Pension: A dream for informal sector workers  

Shahiduzzaman Khan   | Published: December 22, 2018 22:11:35


There is no denying that a large number of young people are entering the labour force every year. Those who were born 15-20 years ago have now become adults and are entering the labour force. But actual utilisation of their potential depends on the jobs they are getting.

Various reports and data show the country's educated unemployment rate to be high and this goes against the utilisation of youth labour force and full use of the demographic dividend. Preparation is also not enough to make full utilisation of the demographic dividend for several reasons. To make it happen,  youths need quality education.

A study of the Bangladesh Institute of Labour Studies (BILS) says people employed in the informal sector are deprived of benefits and social protection in the absence of employment contracts.

Some 88 per cent workers of the sector do not get appointment letters and 82 per cent do not have identity (ID) cards, according to the study. Informal sector comprises works such as windshield cleaning at traffic lights or manual construction work, for which income is not declared, tax is not paid and components of which are not included in Gross Domestic Product (GDP) computations.

By employing 86.2 per cent of the workforce, the informal sector neither complies with labour laws nor promotes decent work, according to the study. The informal sector provides no social protection like gratuity and provident funds and group insurance facility.

In most cases, informal workers face vulnerabilities at workplaces for lack of legal coverage. Some 61 per cent of the youths reported the practice of job expulsions without prior notice. Moreover, workers do not enjoy decent working hours, as nine out of every 10 youths work over eight hours a day.

Wage discrimination exists on a large scale due to lack of knowledge and education to negotiate salaries with employers. Some 57.6 per cent of workers do not always get festival bonuses while 86 per cent claim to have never received attendance bonus. Most never get transport and lunch allowance and money for refreshment and training.

Though a lion's share of the workforce is employed in the informal sector, productivity there is very low for lack of their required skill. Skills development training is a must to enhance productivity. Non-compliance to labour laws in the informal sector is the main barrier towards protecting decent work.

Workplace safety is practically unheard of in the informal employment sector, and there is no question of holidays, sick days or downtime. Brick kiln and construction workers have scarce drinking water and no toilet facilities to speak of. With wages being disbursed on a daily basis and no bargaining power with employers, they rarely take days off even when they suffer from ailments resulting from having to work long hours.

Given the dearth of official data, it is difficult to even ascertain the health problems faced by people working in the informal economy. According to a report, there are increased risks of malnutrition, physical and psychological disorder, respiratory trouble, heart attack etc due to the nature of their work, where they are forced to endure excessive labour and unhealthy work environment.

More than a million workers who work in the brick kilns of the country, which produce over 12 million bricks a year, often suffer from skin diseases and are susceptible to bronchial infections. Rickshaw pullers, for example, are addicted to various drugs as these help them deal with the adverse temperament of their work.

Bangladesh Bureau of Statistics (BBS) statistics show that nearly 88.5 per cent workers are employed in informal sector. In order to help graduate the country to a middle-income one, it is necessary to bring the informal workers under a legal structure. Middle-income status cannot be achieved without bringing the large number of informal workers under legal protection.

It is heartening to note that the government has recently formulated provident fund rules for initially 0.1 million workers in the country's informal sector to ensure their economic security. The labour and employment ministry will tie up with post offices and financial institutions, mostly banks, in this regard.

 According to the rules, formulated under a provision of Bangladesh Labour Welfare Foundation Act 2006, workers outside the purview of existing labour law will be entitled to provident fund facility.

There are more than 40 industrial sectors including garment, leather, pharmaceuticals, jute, ship-breaking, cold storage, plastic, chemical, fertiliser under formal sector where rights of workers are protected by the labour law.

But farm labourers, domestic helps, construction workers, street vendors, cottage industry workers, sweepers, cleaners and home security personnel are not covered by the labour law. This means they are involved in informal work.

Labour leaders, however, said a vast majority of the country's labour force is still deprived of their legitimate rights due to lack of proper laws.

According to the leaders, nearly 90 per cent of the workers in informal sectors are not allowed to form trade unions. They are farmers, blacksmiths, carpenters, rickshaw-van pullers, domestic workers, construction, electric, shoe, steel and engineering, welding workers, security guards, cleaners, tailoring workers and hawkers. They do not work under any regulated bodies whatsoever.

 The rules that have been finalised define workers of the informal sector as those who are not protected by the labour law and who have limited scope of being organised. After getting applications for opening provident fund account, post offices would inform the ministry which then would scrutinise them for approval.

According to the officials, initially informal sector workers' monthly deposit would be Tk 100 and the government will also contribute the same amount to these accounts from the workers' welfare foundation (WWF).  The tenure of the provident fund would be 25 years. A worker would not get government contribution if he or she fails to continue the fund for less than five years.

The fate of the said provident fund is still unclear as the informal sector workers are not apparently knowledgeable about such a move. Workers in the private sector are long demanding for a pension fund. There is not even a broad hint about it from the government. If this is the case, will the informal workers' dream for getting pension go into oblivion? 

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