The Management of the garment and textile industries in the state are using the wrong estimates, in turn violating the Minimum Wages Act
The representatives of the Garment and Textile Workers’ Union (GATWU-Karnataka) met the representatives of the management in the sector on June 18, 2018, in a meeting coordinated by the Chief Minister of Karnataka, HD Kumaraswamy.
The Siddaramaiah-led Congress government in the state had issued a draft notification on February 22, 2018, and it promised an increase in wages from Rs 8,500 per month to Rs 12,250 per month. This draft notification was welcomed by the workers; however, succumbing to the pressure of the management, the government had retracted the draft notification, stagnating the minimum wage at Rs 8,500 per month. This as Pratibha from GAWTU noted, has enraged the workers. The workers have been protesting against this anti-worker move by the previous government.
The meeting on June 18, 2018, was the result of these developments and at the meeting, the CM directed the officials to set up a committee involving labour department officials, textile manufacturers, central trade unions, and garment workers. The committee is said to study the “long-pending issues” of the garment workers including the minimum wage. One has to wait to witness the government and garment and textile industry management lobby in determining the minimum wage. The determination of the Minimum Wage is regulated by the Minimum Wages Act. The state labour Department, industry representatives and the representatives of the trade union work together to fix the minimum wage. However, it is very common for the management to take an upper hand in the process, or after the wage is notified, to create a pressure on the government to curb the increase in the wage.
The International Labour Organisation and National Law School, Bengaluru, based on the surveys conducted by GATWU and Centre for Workers Management (CWM) has compiled a draft report titled Critiquing the Statutory Minimum Wage: A case of the export garment sector in India. The extensive report that concentrates on the garment sectors in Karnataka and NCR, shows that, in the sectors like garment industry, where the minimum wage determines the wage rather than the bargain wage, “the violation of the regulatory process is endemic.”
According to this report, a large proportion of the manufacturing in the industry is for the export market. The garment export is mainly concentrated in urban regions around Bengaluru in Karnataka, Chennai and Tirupur in Tamil Nadu; and in the National Capital region (Gurugram and Faridabad in Haryana and Noida in Uttar Pradesh) around Delhi. There is a significant wage difference among garment workers in different states. For example, in the NCR region, there are two Minimum Wages covering Noida and, Faridabad (UP) and Gurugram (Haryana). As the report says, this difference is maintained by the garment industry and the representatives effectively to use low wage states as the reason to oppose Minimum Wage increase in states with higher wages.
This is exactly what the garment industries in Karnataka are doing. In the proceedings of the above-mentioned meeting, the management has reportedly argued that minimum wages in Karnataka were higher than that in other States and doubling it would have an adverse impact on an industry that is already facing tough international competition. Jayaram and Pratibha of GAWTU noted that the management in the state has been threatening of shifting the industry to Telangana. “They haven’t done it but keep bringing it up as and when the demand for the rise in the wages are brought in front of them,” remarked both.
THE DEMANDS OF THE WORKERS AND THE RESPONSE BY THE MANAGEMENT
GATWU and the workers had demanded the CM to address the retraction of the final notification of the revised minimum wages issued to the workers of textile industry, spinning industry and printing and dyeing industry. As noted earlier, the management has had the upper hand in determining the minimum wage.
The representatives of the GATWU had mentioned the role of Shahi exports, Raymonds and Arvind Ltd in the retraction of the draft notification issued by the former government. Pratibha also said that there are about 150 employers in the state currently and all of them have turned to the powerful Shahi Exports to file an official statement against the draft notification that had increased the minimum wages. Which the company did and was successful.
Shahi Exports is the largest readymade garment manufacturing company in India. The company had an annual turnover of Rs 5,200 crores. The company has an annual manufacturing capacity of 160 million pieces of garments. It has 51 manufacturing facilities, distributed around the NCR, Karnataka (Bengaluru and suburbs, Mysore, Shivamogga), Tirupur and Hyderabad and employs 70,000 workers. The ILO-NLS report has considered this data of the company and of Orient Craft in NCR with 32,000 workers, that had an annual turnover of Rs. 1600 crores in 2015. Based on this data the report arrived at the per worker production value:
“The per worker production value for Shahi Exports is Rs. 7.4 Lakhs per annum, while the estimate for orient Craft is around Rs 5 Lakhs per annum. According to data from Apparel Export Promotion Committee, the readymade garments exports from India in 2016-17 was $17, 479 million. If we estimate the average per capita production per worker in the apparel export sector as Rs. 6 lakhs, the total workforce in the sector is around 20 lakhs…Further, with wages in the sector around Rs. 1 lakh per annum, with the worker production at Rs 6 lakh the wage share per worker is around 16%.
This estimated wage share per worker is very close to the estimates of the union according to the report. It also observes that this estimation contrasts with higher estimates often put out by employers for both employment, and wage share in production. The Management of the garment and textile industries in the state are using their wrong estimates and arguing that they are incurring losses and are also violating the Minimum Wage Act.
The workers of one of the of the largest informal sectors in the state of Karnataka await the revision and fixation of their minimum wages.