INDIA. country study 2012

Transcription

1 INDIA country study 2012

2 TABLE OF CONTENTS List of Abbreviations 3 1. How to read this FWF country study 4 2. General country information Economic indicators Social, political & governance indicators Average income and poverty General human rights situation 7 3. Stakeholders 7 4. Garment Industry Overview Industrial relations Implementation of the FWF Code of Labour Practices Employment is freely chosen No discrimination No child labour Freedom of association and the right to collective bargaining Payment of a living wage No excessive working hours Occupational health & safety Legally binding employment relationship 23 Appendix Indicators 24 Appendix Legal situation regarding the FWF Code of Labour Practices 29 fair wear foundation. India country study

3 List of Abbreviations AEPC Apparel Export Promotion Council AFSPA AIBEA AITUC AIMO ASI CEC CIE CIVIDEP- India CMAI CMSS CSR DGFASLI DISHA ESI FEDINA FWF GDP GAFWU GATWU HMKP ILO MFA MEM NASSO NCPEDP NGO NTUI PPP RMG SAVE SLD TEA VRS Armed Forces Special Powers Act All India Bank Employees Association All India Trade Union Congress All India Manufacturers Organisation Annual Survey of Industries Centre for Education and Communication Council of Indian Employers Civil Initiative for Development and Peace- India Clothing Manufacturers Association of India Chhattisgarh Mines Shramik Sangh Corporate Social responsibility The Directorate General, Factory Advice Service and Labour Institutes Driving Industry towards Sustainable Human Capital Advancement Employees State Insurance Foundation for Educational Innovation in Asia Fair Wear Foundation Gross Domestic Product Garment and Fashion Workers Union Garment and Textile Workers Union Hind Mazdoor Kisan Panchayat International Labour Organization Multi Fibre Arrangement Mazdoor Ekta Manch National Sample Survey Organization National Centre for Promotion of Employment for Disabled People Non Government Organisation New Trade Union Initiative Purchasing Power Parity Readymade Garments Social Awareness and Voluntary Action Society for Labour and Development Tirupur Exporters Association Voluntary Retirement Scheme fair wear foundation. India country study

4 1. HOW TO READ THIS FWF COUNTRY STUDY This country study should provide a clear and concise picture of labour law, labour conditions and industrial relations within the textile/garment industry. By dividing the information in several parts, the reader can choose what level of detail they wish to read. For finding specific laws or compliance with certain parts of the FWF Code of Labour Practices, the country study can be used as a reference sources. For a general overview of the situation in India, the summary above is the starting point, followed by chapter 2 (General country information). More information on the country s garment industry can be found in chapter 4 (Garment industry), while chapter 5 (Industrial relations) will give an overview of the way the local systems work. The rest of the country study can be used as a reference to find specific information. Below you can find a short description of the content of each chapter. The summary gives a general picture of the level of development, the outlook for the industry in the country and the major challenges when it comes to implementing the FWF Code of Labour Practices. Chapter 2, General country information, describes the economic, social, political and governance as well as the general human rights situation using international indicators and comparing with other garment producing countries. Appendix 1 lists and explains these indicators more closely. Chapter 3, Stakeholders, briefly presents the main stakeholders active in the garment/textile industry. The focus is on stakeholders who have actual impact on labour conditions or play an active role in monitoring the situation for workers in the industry. This chapter serves as a reference point for those who want to engage with or consult a local stakeholder to find further information or help regarding their activities in the country. Chapter 4, Garment industry, gives an overview of the situation for the garment industry in the country, areas of production, products and outlook for the industry. Chapter 5, Industrial relations, gives a description of the trade union situation in the country, both in general and for the garment industry specifically. This chapter gives important information essential for understanding the how well challenges regarding working conditions could be and actually are handled through social dialogue in the country. In Chapter 6, Implementation of the FWF Code of Labour Practices, the implementation of every part of the FWF Code of Labour Practices is assessed through official statistics on compliance (where available), laws and regulations, as well as different stakeholders views on implementation. Text in italics is quotes from relevant laws. For more detail on the Implementation of the FWF Code of Labour Practices, see Appendix 2 for details on local laws relevant for the FWF Code of Labour Practices and Appendix 3 for a more detailed description of what the different stakeholders have said about code compliance. These two appendices go into quite specific detail regarding the different aspects of code compliance and can be useful when facing specific issues in a factory or as a support when auditing. fair wear foundation. India country study

5 SOURCES USED IN THE COUNTRY STUDY This country study provides a clear and concise picture of the industry, labour law, labour conditions and industrial relations within the textile/garment industry in India. The study is prepared through gathering information about national laws and local stakeholders view on labour issues in the garment industry in India. Apart from this information, FWF has also gathered information from international recognized sources on the economic, social, political and human rights situation in the country. The information has been gathered by Civil Initiatives for Development and Peace India (CIV- IDEP-India, in the following referred to as CIVIDEP). Apart from the stakeholder information, highlights of relevant laws regarding each part of FWF s code of labour practices is presented for reference. The following stakeholders representing public authorities, employers, trade unions and NGOs were consulted by CIVIDEP in writing this country study: I. Government / Public Authorities Ministry of Labour, Bangalore II. Employers Association Apparel Export Promotion Council, Gurgaon & Bangalore Clothing Manufacturers Association of India III. Trade unions All India Trade Union Congress (AITUC), Karnataka Hind Mazdoor Kisan Panchayat (HMKP), Karnataka IV. Labour related NGOs Society for Labour and Development, New Delhi Social Awareness and Voluntary Action (SAVE), Tirupur, Tamil Nadu Workers Rights Consortium, India fair wear foundation. India country study

