No wage hike for TN garment industry workers in 10 years, despite top court order

Tamil Nadu state government is inordinately delaying the final notification of the revised minimum wages for the garment industry despite the deadline of November 8 last year set by the Supreme Court.      

The last wage revision in the state was nearly 10 years ago. The Minimum Wages Act stipulates a revision of wages at least every five years, and the state government order in 2004 sets it at every four years.

While the state government issued a draft notification on November 6 after the Court’s direction, more than three months have gone by and the final notification is nowhere in sight. This, in effect, denies lakhs of workers employed in the garment manufacturing sector the right to a higher, legally entitled minimum wage.

The draft notification has fixed the basic component of the minimum wage for three zones at Rs 8,156-8,568 for the highest skill category (cutter) and Rs 7,400-7,779 for the lowest (helper) – a modest 48 percent increase against October 10, 2014 wages, modest as it is over a decade.

“Including the dearness allowance, the minimum wage would range between Rs 15,500-16,700 per month across the categories and zones,” said Sujata Mody, president of the Garment and Fashion Workers’ Union.

“On February 6, when our case was heard by the Supreme Court bench, the judges were told that the delay was due to various manufacturers asking for a personal hearing,” said Mody.  

Subsequently, the apex court in its order noted that “no provision in law has been shown that makes a personal hearing mandatory on objections being received by the state government. The state government shall adhere to the timeline fixed by this court in terms of the earlier orders.”

GAFWU is the second respondent, along with the state of Tamil Nadu, in the special leave petition [nos. 29675-29706/2016], where about 30 other Chennai-based garment manufacturer-exporters have appealed in the Supreme Court, against the Madras High Court order of July 13, 2016. 

The High Court, at that time, had directed a host of companies in the industry to comply with the tailoring wage notification of October 10, 2014 – which had revised wages against 2004 – and pay arrears and 6 percent interest on wages to workers from date of notification to the date of payment. 

Notably, one of the petitioners against this order, Ambattur Clothing Pvt Ltd, is part of the diversified Ambattur Clothing Group with manufacturing units in three other countries. It is also the creator of ColorPlus brand, and supplier to top brands like GAP, Banana Republic, and Levis. 

And, ironically, it is the case that has now led to the state government standing exposed before the Supreme Court for not having revised wages for another nine years and more.

Revision of minimum wages for the tailoring industry in Tamil Nadu has been highly contentious in the past, given the state is a hub of export garment manufacturing clustered around Chennai and Tiruppur, and is both a major source of revenue and employment. The industry has tried – and is still trying – in innumerable ways to keep wages low.

A sub-committee was also constituted to finalise the present notification.

“In the meetings of the sub-committee, the management side represented that a 48 percent increase was too high and that they would lose business to other states and countries; that there should be parity with the ‘hosiery minimum wage’, and a minimum 10 percent difference in wages between each of the skilled, semi-skilled and unskilled categories,” said TM Murthi, national secretary of AITUC, who is also member of the committee. 

On the argument that the increase is already inadequate and that it is impossible for a family to survive on Rs 15,000-16,000 per month in current times, “they shockingly said these were uneducated women workers who cannot be considered the main breadwinners of their families and have even given that in writing”, he added.

“On the contrary, even by the government’s own calculation of an 8 percent annual increase, the wages should be increased by 80 percent, and not 48 percent, taking into account it is 10 years since the last revision,” said G Sampath, general secretary of Banian and Pothu Thozhilalar Sangham, CITU, in Tiruppur.

“The employers also wanted the number of zones to be increased to four [from three], creating an even lower wage category for workers in village panchayats. I would say the number of categories should in fact be reduced to only two. Basically, they are trying every crooked way possible to keep the wages low and prevent this notification from being implemented,” he added.

“The cost of living is the same for workers, whether in a village or city – if anything, residents in villages face higher costs because of lack of accessibility. Creating a fourth zone would encourage companies to set up more units in rural areas and further exploit workers there. They already are doing that, with the government giving incentives and cheap land, in the name of rural employment. But in reality, it is mostly Dalits, women and migrants who are hired in rural areas. Many stay in company-provided hostels, work for low wages missing out on an education, and face human rights violations that go unnoticed. Setting up units in some rural areas could also exempt employers from ESI coverage,” pointed out R Karuppusamy, director of Rights Education and Development Centre, an NGO for rights of workers in the textile industry based in Sathyamangalam.

