Second wave cracks down on already struggling garment workers

Business Capstone International Pandemic

Right when everyone thought India’s battle with covid-19 was a success story, the second wave struck the country turned it into a cautionary tale and left the future of garment works in the dark.

Bengaluru: With wages she earned as a garment worker at one of the manufacturing units, in Bangalore, Rajama said she normally spent about Rs.100-200 a day on food. That amount fed her and her family of three.

Then came the Covid-19 pandemic which brought shopping for anything but necessities to a standstill, and the garment industry became one of the biggest hit sectors. Fashion retailers shut stores as shoppers stopped spending on non-essential items.

The impact of the pandemic on the fashion’s supply chain put the livelihoods of an already vulnerable section of the society, garment workers, at risk.

A report by Human Rights Watch stated that mass-market fashion companies place orders for manufacturing in low-wage countries across Southeast Asia, on the peripheries of Europe, and in locations such as Ethiopia to keep the production costs low. Workers and their families can barely survive on the pay. 

As the pandemic struck the world, the business at the manufacturing units dropped as buyers paused or cancelled new orders, as well as made changes to their recently placed orders.

Rajama, 30, has been working at a manufacturing unit for the about two years. The factory produces clothes for customers that include international fashion brands like Gap, Levi’s, and H&M.

Like many other factory workers in Karnataka, Rajama, wasn’t paid her salary for months during the lockdown. It made survival difficult for her family as she was the sole earner during that time. Unpaid salaries and cuts in her monthly income meant making cuts to the family’s food budget. “It’s been a very difficult time for my family. We have barely been able to survive,” said Rajama.

A study conducted by the Alternative Law Forum and the Garments Mahila Karmikara, found that 63 percent of the garment factory workers surveyed from Karnataka reported not having received any salary for the month of April 2020.

The Garments and Textile Workers Union (GATWU) president Prathibha R, said that the basic salary of a garment worker is still as low as Rs. 8,800, it depends on the zone. While zone one and two come under the metropolitan city category, zone three doesn’t. Which means less salary.” She added, “While the workers got leaves during the lockdown, they were deemed as paid leave by the management. Due to which they were asked to work extra hours later for which they were not even compensated.”

Despite the government advisory that employees should pay workers during the lockdown, Rajama said she only got half of her salary in her bank account.

Prathibha said that when GATWU raised the issue with the authorities, many people were paid their overtime salary, but not all.

Not many regular women workers

Many women workers working at garment factories, hired after the lockdown, were not regular workers. They were hired for piece-rate-work. Which means work paid according to the number of units produced instead of being paid on the basis of time spent on the job. Saraswati, a worker at one of the garment factory unit said she was being paid more than what a regular staffer earns in a day, which would be around Rs. 500.

While piece rate workers would earn a higher hourly remuneration than fixed rate workers, as this type of contract induces higher level of effort, according to a report by International Labour Organisation (ILO) piece rate wages have been reported to negatively affect the health of workers.

Swathi Shivanand, a research consultant at Alternative Law Forum (ALF) said, “Many factories have been reopened since the lockdown. While the situation is better now, factories are not hiring employees on full term basis as the employers would have to pay them full salaries along with additional benefits ESI, PF,etc. Instead women are being employed to do piece-work, which means that they would lack a steady income and job security.”

Another survey conducted by ALF on March 2021, which covered 25 factories in Bengaluru, stated that over 20,000 people lost their jobs, out of which most were women.

The survey revealed that even in the factories that have reopened, workers are being forced to resign. “Workers at 17 of 25 factories surveyed reported that they had been asked to resign by the company due to ‘losses’ suffered by the latter. Eighty-one percent of workers we spoke to said they had resigned. The rest were protesting the closure or were yet to resign,” stated the survey.

“The workers resigned as they thought if the factory went into losses and shut down, they won’t be able to get their dues,” said Swathi.

Some factories also reportedly promised workers that they will be re-employed when the situation stabilises, but that they should resign now. “Workers resigned also because they had little to no money during the months of the lockdown, and which had left them destitute. Faced with the loss of employment, workers ‘chose’ the only alternative of resignation because it would mean receiving some income immediately,” the report noted.

