There are no problems in subcontracting as a business model, but the way it is being implemented today has become a real cause of concern. PHOTO: ADOBE STOCK

The unheard plight of subcontractors in Pakistan

Subcontractors are not only under the pressure of being the first to be fired, they are also not eligible to benefits

Abdullah Ansari November 22, 2018
You might have noticed how the security guard at your company’s gate isn’t directly employed by your organisation; there is a third-party agreement that ensures there is no liability of that security guard on your company. Try to find out how much he earns a month and compare it to how much your company is actually paying for him; I guarantee you will find a stark difference in both amounts.

Till a few years ago, this situation was limited to support staff, including pantry boys, the sanitation department, security guards, and so on. However, things have changed over the past several years, and now subcontracting can be witnessed in the core business areas of companies, encompassing a canvas bigger than ever; right from the peon serving tea to high-level engineers.

There are no inherent problems in subcontracting as a business model, but the way it is being implemented today has become a real cause of concern. To start off, subcontractors are generally treated as ‘temporary’ workers. Even though ‘permanent’ jobs do not exist in the private sector in any case, at least permanent employees receive benefits attached to their job title when they are let go. But subcontractors are not only dealing with the pressure of being the first to be fired in case of a failing business, they are also not eligible to benefits like healthcare, transport, overtime, and so on.

Additionally, when they go to their managers or bosses at the organisation they work for, they make subcontractors feel replaceable and deflect responsibility by asking them to contact their contractors directly. In turn, the contractor also disposes any and all responsibility by telling them something along the lines of,
“We are just a hiring company. Please do as your workplace employer demands.”

This vicious circle goes on and on because it benefits both the employer and the contractor, sadly at the expense of the employee.

For subcontractors, feeling loyalty and a sense of belonging to the company then becomes a conundrum. Whenever a project is on-going and their expertise is critically needed, they are assured of their importance as part of the team; the same as a permanent employee is. As a result, they give their heart and soul to the job, more often than not working harder than permanent employees. Only once the project is completed and their treatment changes do they realise how they are exploited while permanent employees reap the rewards and benefits.

On top of these problems, subcontractors are exploited because they are vulnerable. In order to maintain their state of vulnerability, there is a trend of extending their contract on a yearly basis rather than simply converting a subcontractor to a permanent employee. I understand that to test someone, the company can keep an employee on contract for a period of three to six months. However, this should be a clearly defined period in which subcontractors must be evaluated. If you are not satisfied with the subcontractor, then you can end the contract and begin the process all over again. But if their work is good, then they deserve to be hired like a regular employee.

What is the point of renewing the contract year after year? Just to make sure the subcontractor feels insecure about their job and does not ask for a promotion or perks? Just to ensure the company has a greater margin to exploit the subcontractor? Just to ensure the total headcount doesn’t increase and the people at the top of the hierarchy don’t have to share the financial fruits of the company’s success with the people at the bottom?

Put the parenthesis of corrupt practices to the subcontracting procedure and the situation becomes bleaker. After all, how can one discount this menace when talking about businesses in Pakistan. It has become a common practice for higher-ups from the company hiring subcontractors through a contractor to form their own subcontracting company. This is obviously done via a different frontman, but they are the real beneficiaries at the end. In actuality, these higher-ups are charging a per hour margin for every subcontractor from the very company they are working for. For those who are not working in the industry, this may seem outlandish, but for those like me who have worked in big projects where a large labour force is required, this model is practiced with shameful consistency.

Companies operate within a societal framework, and each and every one of their workers, especially in countries like Pakistan, is a breadwinner for at least three to four people. One job is thus a lifeline to the entire family, and the never-ending downward spiral of our economy only ever gives employers the upper hand. For employees, especially subcontractors, there is no other option but to hang on and bear the exploitation.

This is where a concerned regulatory body has to step in. The right balance has to be struck between the employer, the contractor and the subcontractors. In the current situation, the contractor is the biggest beneficiary in this triangle, for it is not a hard task to find a suitable or qualified candidate from a super-saturated pool of job seekers. The contractor doesn’t have any obligation whatsoever towards the worker, and all their consideration is directed towards their paymasters i.e. the employer. They thus provide the legalised working setup in which an employer can have an expendable, cheap resource. Any problems faced by the subcontractors are a non-issue for both the employer and the contractor, as they both conveniently direct the problem to each other with no resolution for the worker.

This is a very real, very big cause of concern for people in the labour force, and if you still do not get the idea of why I have no choice but to put up with this issue, take a moment today to have a chat with any subcontractor in your company. I can guarantee you will feel their plight.
Abdullah Ansari An electrical engineer by profession, Abdullah works in the oil and gas industry. His interests include international relations, global politics and debating. He tweets @ChangingTrendz (
The views expressed by the writer and the reader comments do not necassarily reflect the views and policies of the Express Tribune.

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