6 2. GENERAL COUNTRY INFORMATION India is the seventh-largest country in the world and is bounded by the Himalayas in the north, the Bay of Bengal on the east, the Indian Ocean on the south and the Arabian Sea on the west. India s population has grown rapidly, with a growth rate of 18% over the past decade leading to the current population of million in India s export market underwent significant changes after the liberalization process which began in the early 1990s. The major exports now include manufacturing goods such as engineering goods, petroleum products, chemicals and related products, gems and jewellery, textiles and readymade garments, and electronic goods, which constitute more than 80% of the export basket. India is now a major player in the global trading system and all the major sectors of Indian economy are linked to international trade networks. Agriculture provides the principle means of livelihood for around 60% of India s population. It contributes approximately one-fifth of total gross domestic product (GDP), accounts for about 10% of the total export earnings and provides raw material to a large number of industries. Low and volatile growth rates and the recent escalation of an agrarian crisis in several parts of the country have resulted in an economic slowdown. The economy was however on the path to recovery by Advance estimates of National Income for (at constant prices), released by the Central Statistical Organization, showed the growth in GDP in was 8.0%, with agriculture and allied sector, industry and services growing at 0.4%, 8.0% and 10.1%, respectively Economic indicators India ranks 134 out of 187 countries in the human development index (HDI), according to the UN HDI Report, In the South Asia garment-producing countries, China is ranked 101 and Bangladesh 146. India s GDP per capita is more than double that of Bangladesh and almost half that of China. India s GDP per capita is $3 468, as compared to $7 476 for China and $1 529 for Bangladesh. 2.2 Social, political & governance indicators India is ranked 39th in the world ranking on the Economist Democracy Index for 2011, with low scores for political participation and political culture. China is ranked at 141, and Bangladesh 83. On Transparency International s 2011 corruption perception index, India scored 3.1 on a scale from zero to 10, declining from 3.5 in The score indicates that corruption is widely perceived to be a problem in India. India ranked 95 th in the list and China 75 th. 1 Source: National Portal of India; Office of the Registrar General and Census of India; Ministry of Finance, Government of India Department of Economic Affairs, Annual Report fair wear foundation. India country study

7 2.3 Average income and poverty The UN Human Development Initiative report, 2011, notes that India has the world s largest number of multi-dimensionally poor while an additional 16.4% are vulnerable to multiple deprivations. 2 Poverty estimates compiled by the Planning Commission for indicate the total number of people below the poverty line is 29.8% down from 37.2% in The poverty line in India is defined as earnings of Rs. 32 (0.57 USD) per day in urban areas and Rs. 26 (0.46 USD) a day in rural areas General human rights situation The past several years have been dominated by continuing insurgency and armed conflict in several regions, including Jammu and Kashmir, Maoist conflict areas in central India, Manipur and other parts of Northeast India, and the 2008 Mumbai terror attacks. The effects of these conflicts remain a concern among many observers. India s rapid economic growth is largely limited to key urban and suburban areas while large parts of rural India continue to experience serious poverty, aggravated by an agricultural crisis and declining food availability. 3. STAKEHOLDERS In this section a number of stakeholders, active in the garment/textile industry are briefly presented. The focus is on stakeholders who directly affect labour conditions or monitor the situation for workers in the industry. GOVERNMENTAL INSTITUTIONS Both the central and state governments have jurisdiction over labour matters and can enact legislation. The most important aspects of labour relations, including industrial and labour disputes, trade unions, social security, and welfare, are matters in which the central and state governments have joint jurisdiction. Only the central government may legislate safety in mines and oil fields, and industrial disputes concerning central government employees. This federal scheme therefore allows for both central and state government institutions to impact labour matters in the garment industry. 2 The Multidimensional Poverty Index (MPI) was developed in 2010 by Oxford Poverty & Human Development Initiative and the United Nations Development Programme uses different factors to determine poverty beyond incomebased lists. It replaced the previous Human Poverty Index. The MPI is an index of acute multidimensional poverty. It shows the number of people who are multi-dimensionally poor (suffering deprivations in 33% of weighted indicators) and the number of deprivations with which poor households typically contend. It reflects deprivations in very rudimentary services and core human functioning for people across 104 countries. Although deeply constrained by data limitations, MPI reveals a different pattern of poverty than income poverty, as it illuminates a different set of deprivations. 3 Source: Planning Commission Report based on Suresh Tendulkar Report fair wear foundation. India country study

8 MINISTRY OF LABOUR The Ministry of Labour ( headquartered in Delhi, is the central governmental agency on labour issues. It consists of eight divisions: social security, emigration, industrial relations, child and women labour, labour welfare, economics and statistics, international labour affairs, and labour conferences. Each state government also has a labour department that implements the labour laws within its jurisdiction. LABOUR BUREAU The Labour Bureau ( created in 1946 as part of the Ministry of Labour, is responsible for collecting and publishing statistics and related information on wages, earnings, productivity, absenteeism, labour turnover, industrial relations, and working and living conditions. It also tracks important economic indicators such as the Consumer Price Index, data concerning industrial, agricultural and rural labourers; wage rate indices; and data on industrial relations and socio-economic conditions in the organized and unorganized sectors of industry. THE DIRECTORATE GENERAL, FACTORY ADVICE SERVICE AND LABOUR INSTITUTES (DGFASLI) The DGFASLI ( was set up in 1945 with the objective of advising central and state governments on administration of the Factories Act and coordinating the factory inspection services in the states. The DGFASLI is an attached office of the Ministry of Labour & Employment and serves as a technical arm to assist the ministry in formulating national policies on occupational safety and health in factories and docks. It also advises factories on problems concerning safety, health, efficiency and well-being of workers. MINISTRY OF TEXTILES The Ministry of Textiles ( is responsible for policy formulation, planning, development, export promotion and trade regulation in respect of the textile sector. This includes all natural and manufactured cellulosic fibres that go into the making of textiles, clothing, and handicrafts. EMPLOYERS ORGANISATIONS Several established employers organisations represent the interests of both private and government-owned enterprises and industries. The Council of Indian Employers is the umbrella organisation of three employers bodies: the All India Employers Organisation, Employers Federation of India, and Standing Conference of Public Enterprises, which takes part in the International Labour Organisation (ILO) activities. The umbrella body represents the employers interests with the government and international forums such as the ILO. The All India Manufacturers Organisation (AIMO) represents the interests of the small and medium enterprises and ensures representation in the India Labour Conference and the State Labour Conference. fair wear foundation. India country study