“Forced resignation is something the law doesn’t acknowledge. We should have laws that look into the definition of resignation,” said Prathibha.

The survey found that nearly 60 percent of the factories that closed down employed less than 100 workers. These factories did not need to seek prior permission from the state government before closing down permanently. About 89 percent of factories that closed down had a workforce of fewer than 300 workers. These figures attain crucial significance in the context of the new labour codes which raise the threshold of workforce limit from 100 to 300 workers for factories who need not seek permission for closure. This will leave a larger number of workers without the possibility of challenging the closure of factories.

“More than half of our workers have returned to their villages, so our company didn’t have to really lay off workers.” Suresh Kumar, CEO, Good Will Fabrics, said.

While that was the case for Good Will Fabrics, it wasn’t the same for all other manufacturers.

A survey conducted in the month of April 2021 by the Clothing Manufacturers Association of India (CMAI) found that close to 77 percent domestic garment manufacturers surveyed were contemplating a 25 percent reduction in staff as they expect business to contract in the coming months. 

Credits: author

Karnataka’s Labour Minister Shivaram Hebbar said, “For now there are no new decisions taken, but we have asked the factories to work at 50 percent capacity.” He added, “We are still working on what decisions should be taken. We are looking at the current situation and analysing the problem. We have to take well-thought-out decisions or else it might affect the people.”

In a statement he made in the Legislative Assembly, he announced that the government will take all the necessary steps for the safety and welfare of women employees working at garments factories.

This came in response to a question raised by BJP MLA from Tiptur Nagesh B C regarding facilities provided to women employees working in garment factories.

Hebbar said notices have been issued to 396 garment factories for not providing the required facilities for women employees as per rules and cases have been booked against 239 people for not providing minimum wages to women working in garment factories.

Fired and uncompensated

Fashion brands, during the Covid-19 pandemic, left millions of workers in the garment industry vulnerable, as they were denied full wages legally owed to them for work already completed due to order cancellations, non-payment and other harmful commercial practices.

A report by the Clean Clothes Campaign (CCC) estimated the adverse impact on wages for apparel workers in the Global South. The campaign arrived at these rough figures by calculating the ‘wage gap’ between average monthly wages paid to workers and what they were paid in the months from March to May 2020. In India, accounting for over 2.1 million workers in the three major garment-producing centres of the National Capital Region (NCR), Tirupur and Bengaluru, the report estimated that workers were owed nearly $380 million in wages.

Source: Clean Clothes Campaign

“During the pandemic, after brands retroactively cancelled orders on a scale of $40 billion, and only reinstated an estimated $22 billion of those orders, with a decline in demand when many stores closed, garment workers experienced increasing economic insecurity,” said Liana Foxvog, Crisis Response Director at Worker Rights Consortium (WRC).

The loss/decline of wages had an adverse impact on workers’ access to nutrition, as garment workers and their families struggled with hunger, a report by the WRC showed in November 2020. Seventy-seven percent of workers surveyed reported that they or a member of their household had gone hungry since the beginning of the pandemic, over 80 percent reported that they had reduced their food consumption or were forced to skip meals during the pandemic.

Tens of thousands of workers at factories that produce garments for leading fashion brands have been fired during the COVID-19 pandemic but illegally denied financial compensation, according to another report by the WRC that identified 31 export garment factories, in nine countries.

Brands and retailers implicated in the report, include Adidas, Amazon, H&M, Zara owners Inditex, Next, Nike, Target and Walmart.

According to the report, Dress Master Apparel Private Ltd., which was part of the Indian company Raymond Limited, a Gap supplier in Bangalore, India, closed in May 2020, leaving 1,200 workers without $346,134 legally owed severance. Gap claims that Dress Master paid the workers in full. However, worker representatives continue to report that workers have not received a single rupee of severance, and the WRC has concluded that Gap has been misinformed by Dress Master’s owners.

