The Garment and Textile Workers Union (GATWU) is planning to announce a strike if monthly wages are not hiked as per the Karnataka government’s February 22, 2018, draft notification. As per the order, the wage of unskilled workers should have been hiked to Rs 445 (basic pay) plus dearness allowance (DA), totalling around Rs 13,800. However, workers earn a basic pay of Rs 341.97 plus Rs 59.63 DA, which adds up to Rs 10,441/month. 

In 2017-2018, the then-Congress government in Karnataka revised the minimum wages in more than 30 scheduled industries only to withdraw it due to industry’s opposition. Subsequently, trade unions challenged the withdrawal of the minimum wage hike in the High Court, which ruled in their favour. The affected industries appealed the verdict in the Supreme Court but their petition was dismissed. They have now filed a review petition. Consequently, garment industry workers have missed out on wages of, at least, Rs 3,000/month since 2018.

The root of the crisis

The dispute started with two notifications issued by the state government. The first notification, issued on December 30, 2017, revised the minimum wages in more than 30 scheduled industries across Karnataka except the garment industry. The 2018 notification revised the minimum wage in the garment industry as well. However, both notifications were withdrawn on March 22, 2018, following lobbying by industry. They argued that labour costs made up 25%-30% of the total expenses, and the revised minimum wages would adversely affect their ability to do business and remain competitive. Subsequently, the Karnataka government rolled back the hike with the intention of revising the wages in the future.

The rollback of the notifications was challenged by AITUC and CITU in the HC. In his judgement, Justice Krishna S Dixit stood by the unions. 

The arguments put forth by industry were taken apart in the ruling:

1. Industry maintained that their interests were not fairly represented in the minimum wage advisory board. However, the court found that the advisory board consisted of members from the Karnataka Small Scale Industries Association (Kassia) and the Federation of Karnataka Chambers of Commerce and Industry (FKCCI). Therefore, industry was well represented.

2. It was claimed that a revision of 200%-350% of the 2009 minimum wages will strike a death knell for many industries. The court observed that in U. Unichoyi And Others vs The State Of Kerala, the apex court had ruled that the Minimum Wages Act, 1948, purports to prevent the exploitation of labour and hardships caused to employers by wages fixed by this Act are irrelevant. “In an underdeveloped country which faces the problem of unemployment on a very large scale, labour may offer to work on starvation wages. The policy of the Act is to prevent the employment of such sweated labour,” the top court had observed. 

3. Industry argued that the calculation of expenses and consumption had been done on the basis of one earning member while even women are working these days. The court observed that industry did not support its claim by providing statistical data regarding the male-female employment ratio. Further, Parliament had already enacted laws mandating individuals to care for aging parents. Further, customary personal laws also provide for the maintenance of the wife, children and parents who are incapable of maintaining themselves.

4. It was claimed that the minimum wages in Karnataka were now much higher than neighbouring states. The court ruled that India is a federal country and that each state has to fix the minimum wage based on the prevailing socioeconomic conditions of the working classes in that state.

Reptakos judgement

The HC added that the apex court’s observation in

Workmen Represented By Secretary vs Management Of Reptakos Brett was relevant even today. The top court had observed: “There has been a sky-rocketing rise in the prices and the inflation chart is going up so fast that the only way to do justice to the labour is to determine the money value of various components of the minimum wage in the context of today.”

Jayaram (61), one of the leaders of GATWU Karnataka, has been employed in the industry for more than 40 years. “At least, 80% of workers in this industry are women. That is why they think that they can exploit them and get away with it. As per the formula mentioned in the Reptakos Brett judgement, the minimum wage should be fixed at Rs 28,200/month. Recently, the minimum wage in the ceramic tiles industry was revised to Rs 18,176/month. The same must be done in the garments sector as well,” he told Newsclick.  

As per the Act, the government must revise the minimum wages every five years to keep up with inflation.