9 Major employers organisations include: Clothing Manufacturers Association of India (CMAI) The CMAI ( is the pioneer and most representative association of the Indian apparel industry for over four decades. It has a membership base of over 20,000 companies, including readymade garment manufacturers, exporters, retailers and ancillary industries. With its headquarters in Mumbai, CMAI also has branches in New Delhi, Bangalore, and Pune. The association acts as a catalyst of change in the industry by interacting with the government on matters of policies that impact the future of apparel industry. The association also guides its members on compliance with various government regulations. Apparel Export Promotion Council (AEPC) of India The AEPC is the main industry body for the promotion of the apparel export industry. More recently, it has developed a common compliance code for the sector called DISHA (Driving Industry Towards Sustainable Human Capital Advancement). AEPC s Common Compliance Code Project has been designed to build the capacities of Small & Medium Enterprises (SMEs) as well as to eliminate overlapping compliance processes and associated costs. DISHA will be coordinated and monitored in liaison with the Ministry of Textiles. DISHA is designed to bring in rigorous third-party audit programs involving international auditing agencies in the supply chain with a goal of helping factories improve their standings with international businesses. Council of Indian Employers (CIE) CIE s primary mission is to interact with the government in the formulation of long-term labour, economic, and social welfare policies concerning labour and employers. It has contributed to improving industrial relations in the country and aims to promote the prosperity and growth of industry. The main function of CIE is to present and make representations or proposals to the government and other related organizations on matters concerning the welfare of the partners of progress and development in general. TRADE UNIONS A number of large and small trade unions have been established. There are 13 major trade union federations in the country recognized by the government as central trade unions. A central trade union refers to a union which had a verified membership of at least across at least four states and four industries. The central trade unions represent the workers in committees, councils, government bodies, and international organisations. The unions active in the garment sector include: Garment and Textile Workers Union (GATWU) GATWU is based in Bangalore and focuses exclusively on garment workers. It collaborates with other trade unions, civil society organisations, and campaigns to improve the working conditions in this sector. GATWU bases its strength in union power as well as the wider social alliance of those disadvantaged by unregulated economic globalization. fair wear foundation. India country study

10 Garment and Fashion Workers Union (GAFWU) Garment and Fashion Workers Union is a registered trade union for workers employed in the garment factories union with a membership of over workers in Chennai. GAFWU has been involved in such issues as factory closures, arbitrary retrenchment, and sexual harassment. With assistance from NGO Malarchi, GAFWU has been able to organise three local-level committees. GAFWU is an independent, non-party trade union that is an affiliate of New Trade Union Initiative (NTUI). Mazdoor Ekta Manch (MEM) Mazdoor Ekta Manch is a platform of workers in Gurgaon. MEM s mission is to build the power of workers and their families, and secure their dignity and rights where they work and live. MEM believes that workers concerns span the workplace, the immediate communities they live in, the state they reside in, as well as the broader country and the world. Central Unions Central or general unions that are active in organising garment workers include Hind Mazdoor Sabha, All India Trade Union Congress, and the India National Trade Union Congress. LABOUR NGOS A number of non-governmental organisations (NGOs) work closely with garment workers on a variety of social issues. These may be creating awareness, education and trainings and supporting of workers rights. These organisations are largely concentrated in the southern part of the country, and foster an engagement between civil society and issues facing workers. Civil Initiatives for Development and Peace India (Cividep) CIVIDEP ( an NGO based in Bangalore, studies the effects of corporate activities on communities and the environment, helps workers unionise and campaigns with many other organisations and individuals for workers rights and corporate accountability. The current focus areas of work have been in the garment manufacturing and electronics manufacturing sectors. Malarchi Women s Resource Centre (Malarchi) Malarchi is a women s organization based in Chennai, working on the economic and legal rights of women. Malarchi networks with NGOs, trade unions, women s organisations, lawyers, and human rights activists to focus labour rights of women in the informal sector in Tamil Nadu. Social Awareness and Voluntary Education (SAVE) SAVE ( is a Tirupur-based NGO initially promoted as a response to increasing child labour practices. It has evolved to promote the empowerment of women and comprehensive development of the textile and garment industry workers. SAVE campaigns for the protection and promotion of the rights of workers in these sectors. Foundation for Educational Innovations in Asia (FEDINA) FEDINA ( headquartered in Bangalore, is a secular NGO established with the objective of empowering the marginalised, the oppressed, and the poorest of the poor to demand their rights. fair wear foundation. India country study

