work­ers VS Man­u­fac­tur­ers

Perfect Sourcing - - Cover Story -

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.

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