws to ease conditions for 3.6m women HBWs

The laws are expected to impact a sizable proportion of at least 4.4 million vulnerable HBWs in Pakistan. According to the World Bank report, the data collection activities will be critical in developing a deeper understanding of the impact of the legal reforms. Further, amendments in labor laws (Shops and Establishments, and Factories Acts) achieved through the SHIFT reforms will ensure better working conditions and facilities for 3.7 million women workers in the formal private sector, reduce restrictions on women’s work hours, and encourage more women to enter and stay in the workforce.

“For the first time, hundreds of thousands of informal home-based workers living in KP and Balochistan provinces will be recognized as formal workers because of KP and Balochistan’s HBWs laws. This is a great achievement for women HBWs who have been demanding for their labor rights to access minimum wage and social security for decades.” Zehra Khan, General Secretary, Home Based Women Workers Federation, was quoted as saying in the report.

20% women participation in workforce lowest in South Asia

At 20 percent, Pakistan’s workforce participation rate for women is one of the lowest both in South Asia and globally. Low education levels, mobility challenges and gender norms limit women from entering and being retained in the formal workforce, the report says. Consequently, a significant proportion of women workers are represented in the informal sector as homebased workers (HBWs).

Pakistan has 4.4 million HBWs, of whom 3.6 million are women. These workers perform work for remuneration from their home or other premises of their choice. They mainly operate as piece-rate or own-account workers involved in production and manufacturing chains to make products like textile articles, leather goods or raising livestock for agriculture and byproducts. Because of gaps in available data, estimates likely underrepresent the true extent of home-based work.

HBWs don’t figure in economic and labor policies

According to the World Bank report, women HBWs are especially vulnerable to exploitation from contractors/middle-men and typically belong to poorer households, having little to no formal education. They have limited access to markets, training, and most public services and work amenities. “HBWs lack rights and social protections, face greater work and safety hazards, and are given little to no consideration in economic and labor policies.”

The report highlights some of the constraints women face that limit their participation in the workforce. In addition, only 10 percent of non-agricultural workers in the private formal sector are women.

Studies indicate that provision of specific facilities, such as transport by the employer, separate toilets for women, and childcare facilities, are a major factor in encouraging women’s labor force participation. “The need for enhanced legal protection for women workers to improve their access to basic facilities in the formal sector was identified as a critical challenge during consultations with experts on gender and social inclusion in Pakistan.” Therefore, the SHIFT program is geared to respond to gaps in legal coverage pertaining to women workers both in the formal and informal sectors to enable greater female labor force participation in Pakistan, the report says.

Women face pay discrimination

The SHIFT program resulted in the adoption of laws and amendments by provincial assemblies in two broad areas.

The labour laws helped enhance women’s economic participation in shops, commercial establishments, and factories which previously gave them limited access to basic facilities e.g., segregated toilets, childcare facilities, and safe transport options.

Sex based legal discrimination also existed in working hours and equal remuneration for work of equal value for women compared to men. These gaps have been addressed through amendments to two different labor laws (factories act, shops, and establishments act) in all four provinces and two additional laws in Balochistan (Industrial and Commercial Employment (Standing Orders) Bill, Payment of Wages Bill) in 2021. Easing women’s access to labor force and lifting constraints for them was possible because of these amendments. Assemblies in Sindh, KP and Balochistan have passed the reforms in these labor laws (total 8 laws), while Punjab assembly is currently in the process of adopting the changes after cabinet approval in 2021.

Labor laws for protection of homebased workers

HBWs face some of the most challenging working conditions and remain highly vulnerable to exploitation given that they are largely undocumented and outside the ambit of any legal coverage (except in Sindh where the Homebased Workers Protection Act was passed in 2018). Through SHIFT, the laws to enable protection and welfare of homebased workers have been passed by KP and Balochistan assemblies in August 2021, and April 2022 respectively (two laws). Punjab, and federal Cabinets have also approved HBWs laws, and the cleared drafts are currently with the national and Punjab assemblies for adoption. HBWs laws are transformative and will result in the documentation of the HBWs workforce for the first time in Pakistan. Official registration of these informal workers will enable greater access to social security, service delivery, and legal rights as formal labor, as well as greater awareness and bargaining power for better wages. Further, the actions will result in creation of evidence and data to support responsive research-based policies in future.

The next main challenge is to ensure that the laws are implemented. The capacities of client counterparts remain weak. The World Bank, jointly with provincial labor departments, has launched a mixed method research to collect comprehensive and representative data of 13,000 HBWs in KP and Balochistan to help bridge knowledge gaps and develop more responsive programs based on evidence.

The World Bank report says the legislation serves as an important first of many steps needed to help vulnerable workers on the ground, adding that a comprehensive survey to collect robust data on the status of HBWs has been launched in four districts of KP and Balochistan.

Support to Government in data collection, developing the rules for implementation, HBWs’ registration, and improving HBWs’ access to skills training and other facilities are all crucial for the implementation of the HBW laws and will provide a baseline for evaluating the ultimate impact of the reforms, the report concludes.


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