Governments in the countries where apparel brands are headquartered do not have strong enough due diligence laws that obligate these multinational corporations to respect workers’ rights and remedy rights violations in their supply chains. Brands’ own voluntary Corporate Social Responsibility (CSR) programs have failed to ensure decent wages and respect for workers’ rights,” said Liana. “The unprecedented, legally binding and enforceable Accord on Fire and Building Safety in Bangladesh, negotiated with global and national level unions, presents a different model,” she added.

According to Liana, a path forward to achieve key changes needed in the industry is to bring the model of worker-driven social responsibility to additional contexts and countries.

Purchasing practices during pandemic

Outsourcing has been a very common practice in the fashion industry. Brands mostly contract independent factories to manufacture clothes for them. They sought cheaper options to reduce the production cost, which means cheaper labour.

While this works out for the brands, it put the labourers in the factories in a very difficult position.

“The low prices paid by the brands to factories result in low wages for workers, and, with a low rate of unionization in the industry, workers typically do not have sufficient power to successfully negotiate for the much-needed improvements to working conditions in their factories. On average, garment workers’ wages amount to only a third of a living wage. In this context, three networks have put forward a proposal for an enforceable wage agreement,” said Liana.

As the pandemic hit the world, the brands cut their orders and with factories receiving lower order volumes, labourers were hurt even more.

Research by the Center for Global Workers’ Rights at Pennsylvania State University in association with the Worker Rights Consortium found that 65 percent of suppliers reported that buyers have demanded price cuts on new orders for the same products that they purchased the previous year. As a result, 56 percent of suppliers have been forced to accept some orders below cost.

Rajama is one of the millions of garment workers struggling in the fallout from Covid-19. Countries such as Cambodia and Bangladesh, where clothing exports are central to the economy, have also been hit very badly. In Bangladesh, factories have already seen $138 million in orders cancelled or postponed due to the coronavirus, Reuters reported. In the year 2019, the country’s garment exports ranged from about $2.7 billion to $3.1 billion, according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). Rubana Huq, president of the BGMEA, told Vogue Business that 20 factories collectively had $10 million in orders cancelled in one day this week. “Most brands are putting the orders indefinitely on hold and cancelling,” she said. “For them, it’s a question of survival of the business, for us it’s the survival of our 4.1 million workers.”

The government of Bangladesh has stated that it alone can’t help the workers. “This is an unprecedented crisis,” K.M. Abdus Salam, a senior government labour official in Bangladesh, told Reuters in January 2021. “The government can’t help alone. Major market players, including brands, buyers, and governments of sourcing countries, manufacturers, everyone has a role to play to ensure faster recovery of the sector.”

“All companies want to increase their profit,” said Rajesh N Masand, President of Clothing Manufacturers Association of India (CMAI). “The social responsibility to their suppliers comes later,” he added.

Data sourced from Clean Clothes Campaign. Credits: Author

Often the factories survive on thin margins. Masand explains, that if a brand cancels an order or demands a price cut, the factory might not have enough funds to survive. With no funds coming in they would be unable to pay their employees, which might lead to reduced work hours, or lay offs.

“Every good buyer gets goods on credit. The business runs on goodwill,” Masand said. “The buyer has nothing to lose. Eventually, everything comes down to the ethics of a brand.”

Masand believes that for now the industry as a whole needs immediate attention from the government.

“The garment and textile industry is the second-largest employer in the country after the agriculture industry. It provides employment to semi-skilled and unskilled workers,” he said. “The situation of the garment worker will improve only when the government will take this industry seriously and come up with solutions to fix the existing problems in it,” he added.

According to Prathibha, GATWU recently had written to the labour department asking for more information and demanded workers receive wages during the lockdown. So far the government hasn’t announced any support or assistance for garment workers.

While the crisis in India continues to worsen, and with no assistance in sight, the future of the garment factory workers remains unclear.

Workers such as Rajama only have so much choice. During this time they can only hope everyone does their part, and that companies whose labour they depend on make considerate decisions to help their workers.

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