11 FEDINA works towards the empowerment of almost all marginalized groups of our society: tribals, dalits (traditionally regarded as untouchables, officially identified as Scheduled Castes and Scheduled Tribes), poor women, small farmers, landless labourers, informal sector workers, Muslims and slum-dwellers, with the aim of enabling them to organize themselves into groups capable of fighting for and demanding their rights. FEDINA currently organises workers in the following sectors: garment and textiles, beedis, agriculture, gem cutting, quarrying, brick making, construction, and other informal sectors. Society for Labour and Development (SLD) The Society for Labour and Development ( was founded in SLD believes that a democratic and just society can only be built through economic development and equitable sharing of the gains of development; through institutionalising the democratic rights of workers and marginalised peoples organisations in sites of production and governance; through international solidarity based on mutual respect and equality; and through a democratisation of global economic and political regimes. Centre for Education and Communication (CEC) Centre for Education and Communication ( is a labour resource centre. Its purpose is to enhance the dignity and power of labour. It conducts collaborative research and campaigning, and provides support for development of key concepts, ideas and policies that contribute to the enhancement of the dignity of labour. 4. GARMENT INDUSTRY OVERVIEW ORGANISATION OF THE GARMENT INDUSTRY IN INDIA The textiles sector is the second-largest provider of employment in India, after agriculture. The Indian textiles and clothing industry constitutes around 14% of industrial production, 4% of GDP, and 12% of country s export earnings. The industry changed significantly after the end of the Multi Fibre Arrangement (MFA) in Within one year Indian exports grew at a rate of 22%. In the post-quota period, India has emerged as a major sourcing destination for new buyers and a number of them have opened their sourcing and liaison offices in India. Indian manufacturers have been working to enhance their capacities to fulfil this increased demand. Additional catalysts for growth have been growth in organized retailing, growing consumerism in the domestic market, and a favourable policy regime. However, the impact of the economic downturn worldwide also had an adverse impact on the garment sector in India. The major export markets for India have been USA, EU, and Japan, and all three markets were in a recession during Global exports of RMG during were of the order of US$ 9.07 Billion, which increased to US$ Billion during but declined by 3% to US$ Billion in There has been considerable growth of readymade garment exports in new markets such as South Africa, Singapore, Australia, Malaysia, Kuwait, and Brazil in the last couple of years. fair wear foundation. India country study

12 The government has supported the textile export sector through fiscal and non-fiscal measures as well as through incentives designed to increase India s share in global textiles markets. 4 Main exports from garment industry India s exports of ready-made garments consist of cotton, silk, manmade fibres, wool and other textile materials. India s apparel exports consist of T-shirts, men s shirts, ladies blouses, skirts, shorts, trousers, nightshirts, and nightwear chiefly made from cotton fabrics. Casual wear accounts for around 65% of total exports from India, followed by formalwear, kids apparel, sportswear, intimate apparel, and sleepwear. 5 Main areas for garment production Garment production is concentrated primarily in eight clusters: Tirupur, Ludhiana, Bangalore, Delhi/Noida/Gurgaon, Mumbai, Kolkata, Jaipur, and Indore. Tirupur, Ludhiana, and Kolkata are major centres for knitwear, while Bangalore, Delhi/Noida/ Gurgaon, Mumbai, Jaipur, and Indore are major centres for woven clothing. Percentage employed in garment industry The garment industry in India provides direct employment to an estimated 35 million people, which includes a substantial number of workers from marginalised communities and women. Readymade garments (RMG) account for almost 45% of the total textiles exports. Social composition of the garment workforce A detailed Occupational Wage Survey (6th Round-2008) of the textiles garment industry was carried out by the government s Labour Bureau. The report found that the composition of the work force in the industry varies widely with the nature of its activity, geographical location, operations involved, level of technology available, social and economic conditions of the people and the government policies. Variations in these factors account for the change in the composition of the work force not only from one sector to another but also from region to region within the same sector. Approximately 60% of workers are women, 40% men. The survey noted that there were a large number of male workers in North India (the share of male workers was more than 80% of the total employment in Haryana, Delhi, Uttar Pradesh, and Maharashtra) while women workers dominated in Karnataka and Tamil Nadu. The highest percentage of women workers were found in Tamil Nadu (84%) followed by Karnataka (79%), while the lowest percentage of women workers was reported in Uttar Pradesh (4.5%).6 In some major production areas, a large percentage of the workforce are migrant workers from other areas in India. For example, it has been estimated that 30% to 40% of workers in Tirupur have migrated there from elsewhere in India. 7 4 Ministry of Textiles, Annual Report Source: Clothing Manufacturers Association Of India (CMAI, undated) 6 Source: Labour Bureau, Ministry of Labour, Uchikawa, S. The Development of Apparel Industrial Cluster in India: A Comparison between Ludhiania and Tiruppur. In The Linkage between Agriculture and Industry in India Institute of Developing Economies. fair wear foundation. India country study