The present delay in the revision of minimum wages is a double travesty, given that a similar situation had played out in the past before the October 2014 revision. That revision too came about after an arduous court battle, with numerous stay orders obtained in batches by employer-petitioners at the Madras High Court objecting to the revision in 2004, the last of which were dismissed only in 2012, after GAFWU intervened.

However, this time around, there are no stay orders in the way, as noted by the Supreme Court in its hearing on October 31 last year.

Ambattur Clothing was unreachable for comment.

The red herring ‘hosiery’ wage

Meanwhile, on January 31, the state government came out with a draft notification revising the minimum wage for the “hosiery and knitwear manufactory” industry, also upon the apex court’s order on December 5, 2023 in the same SLP hearing.

According to this notification, the ‘helper’ (lowest skill level) category of workers would get a basic pay of only Rs 4,635 per month, compared with Rs 7,400-7,779 per month for the same category in the tailoring minimum wage. The DA component in the hosiery minimum wage also works out to be a significant Rs 3,176 lower than the tailoring minimum wage, as per the new draft notifications. On adding them, a helper under tailoring wages would be entitled to a minimum wage of Rs 15,908 per month under tailoring, but only Rs 9,499 under hosiery – a major difference of about 6,400 per month.

Why does this matter? Because the industrial units in Tiruppur and other places have been claiming since 2016 that it is hosiery and not tailoring wages that are applicable to them, though they were following the latter till 2014.

It is important to note that the government resurrected the hosiery manufactory wage in 2016, after a 56-year gap. Those wages were fixed much lower than the tailoring wages notified in 2014.

An email query to the principal secretary or labour commissioner on the delay in notifying tailoring wages and the basis for the difference in DA between hosiery and tailoring wages did not get any response till the time of this report’s publication.

Gender bias in hosiery minimum wages?

Another important distinction is the huge gap of Rs 3,552 per month between the helper (lowest skill category) and cutting/tailoring (highest skill) within the hosiery wages, compared with a gap of Rs 750-800 within the tailoring minimum wage. 

 “In Tiruppur and many other places, garment manufacturers employ mainly Dalit women as helpers, giving them lower wages. It is in the interest of the industry to keep a wide differential between the tailor and helper categories, even if there might not be much difference in the effort,” pointed out Mody.

It is the fixation of higher wages for the helper category in the new tailoring minimum wages that explains, in large part, the strong opposition by the industry to the wage revision, she feels.

The surreptitious 2018 notification

“The 2016 hosiery wage notification had no basis. It was brought about without any committee being set up or any discussion with the workers’ unions,” said Sampath.

In February 2018, the Tamil Nadu government went a step further and brought out an extraordinary gazette notification that amended the definition of the hosiery industry itself by stating, “For the purpose of this Schedule, the hosiery manufactory includes knitwear manufactory, whether for export or domestic purpose.”  

“This change was disputed at the Advisory Board before the notification was brought out, but the government came out with the GO nevertheless. AIADMK MLAs KN Vijayakumar (Tiruppur) and A Natarajan (Palladam) were illegally present at the Advisory Board meeting and influenced the outcome in favour of the management,” alleged Sampath. The CITU had objected to their presence at the meeting, and the trade unions have since contended that the 2018 notification was illegal. 

But that GO continues to operate to date, and the Tiruppur industry and knitwear exporters refuse to accept the tailoring minimum wages as applicable to it.

Sujata Mody said, “The trade is tailoring; it should not matter what the fabric or product is. As these are time-rated wages, any differences in effort because of differences in fabric or complexity would anyway be compensated commensurate with the time taken to finish the task. Having a multiplicity of wages is only leading to a lot of confusion and giving scope for the employers to misuse it.”

In an affidavit to the Madras High Court in 2014, Harish Dwarakanathan, chief financial officer of the Ambattur Group, submitted on behalf of the company: “In view of the harsh and penalising revision now made, it has almost become impossible for the petitioner to continue their business in Tamil Nadu. The tailoring industry is a highly competitive industry, and the exporters work on a very narrow margin of profit. If the present revision is allowed to continue, the petitioner has no other option but to wind up the business.”

10 years on, Ambattur Clothing is alive and kicking, with a global, diversified business.

But how much longer do workers wait before the state owns up to its primary responsibility and shows urgency in ensuring their fundamental right to a legally entitled, even if paltry minimum wage, is not denied to them year after year?

(Sowmya is an independent journalist)

This report was republished from The News Minute as part of The News Minute-Newslaundry alliance. It has been lightly edited for style and clarity. Read about our partnership here and become a TNM Member here.

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