workers VS Manufacturers
The apparel sector that largely depends on workers ranging from skilled, semi- skilled to highly skilled often complain about irregularities in pay structures and do not get compensated as per skills or experience. The International Labour Union claims that the minimum wage in India’s garment sector was 74 percent for women, and 45 percent for men. Garment companies pay the majority of its workers – tailors, helpers, store managers, packers, trimmers and button fixers – only minimum wages.
The study also points out a trend of the industry going for more informal workforce hiring, rather than having workers on a regular contract. The trend gave rise to the hiring of casual and contract labourers who now account for the bulk of employees in the garment industry. The reason is quite simple: it is a means towards sidestepping statutory obligations and maintaining a constant state of insecurity for workers, which has its own unsavoury disciplinary value, claims the study.
The worst hit are women workers who complain of glitches in payment of wages, overtime, or medical insurance which is a norm in almost all garment factories of India. The adage in the garment sector is ‘minimum wage is the maximum wage’. At the most, the pay has kept up with inflation, but has hardly risen in real terms as per the workers.
Manufacturers on the other end have their own challenges. The overall market situation has been deteriorating ever since the US and EU markets were hit by recession. Within India new taxation policy, reduction in duty drawback rates and demonetisation affected the competitiveness of the sector, pushing exporters to downsize business and also reduce workforce.
Details like margins and purchase price are closely guarded by manufacturers, making the supply chain extremely opaque.
The Minimum Wages Act mandates a revision of wages by state governments every five years. But each time a state governments revises the minimum wage, manufacturers challenge it by asserting that it would make the sector uncompetitive. In Karnataka, in 2009, apparel producers challenged a hike in the minimum wage, from Rs. 2644.20 to Rs. 3,302, which the Labour Department then undid, citing “a clerical mistake”. It was only when the Garment and Textile Workers Union approached the Karnataka High Court that the revocation was struck down.
Today, Bengaluru’s apparel manufacturers are appealing against a hike in the monthly minimum wage to about Rs 10,000 a month, which will be applicable from April 1.
Seasonal contracting, rotation of workforce, shifting units to rural areas, forcing unpaid leave on workers during lean periods and imposing overtime when there are orders are some of the grey areas and issues which still need to be addressed.
In the global assembly line, as power has shifted from producers to traders and retailers, brands now set the terms. Multinational brands largely offer ‘narrow margins’ to manufacturers, who then fight to keep service conditions low.
India was the regional leader for 2018 pay rises with a 10 percent increase, while Sri Lanka was at 8.6 percent and Indonesia at 8.5 percent. The minimum wage for textile workers in Cambodia increased to $140 from 1 January 2016
Data from the China Chamber of Commerce for Importer and Exporter of Textiles and Apparel (CCCT) also shows that the increasing minimum wage for textile workers in China is currently almost twice as high as the minimum wage in Philippine or Indonesia, triggering concerns that China may lose its position as the textile and apparel industry leader in the world.
“FLEXIBLE labour norms have also been condemned by the labour unions. One of the changes makes Provident Fund optional for employees earning less than Rs. 15,000 a month, which comprises the majority of workers in this garment hub. For those eligible for Provident Fund, the government will pay the 12 percent employer’s contribution for the next three years. The package also introduced what is referred to as “fixed term employment”, or a time-bound contract. Worker unions fear that fixed term employment could lead companies to entirely do away with permanent contracts and long-term responsibility, leaving workers without a job and medical insurance. Fixed term employees would also not be eligible for benefits like bonus and gratuity that accrue from seniority and regularity.