13 5. INDUSTRIAL RELATIONS ORGANISATION OF EMPLOYERS AND TRADE UNIONS IN THE GARMENT SECTOR Unionisation levels among India s garment workforce are generally very low. Dialogue between employers and trade unions in the form of collective bargaining or social dialogue mechanisms tends to be very limited. Garment workers depend largely on the Corporate Social Responsibility (CSR) mechanisms to address a large number of work related grievances and implementation of laws through multi-stakeholder initiatives is the norm with export-oriented garment sector units. Union strength and influence are extremely limited in all the garment manufacturing centres. While a Tripartite Wage Agreement is in force in Tirupur, the levels of unionisation have been estimated by some stakeholders to be as low as 4%. The All India Trade Union Federations do not have a significant presence in garment sector. A study on unionisation in the garment sector carried out by CIVIDEP note the difficulties faced by trade unions in organising garment workers. One major issue is high worker turnover, which makes it difficult to establish a stable union membership. Women workers often leave jobs when they get married, or when their husbands change employment. In general, workers are more likely to change jobs rather than confront managers, which limits the relevance of unions to many workers. Additionally, factory managers are not generally supportive of unionisation.8 While basic trade union rights are guaranteed, many restrictions apply in particular in the various states. The Trade Unions Act was amended to ensure greater representation and a union must now represent 100 workers or 10% of the work force in order to register, and the law limits the number of outsiders to sit on a union executive committee. While the right to collective bargaining is guaranteed, there is no legal obligation on employers to recognise a union or engage in collective bargaining. 9 UNION DENSITY IN THE COUNTRY 2008 Labour Bureau research, there are 13 Central Trade Union Organizations, as well as other autonomous unions. 10 An estimated 92% of unions operate at the state level, with around 8.1 million members; 8% are central with 1.4 million members. The state of Tamil Nadu accounted for the highest membership, followed by West Bengal. Women comprise 22% of total union membership, but only 2% of central union membership, with membership highest in Tamil Nadu. These figures indicate that despite the growing presence of women in the labour force, they are underrepresented in unions. These figures also reflect the difficulties of organising women workers and registering them as active members of unions; and that many women work in the informal economy, which has remained largely unorganised. 8 Mohan Mani, Garments Sector and Unionization in India Some Critical Issues, CIVIDEP Report, ITUC Annual Survey of Trade Union Rights, Gender Equality and Social Dialogue in India, ILO, 2010 fair wear foundation. India country study

14 COLLECTIVE BARGAINING AGREEMENT COVERAGE IN THE COUNTRY Trade unions have not been successful in organising the vast majority of workers (93%) that operate in the informal economy where collective bargaining is rarely practiced. In the informal economy, the relationships generally only exist between employer and worker and any bargaining takes place at an individual level. Even in the organised sector, collective bargaining coverage is as low as 3%. Researchers have noted that these figures hide some interesting developments in industrial relations: One, there have been strong decentralizing tendencies in private sector where the enterprise level bargaining has become the dominant level of bargaining even in industries like cotton, silk, plantations in regions like Coimbatore, Mumbai, where industry-wide bargaining has been the historical practice. Two, the character of collective bargaining in the public sector has changed: the government prefers a long term settlement (ten years); it has sought to link pay with performance of both workers and the public enterprise; it has withdrawn budgetary support for expenditure arising out of collective agreements and so on (Shyam Sundar 2010 c). Three, the dominant managerial objectives in collective bargaining in recent years owing to heightened competition have been to reduce labour costs, increase production or productivity, flexibility in work organisation (multi-skilling /multi-functioning, changes in worker grades, etc.), increase in work time, reduction in regular staff strength via VRS (voluntary retirement scheme), stress on quality and so on (Krishna Murthy 2006, Venkata Ratnam 2003). Four, trade unions have shown cooperation where necessary (crisis situations caused by external factors and not by mismanagement) and when it is sought from them by the management. Several agreements now talk of introducing new work measurement systems, changes in work practices, giving production incentives, having flexi working, etc. 11 CBA COVERAGE IN GARMENT INDUSTRY Collective bargaining agreements are virtually non-existent in the Indian garment industry. The best-known example is the Tirupur tripartite wage agreement (negotiated with the Tirupur Exporters Association, TEA), was reported as a major victory for unions. A 2011 CIVIDEP report outlined the agreement, and highlighted some of the shortcomings: The TEA wage was negotiated for the 4-year period January 2007 to December 2010, with a 10% wage increase for the first year, and 4%, 3%, and 3% for the subsequent years. A new agreement on wages came into effect from January 30th 2012, where the wages were increased by 20% in the first year (workers daily wage is now at Rs ) and 4% increase in each of the subsequent three years Employment trends in employment relations in India, K. Shyam Sunder, Indian Journal of Industrial Relations 12 fair wear foundation. India country study

15 [However] the wage, which is not inflation linked, does not even cover inflation as determined by the consumer price index. Second, the TEA wage covers a small fraction of workers. The other workers are covered by the agricultural minimum wage of USD 1.6 (Rs.85) 13 per day, as there is no statutory minimum wage for the sector in Tamil Nadu. Statutory minimum wage exists in the state for tailoring industry, but as most of Tirupur garments are hosiery work, they are not covered under the category. Reason for this is that hosiery workers produce knitwear-products but not always final tailored goods. Even for tailoring, the minimum wage, which covers garment workers in Chennai, is low USD 2.1 (Rs per day as on 1st April 2010, minimum wage payable under the country s law). As a result, workers are pushed into working on contract and piece rate, forced to work overtime in order to get a reasonable wage. 14 LOCAL GRIEVANCE MECHANISMS FOR WORKERS The Industrial Disputes Act also provides for a workers committee in industrial establishments employing 100 or more workers. The committee must consist of equal numbers of employers representatives and workers to preserve good relations. This committee is meant to preventive differences between the employer and the workers. Any disputes are meant to be settled through conciliation, arbitration, or adjudication. STATE ROLE IN INDUSTRIAL RELATIONS India has formulated its own system of disputes resolution based on established practices and ILO conventions and recommendations. The Industrial Disputes Act (1947) provides for voluntary conciliation to assist in the prevention and settlement of disputes, except in the cases involving strike notices at a public utility, in which case conciliation is compulsory. Of late, Labour Lok Adalat has been recognized as a mechanism for quick resolution of dispute with no expenditure of the parties. This system dispenses justice on the basis of discussions, counselling, persuasions, and compromises. 6. IMPLEMENTATION OF THE FWF CODE OF LABOUR PRACTICES Of the eight Core Conventions of the ILO, India has ratified four: the Forced Labour Convention (No. 29); Abolition of Forced Labour Convention (No.105); the Equal Remuneration Convention (No.100) and the Discrimination (Employment Occupation) Convention (No.111). The following four conventions have not been ratified by India: Freedom of Association and Protection of Right to Organised Convention (No.87); Right to Organise and Collective Bargaining Convention (No.98); Minimum Age Convention (No.138); Worst Forms of Child Labour Convention (No.182). 13 1USD = Rs Mohan Mani, Garment Sector and Unionisation in India Some critical issues, Cividep Report, 2011 fair wear foundation. India country study