Courtesy: Newsclick

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Following several weeks of protest, over 1,200 Indian garment workers formerly fired by Karnataka’s H&M supplier during the coronavirus lockdown, will return to work, said Telegraph on February 14, 2021. The rehiring decision is considered a historic win for labour unions.

Garment manufacturer Gokaldas Exports Limited agreed to re-employ 1,257 workers, including many women, who were laid off when the company closed a factory near Mysore in June 2020, said two Indian unions and global federation IndustriALL. At the time, the company said that H&M order cancellations led to the factory’s closure. However, the giant brand denied this and stated that it paid for all products as agreed.

Union said the lay-offs were illegal under Indian labour law because Gokaldas’s management had not engaged with the state government before closing the factory, as per a December 2020 report by the legal research group Alternative Law Forum. They criticised the Indian manufacturer for “union-busting”.

In February 2021, the company signed an agreement with the organisations that allowed the Garment and Textile Workers’ Union (GATWU) to negotiate in any factory where at least 20 percent of workers were members. The document has not been made public yet.

Gokaldas, which calls itself India’s largest clothing manufacturer and exporter said on its website that it hires more than 25,000 people at 20 factories. It’s biggest buyer Swedish retailer H&M said the agreement was “positive” but declined further comment because it was not a signatory to the pact.

GATWU legal advisor Jayaram K. Ramaiah told Reuters that the agreement can set an example for other manufacturers. He praised the workers for protesting for several weeks.

“We want to take this beyond the present victory… to create a model factory and a harassment-free environment for all workers. This is just the beginning,” he said.

As per the agreement, laid-off workers will return to work in other Gokaldas factories by August. India’s multi-million-dollar garment industry employs at least 12 million people. However, it has faced scrutiny over the years for labour rights abuses and advocates fear the coronavirus pandemic can put further pressure on suppliers, leading to greater worker exploitation.

According to IndustriALL, the Gokaldas factory in question was the only one among more than 20 facilities which was unionised. In several garment-producing countries such as India, Cambodia and Myanmar, activists say factories used the economic fallout from the pandemic as an excuse to fire union members while keeping non-unionised workers.

In response to questions about the Gokaldas factory, a spokesperson for H&M said the retailer would continue to strengthen freedom of association in its supply chain.

According to the Centre of Monitoring Indian Economy (CMIE,) job recovery in the manufacturing sector continues to be modest even by January 19, 2021. The sector accounted for 40 million jobs in 2019-20. In the first quarter this dropped to 24.6 million jobs to 27.1 million jobs in the second quarter and then to 28.8 million jobs in the December quarter. The shortfall stands around 11.4 million jobs. The CMIE stated that every major manufacturing industry, except pharmaceuticals, employed less people in all three quarters of 2020-21 compared to the employment in 2019-20.

Meanwhile, of the hundreds of workers who protested for about 50 days after the mass firing, 50-year-old GATWU member Padma said that after a decade’s employment at the factory, the protests were “the most difficult I have ever been part of.”

Padma hopes that the recognition of their union will speed resolution to future issues through talks but stated that this issue should not have required such a long protest.

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Gokaldas exports, one of Karnataka’s largest apparels exporter has reportedly closed its unit in the state on June 6 resultantly laying off 1,300 employees. It employs around 25,000 people, most of which are women. The manufacturing plant is located in Srirangapatna town in Mandya, 45km from Mysore, and is called Euro Clothing Company II. Gokaldas Exports has more than 20 garment-making units in Karnataka and reportedly, this is the only unit being shut.

According to its website, its clients include international brands like GAP, Banana Republic, Abercrombie & Fitch, H&M, Reebok, Adidas, Zara, Columbia Sportswear Company, Marks and Spencer and Puma.

The Telegraph reported that the local tehsildar and trade union leaders alleged that the shutdown took place without the mandatory one-month notice to the state labour department.

The workers have been protesting this move and their demonstrations continue as the company management has refused to budge from its decision.

