When one of the factories of Euro Clothing Company in Srirangapatna, a town in Mandya district of Karnataka, closed at 5.30 pm on Saturday evening, Pallavi* heaved a sigh of relief. It signalled the end of her work week.
But even before she could pack up her things and head home, she was jolted by an announcement made at the factory of the clothing company.
The announcement confirmed that workers in the second factory of the company (in Srirangapatna) will be laid off and work at the unit will be reduced in view of shutting it down. It also stated that the workers will be paid half of their wages and the factory will not be operational.
"It came without warning,” Pallavi recounts. “At 5:40 pm, when half of the workers were outside the factory and the other half was inside getting ready to leave, a notice was stuck and announcements were made on a mic stating that we were being laid off.”
The factory, which is affiliated to Gokaldas Exports Ltd, one of the major exporters in Karnataka, had removed some of the machinery in the factory earlier in the week but workers say they were not given any communication about lay-offs.
A notice, signed by Manjunath, the factory manager, stated, "The management of the company has decided to lay off the workers at Srirangapatna plant with effect from June 8, 2020, in the interest of the plant and also to save the employment of the workmen."
The notice said that the reason for laying off the workers was due to the effects of the COVID-19 pandemic on the manufacturing activity of the company. "The adverse circumstances prevailing in India, as well as the countries where overseas buyers are located, has resulted in overseas buyers cancelling their orders or withdrawing their orders and there is uncertainty about the market conditions. All these factors have cumulatively resulted in the inability of the company to provide employment to the workmen on the rolls, for want of orders to undertake manufacturing activities at the plant," said the notice.
After the contents of the notice were communicated to the workers in the factory, many workers staged a protest, demanding answers from officials in the factory. "We told them that laying us off like this is illegal. But we did not get an adequate response from them," Pallavi added.
The protesting workers dispersed after Roopa MV, Tehsildar of Nagamangala, reached the factory and assured them of mediating a discussion with factory officials on Monday.
Speaking to TNM, Roopa MV, Tehsildar of Nagamangala, said, "We were not informed about the lay-off notice either. When the factory officials shifted some of the machinery last week, we had approached them. They told us that the orders had been existing cancelled and that is why they were shifting the machines. They said that it was only on Saturday that the lay-offs were confirmed.”
The factory in Mandya was established in July 2010 and manufactures clothes of brands from leading Indian retailers as well as brands from Europe and the United States of America. There are about 1,300 workers employed in the factory.
According to labour activists, the lay-offs were in violation of section 25M of the Industrial Disputes Act, 1947.
The Act states that prior approval from the “appropriate government” is required to lay-off a workman when the industrial establishment (not being of a seasonal character or in which work is performed only intermittently) has more than hundred workmen employed on an average per working day for the preceding 12 months. The government concerned — which, in this case, is the Karnataka government — has the authority to decide whether the establishment is, in fact, seasonal or not.
Gautam Mody, General Secretary of the New Trade Union Initiative (NTUI) of India, told TNM that the Garment and Textile Workers Union (GATWU) in Karnataka had sent letters to the Labour Department in the state when the company removed machinery from the factory last week.
"We had sent out the first letter on June 1, informing you (Labour Commissioner) that the company is removing machinery and reducing work with the intention of shutting the factory. We further informed you on June 5 that the company has stopped production the factory and had urged you to convert the earlier letter dated June 1, an industrial dispute and admit it to conciliation under the Industrial Dispute Act," read a statement by Prathibha R, President of the Garment and Textile Workers Union (GATWU).
“We will mediate a discussion between the workers and factory officials on Monday," said Roopa.