16 6.1 Employment is freely chosen There shall be no use of forced, including bonded or prison, labour. (ILO Conventions 29 and 105) OFFICIAL STATISTICS ON COMPLIANCE According to the Ministry of Labour and Employment, there are a large number (286,839) of identified bonded laborers, 15 although stakeholders widely agree that traditional bonded labour is rare in the apparel industry. LAWS AND REGULATIONS India ratified ILO Convention No. 29, The Forced Labour Convention, in 1954, and ratified ILO Convention No. 105, Abolition of Forced Labour Convention, in Forced labour is prohibited by the Constitution and by law. Bonded labour, as a form of compulsory labour, is prohibited by the Bonded Labour System (Abolition) Act of Enforcement of this statute is the responsibility of state governments. Enforcement levels vary from state to state, but is generally seen as low. India continues to be criticised by the ILO Committee of Experts on the Application of Conventions and Recommendations for its inaction to implement its legislation on bonded labour, and it has also been criticised by the United Nations Committee on the Rights of the Child (CRC) regarding the gaps in its legislation that hinder attempts to eliminate forced child labour. Recently, the High Court of Madras was petitioned to order an inquiry into the Sumangali scheme practised in the garment sector in Tamil Nadu, (see notes below). The court declined to admit the Public Interest Litigation and instead directed the trade union to approach the labour authorities under the different labour laws. 16 Several non-governmental organisations, trade unions and civil society groups continue to oppose the scheme and call for a ban on Sumangali-type schemes. STAKEHOLDERS OPINION AND ANALYSIS ON IMPLEMENTATION Although there is little evidence of bonded labour in its classical or traditional form, stakeholders opined that the prevalence of compulsory overtime is widespread throughout the garment industry and should be considered a disguised form of forced labour. Sumangali is also considered by some stakeholders as a disguised form of forced labour. 15 Ministry of Labour and Employment Annual Report, ) 16 Centre of Indian Trade Unions v. Secretary to Govt. of Tamil Nadu, Labour and Employment Department, Chennai, 2007 II LLJ 640 (Mad). fair wear foundation. India country study

17 Sumangali connotes a happily married and prosperous woman, and is the name given to a particular employment scheme. The manufacturers of garment and textile industry of Tamil Nadu (especially in areas around Tirupur and Coimbatore) organise job fairs in villages to attract potential workers for their industry. At the job fair, manufacturers and contractors recruit unmarried girls of 14 to 15 to work in the industry. The scheme promises free food and lodging for girls with a small monthly stipend for the entire contract period of 3 to 5 years. At the end of the contract period, they are promised a lump sum to cover their wedding expenses. Desperate families often agree to the arrangement and send their girls to work in these factories. The girls often live in unhygienic living conditions at hostels that are provided by the manufacturers. The excessive work pressure coupled with harassment in factories adds to the woes of these young girls. They end up working for 12 to 14 hours a day and are kept confined in their hostels on their weekly off days or in the evenings after work. Any unionising activity or interaction with trade unions outside their factories is effectively impossible. Despite various promises from the manufacturers and attempts by the brands and MSIs to stop such schemes, girls still work in garment factories under the same conditions with similar contracts. 6.2 No discrimination In recruitment, wage policy, admittance to training programs, employee promotion policy, policies of employment termination, retirement, and any other aspect of the employment relationship shall be based on the principle of equal opportunities, regardless of race, colour, sex, religion, political affiliation, union membership, nationality, social origin, deficiencies, or handicaps (ILO Conventions 100 and 111). LAWS AND REGULATIONS India ratified ILO Convention No. 100, Equal Remuneration Convention in 1958, and ratified ILO Convention No. 111, Discrimination (Employment and Occupation) Convention in Regardless of Constitutional safeguards and laws designed to prevent discrimination, indigenous people and members of low castes in India have often suffered discrimination and harassment. To remedy this situation, specified historically disadvantaged castes and tribes are entitled to affirmative action in employment and other benefits. The Equal Remuneration Act (1976) was enacted to prevent discrimination of workers on the basis of gender and to establish equal pay for men and women. STAKEHOLDERS OPINION AND ANALYSIS ON IMPLEMENTATION While it was acknowledged that there is no disparity in equal wages for equal work, stakeholders identified other forms of discrimination as being prevalent in the industry. Women fair wear foundation. India country study