The Tehsildar MV Roopa told The Telegraph, “The company did not inform us about the layoff plan. We had approached the company when they moved the machinery last week. They claimed they had removed the machines because some orders were cancelled…The management has now said it could not send notices to the labour department because of the lockdown. We have called the management and workers to the factory on Monday. Our job is to ensure the workers don’t suffer.”

There are speculations by trade unions that the lay off was triggered by the H&M reducing its orders since the unit was only manufacturing for that company.

Under the Industrial Disputes Act, 1947 (IDA) the term ‘lay-off’ has been defined as the failure, refusal or inability of an employer on account of shortage of coal, power or raw materials or the accumulation of stocks or the breakdown of machinery or natural calamity or for any other connected reason to give employment to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched.

Section 25M of the Act states that a workman cannot be laid off without prior permission of the appropriate authority unless it is due to shortage of power or natural calamity. The section further provides that the copy of the application made to the government authority be provided to the workmen to be laid off and the decision is made by the authority after giving reasonable opportunity of being heard to the employer as well as the affected workmen. The section further states that the if no such application is made then the lay off is illegal and the workmen should be compensated accordingly.

If proper legal procedure is followed as mentioned above, the workman is also entitled to compensation under section 25C of the Act, for 45 days at least.

In general, the garment workers in Karnataka, comprising mostly of women, have been suffering since the lockdown. As per a report prepared by Garments Mahila Karmikara Munnade (GMKM) and the Alternative Law Forum (ALF) 63 per cent of workers in garment factories did not receive the April salaries. Of the rest, many were paid 30-50 per cent of their wages, which means they received between Rs.3,500 and Rs.5,000.

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Casual workers, mostly tailors, arrive at the Noida Phase II bus stand as they begin their daily job hunt. About 80% of the 7 million workers in the textile and apparel industry are temporary, and are paid almost entirely in cash–currently in severe short supply.

 
Almost every factory gate has a board proclaiming “Avashyakta hai (wanted)”. It lists the daily requirement of jobbers–tailors, finishers, ‘pressmen’ (as those employed for ironing are called), packers and so on–needed by the 200 small, export-driven garment units in the complex. The boards have been blank since the factories were hit by the aftermath of ‘demonetisation’–as the invalidation of the Rs 500 and Rs 1,000 currency notes is being referred to.

 

The ‘avashyakta hai’ (wanted) board at factory gates lists the daily requirement of jobbers at the textile and apparel units. These boards have been blank since the factories were hit by the aftermath of ‘demonetisation’.
 
These men and women are among the 92% of India’s workforce employed in the informal sector, which generates about half the country’s gross domestic product, according to the National Commission for Enterprises in the Unorganized Sector. Casual workers enjoy no job security or benefits of labour regulations, and about 79% of them live below the official poverty line.
 
With 7 million workers, the textile and apparel industry is the second-biggest employer in India–after agriculture–and about 80% of these workers are temporary. They are paid almost entirely in cash, currently in severe short supply, despite Reserve Bank of India governor Urjit Patel saying on December 7, 2016, that there was no shortage of currency nationwide.
 
 
Losing even a day’s work, at the minimum wage of Rs 350, is not an option for workers like Chanchala Devi, 35, a native of rural Nalanda in southern Bihar. Devi is a tailor, and has been trudging up and down 2 km for an hour and she has been turned away at every gate. The first shift has begun and gates have shut at 9.30 am. But she is reluctant to return home.
 
“I heard they are looking for workers in D block. I have four children at home and my husband who works as a checker hasn’t been paid in a month. I have to keep looking,” she said.
 
When the peak season turned slack
 
For the textile and apparel industry, November to January is peak season, a time when factories normally send out vehicles to pick seasoned workers like Devi off the street. In these three months, garment factories produce merchandise for the spring-summer lines of fashion houses in the West.
 
This year is different. Demonetisation has created a cash crunch that has sent the small-scale units, which form 78% of the readymade garments sector, into disarray. Nearly 80% of the workforce in this sector is employed as casual, off-rolls labour, and they are paid entirely in cash.
 