18 supervisors are rare, women are routinely terminated from employment during pregnancy, and sexual harassment was found to be widespread. Stakeholders were of the opinion that workers joining unions or organising workers were often targeted and systematically removed from employment under false pretences. Union organizing is rarely given as the reason for termination. Incentives such as giving easy tasks to workers who are not with unions, or talking politely to them, are provided by employers to discourage workers from joining unions or organising among themselves. Further, it was observed that although the Supreme Court in the Vishaka Case requires every business where women are employed to form sexual harassment prevention committees with the participation of NGOs, the ruling is rarely implemented. 6.3 No child labour There shall be no use of child labour. The age for admission to employment shall not be less than the age of completion of compulsory schooling and, in any case, not less than 15 years. (ILO Convention 138) There shall be no forms of slavery or practices similar to slavery, such as the sale and trafficking of children, debt bondage and serfdom and forced or compulsory labour. [...] Children [under the age of 18] shall not perform work which, by its nature or the circumstances in which it is carried out, is likely to harm their health, safety or morals. (ILO Convention 182) OFFICIAL STATISTICS ON COMPLIANCE Data derived from 61st Round Survey of NSSO indicates that in India 5.8 million children aged 5 to 14 (about 2.6% of the total) were working in India in LAWS AND REGULATIONS India has neither ratified ILO Convention No. 138: The Minimum Age Convention nor ILO Convention No. 182: The Worst Forms of Child Labour Convention. The Child Labour (Prohibition and Regulation) Act 1986 prohibits employment of children in some occupations and processes considered hazardous, including carpet weaving; cloth printing; and dyeing and weaving. In 2006, the central government amended the act, prohibiting employment of children younger than 14 years from working in restaurants, motels, and as domestic servants. The act regulates employment of children in other areas, providing for six hours daily work and one day s rest per week. Forced and bonded labour by children is prohibited, but this law is not enforced uniformly. (see Section IV below). 17 Census 2011 statistics on child labour in India have not been published during the time of finalization of this country study. fair wear foundation. India country study

19 STAKEHOLDERS OPINION AND ANALYSIS ON IMPLEMENTATION Stakeholders acknowledged having little evidence of child labour in CMT factories but some alluded to NGOs having found child workers in other levels of apparel supply chains. Tirupur is estimated to have around 600,000 garment workers. Stakeholders estimate that up to 5% of the workers at smaller operations (less than 500 workers total) are child labourers. These smaller operations will tend to have a larger segment of child workers. Workers ages 15 to 18 can make up at least 20% of workers. Small units which do not have direct buyer linkage tend to employ more children (below 15 years) in their work. Garment industries in Bangalore and Delhi assert that child labour is not used. Stakeholders have expressed concern, however, that the widespread use of home-based work for operations such as sequinning or embroidery present a risk of child labour. The lack of an established study on the topic makes it difficult to estimate the level of risk. 6.4 Freedom of association and the right to collective bargaining The right of all workers to form and join trade unions and bargain collectively shall be recognised. (ILO Conventions 87 and 98) Workers representatives shall not be the subject of discrimination and shall have access to all workplaces necessary to carry out their representation functions. (ILO Convention 135 and Recommendation 143) OFFICIAL STATISTICS ON COMPLIANCE Only 7% of the work force is in the formal sector and is unionised, and even fewer workers are covered by a collective bargaining agreement. LAWS AND REGULATIONS India has ratified neither ILO Convention No. 87, the Freedom of Association and Protection of the Right to Organise Convention, nor ILO Convention no. 98, the Right to Organise and Collective Bargaining Convention. The right to freedom of association in trade unions is guaranteed in the Constitution (Article 19). The Trade Union Act of 1926 prohibits discrimination against union members and organisers in the formal and informal sectors, without distinction. STAKEHOLDERS OPINION AND ANALYSIS ON IMPLEMENTATION Officially, employers do acknowledge the right to freedom of association. Many stakeholders contend that in practice unionisation is discouraged. Workers who are active with unions and union organising can be targeted through false cases and other forms of harassment. Workers are regularly contacted to inform them of their rights but this does not necessarily translate into workers becoming active members of unions. fair wear foundation. India country study

20 6.5 Payment of a living wage Wages and benefits paid for a standard working week shall meet at least legal or industry minimum standards and always be sufficient to meet basic needs of workers and their families and to provide some discretionary income (ILO Conventions 26 and 131, the Universal Declaration of Human Rights, art 23(3) and art 25(1)). Deductions from wages for disciplinary measures shall not be permitted nor shall any deductions from wages not provided for by national law be permitted. Deductions shall never constitute an amount that will lead the employee to receive less than the minimum wage. Employees shall be adequately and clearly informed about the specifications of their wages including wage rates and pay period. OFFICIAL STATISTICS ON COMPLIANCE Not all wage earners are paid the minimum wage. Across all industries, around 73 million workers, equivalent to 42% of all wage earners, received wages that are below the national minimum wage floor of Rs. 66 per day in This includes more than half of all casual workers (58.6 million earners) and another quarter of all salaried workers (14.5 million workers). Female workers and those residing in rural areas are more likely to earn below minimum wages. Labour laws state that overtime should be paid at a higher rate, however these laws are often ignored. One survey also showed that garment workers who pack finished goods receive only Rs.106 (US$2.35) per shift. 19 LAWS AND REGULATIONS The directive principles of the Constitution declare that the state shall endeavour to secure... to all workers...a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities. Minimum wages vary according to the state and to the sector of industry. Such wages provide only a minimal standard of living for a worker and are inadequate to provide a decent standard of living for a worker and family. Most workers employed in units subject to the Factories Act receive more than the minimum wage, including mandated bonuses and other benefits. The state governments set a separate minimum wage for agricultural workers but do not enforce it effectively. 18 The Central Government has revised the National Floor Level Minimum Wage (NFLMW) from Rs. 100/- per day to Rs. 115/- per day effective from , on the basis of the rise in the All India Consumer Price Index for Industrial Workers during the period. The NFLMW is a non-statutory measure. Accordingly, all the State Governments/Union Territory Administrations have been requested to fix/revise minimum wages in such a way that in none of the scheduled employments, the minimum wage is less than National Floor Level Minimum Wage of Rs.115/- per day at present. 19 National Sample Survey Organisation, Employment-Unemployment Survey, fair wear foundation. India country study