Workers like Devi are paid every fortnight–either as dehadi (daily wage), which is Rs 350 in Noida, or on piece-rate basis. Two cycles of fortnightly payment have gone past since November 8, 2016, and the units and workers managed to tide over the cash crunch–mostly by using old currency notes. But now, there is anxiety about where the factories are going to find the cash to pay these workers.
 
“I haven’t had a job since November 10, and I am missing my wage every day that I stand in a bank queue to exchange/deposit cash instead of looking for work,” said Nandan (he uses only one name), a 25-year-old tailor from Umrala in Bulandshahr, western Uttar Pradesh.
 
No jobs as units downsize
 
Nandan worked in one of the most stable units in the complex. Just last week, the factory shut down two assembly lines–each ‘line’ usually employs between 25 and 45 workers.
 
Owners of the small-scale units say they have no choice but to downsize because the seasonal and unpredictable nature of the business and its economies do not allow for permanent staffing and formalised modes of payment to labour.
 
A small to mid-scale entrepreneur, who did not wish to be named, said in an average November-December, he would have at least 1,500 workers at his factory; of them 75% temporary. He has, post demonetisation, cut the numbers down to 500.
 

For the textile and apparel industry, November to January is peak season, a time when factories normally send out vehicles to pick seasoned workers off the street. This year is different. Workers wait at factory gates hoping for openings as shopfloors assess their daily requirement of labour. Most were turned away soon after.
 
“We are in wait-and-watch mode, but if the liquidity crunch remains, we will downsize even more. And others (in the field) are saying that too,” he said. On the shopfloor, there are lines where sewing machines sit unmanned, huge piles of cloth waiting to be stitched.
 
“Productivity has taken a huge hit and if a single link in the assembly line drops, the whole process collapses,” he added.
 
Word of the layoffs spread quickly around the complex. Knots of anxious workers stood exchanging tips about possible openings. “Factriyan band ho rahin hain. Suna hai kala dhan pakad rahein hain. Par amir log nahin honge to haemin naukri dene wala kaun hoga? (Factories are closing. We hear that the rich are being caught with black money. But if they are put away, who will give us jobs?),” asked Javid (he uses only one name), a tailor from Motihari in north Bihar.
 
He has managed to hang on to his job, but has lost daily wages for four days, queuing up at banks to exchange old notes.
 
The hunt for seasonal jobs
 
Like Nandan and Javid, most workers in this complex are migrants, unskilled or partially skilled. Almost all of them come from the impoverished districts of Uttar Pradesh and Bihar, mostly men who leave their families behind. They live in the rural islands that still dot an area being swallowed by high-rise housing estates.
 
Nayagaon, Bhangel, Haldawani, Nangla Charandas, Yakubpur–these are the urban villages flanking the complex where they cram in small rooms, three or four workers to a room. Since the work is seasonal, they have no reason to drop anchor in the city.
 
Labour activists have, for a long time, been criticising the high levels of informalisation or casualisation of the workforce in the garments industry.
 
But small-scale employers insisted that in a seasonal industry with fluctuating demand conditions, this works ideally. “These migrant workers look for seasonal employment and return to their villages in dull months. They are not interested in permanent employment and they prefer nakad (cash),” a factory owner said. “They don’t want salaries in banks, or the headache of ESI (employees’ state insurance) or PF (provident fund) cuts.”
 
He added that if employers add the cost of permanent staffing to their costs, they will have to raise their prices and thus lose the competitive edge in the world market. Jobbers say they prefer the flexibility the arrangement offers, the freedom to look for the best-paying employer in the market and the scope for overtime at any given point of time.
 
The next month will be critical for the industry and if the cash scarcity continues, workers like Devi and Javid may have no option but to return home.
 
(Nair is a consulting editor with IndiaSpend.)

Courtesy: India Spend

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