21 STAKEHOLDERS OPINION AND ANALYSIS ON IMPLEMENTATION Stakeholders are unanimous in their opinion that no living wage is being paid within the industry. They disagree on the payment of minimum wages. Some stakeholders opine that even this bare minimum is not being paid but the government and employer organisations affirm that the minimum wages are being paid within the industry. The garment industry in the southern part of the country is more organised and operates within the factory system. Thus, payment slips and records are maintained and workers get a monthly wage. The industry is more dispersed and scattered in north India and work is contracted out through subcontractors and payments made on piece rate basis No excessive working hours Hours of work shall comply with applicable laws and industry standards. In any event, workers shall not on a regular basis be required to work in excess of 48 hours per week and shall be provided with at least one day off for every 7-day period. Overtime shall be voluntary, shall not exceed 12 hours per week, shall not be demanded on a regular basis and shall always be compensated at a premium rate. (ILO Convention 1) OFFICIAL STATISTICS ON COMPLIANCE No official statistics are available on the overtime being worked by workers in the garment sector. Although under the law, the working time cannot exceed 60 hours per week (48 hours of regular work hours and 12 hours of overtime), subject to a maximum of not more than 50 hours of overtime over a period of three months, it is estimated that the majority of the workers in the garment sector work beyond these permissible limits. LAWS AND REGULATIONS The Factories Act establishes an 8-hour workday, a 48-hour workweek, and standards for working conditions. These standards generally are enforced and accepted in the modern industrial sector, but tend not to be observed in older and less economically robust industries. State governments are responsible for enforcement of the Factories Act. However, the large number of industries covered by a small number of factory inspectors makes aggressive enforcement difficult. STAKEHOLDERS OPINION AND ANALYSIS ON IMPLEMENTATION Overtime is a serious issue. Previously women were only able to work until 7pm, but the labour department have extended working hours for women until 10pm. However this does not mean that workers have to be doing overtime until 10pm; there should rather be two shifts, 6am- 2pm and 2pm-10pm. fair wear foundation. India country study

22 6.7 Occupational health & safety A safe and hygienic working environment shall be provided, and best occupational health and safety practice shall be promoted, bearing in mind the prevailing knowledge of the industry and of any specific hazards. Appropriate attention shall be paid to occupational hazards specific to this branch of the industry and assure that a safe and hygienic work environment is provided for. Effective regulations shall be implemented to prevent accidents and minimize health risks as much as possible (following ILO Convention 155). Physical abuse, threats of physical abuse, unusual punishments or discipline, sexual and other harassment, and intimidation by the employer are strictly prohibited. OFFICIAL STATISTICS ON COMPLIANCE Consolidated statistics of the incidence and prevalence of occupational health and safety for the country are difficult to find as there are multiple agencies dealing with occupational health and safety issues, and no agency that covers safety and health of workers in unorganised sectors. LAWS AND REGULATIONS The two major legislations for the protection of health and safety at workplace are the Factories Act and Mines Act. The Factories Act (1948) deals with occupational health and safety as well as welfare of workers employed in a factory. Garment workers who work in factories are covered by the act but where it is outsourced to smaller units, these protections may not be available. The enforcement of safety and health standards also is poor. Although occupational safety and health measures vary widely, in general, state and central government lack the resources for comprehensive inspection and enforcement. Maternity benefits are provided both under the Maternity Benefit Act (1961) and the Employees State Insurance Act (1948). In 1997, the Supreme Court in Vishaka v. State of Rajasthan laid down guidelines seeking to prevent and prohibit sexual harassment at the workplace and provide for punitive action against those found guilty. STAKEHOLDERS OPINION AND ANALYSIS ON IMPLEMENTATION Factory inspectors note that common violations found during inspections include - not providing a crèche to factories employing 30 and above employees, for children under the age of six; not providing a canteen in factories employing 250 or more workers; not providing adequate toilets; and overcrowding. Overall, stakeholders were of the opinion that regular compliance audits by NGOs and independent auditors have ensured that the physical environment in the factory is maintained fair wear foundation. India country study

23 according to prescribed standards. Fire safety norms are in place in most factories and regularly monitored by the fire department. 6.8 Legally binding employment relationship Working relationships shall be legally binding, and all obligations to employees under labour or social security laws and regulations shall be respected. LAWS AND REGULATIONS The Industrial Disputes Act (1947) establishes the employment relationship and provides rights and protection to workmen. The act distinguishes between a workman and a non-workman. The large number of agricultural and other non-industrial workers were not brought within the scope of this act. The Contract Labour (Regulation and Abolition) Act (1970) regulates the employment of contract labour in certain establishments. Where the nature of the work is not intermittent or casual, no contract labour can be employed. STAKEHOLDERS OPINION AND ANALYSIS ON IMPLEMENTATION Although appointment orders and identity cards are issued to workers, contracts are not a regular feature of employment. Some stakeholders believe contracts are avoided as they would make it easier for workers to make legal claims on their rights. Some of the benefits as required by law are provided to the workers, such as insurance (which includes health and maternity benefits), a provident fund, a gratuity and bonus. There is no pension payable. fair wear foundation. India country study