The Tamil Nadu government’s final notification of minimum wages for the tailoring industry has halved the dearness allowance (DA) component for all categories of workers compared with the preliminary notification. This is a major change and in variance with its submission before the Supreme Court in November last year.
“The DA per month would now amount to Rs 4,070 for this financial year (till March-end 2025), compared with Rs 8,130 as per the DA calculation specified in the preliminary notification, which was also filed before the Supreme Court seven months ago,” said Sujata Mody, President, Garment and Fashion Workers’ Union (GAFWU). The Chennai-based union, which has fought for timely minimum wage revisions for garment workers since 2010, is now protesting the cut in DA as per the new order of May 31, 2024. Their demand is that the preliminary notification of November 6, 2023 be restored, without changes.
Though the sector is highly industrialised and integrated with global markets at one end, nearly the entire workforce – a majority of whom are women, landless migrants from all over the country, and from Dalit and other socially disadvantaged communities – are hired on informal terms or are under contractors, with little to no job security. Either way, they work in highly exploitative conditions. In practical terms, it is hard to enforce even the specified monthly minimum wages.
This move, singularly, and seen in conjunction with the often opaque processes in labour-related decisions, serves to discredit the DMK’s government social-justice, pro-poor and pro-women posturing.
The tailoring industry – which encompasses all readymade garment exporters, large organised domestic manufacturers as well as small and medium enterprises right down to home-based units with a few machines – is an important sector that employs lakhs and largely produces for a ruthlessly competitive global market. In Tamil Nadu, the industry has not seen minimum wages revised since 2014, because of severe pushback from employers and a raft of litigation. As reported in The News Minute, it is an ongoing case that went right up to the Supreme Court, involving employers, the state government and GAFWU, that had forced the state to come out with a preliminary notification to revise wages last year.
The latest notification, while leaving the ‘basic’ recommended rate hike unchanged (as per the November 2023 GO) has changed the DA calculation in two ways. One, it has brought forward the ‘start’ year in which the consumer price index (CPI) is considered, for the purpose of calculating the DA increase, from 2010 to 2013. Two, it has lowered the DA amount fixed per point increase in CPI, over and above the CPI for the selected year (or, the multiplicand factor), from Rs 45.95 to Rs 33.94.
The sum effect has been a lowering of the DA for all workers in this industry, from Rs 8,130 as per the preliminary notification, to Rs 4,070 per month in the new order, or roughly by half.
As the minimum wage is the sum total of basic wage and DA, this amounts to lowering the minimum wage itself by about Rs 4,060 per month (difference between the two) for each worker. This makes a substantial difference for workers who typically earn a monthly wage of Rs 10,000-12,000 or less (Rs 333 to Rs 400 per day) for 8-9 hours of work.
Whodunnit?
“The minimum wages sub-committee (a tripartite body) neither recommended nor accepted a reduction in DA, and our recommendations were placed before the State Advisory Board. If the DA has been cut, it is wrong,” said TM Murthi, National Secretary of the Communist Party of India affiliated to the All India Trade Union Congress (AITUC). He was a member of the sub-committee.
“The employer representatives were trying to get a third, even lower grade inserted in some skill categories, which we opposed. That would have indirectly reduced the DA for all workers. But they did not openly demand a lowering of the DA,” he told TNM.
This leads to the inevitable question: who changed the DA, and at what level of decision making? A reading of the May 31, 2024 GO shows that the Minimum Wages (State) Advisory Board, chaired by the Principal Secretary/Labour Commissioner, received objections and suggestions “from the persons likely to be affected by such revision”….”and it was decided to confirm the said preliminary notification with some modification.”
An email to the Labour Commissioner, Tamil Nadu, seeking an answer and requesting disclosure of the basis for the sudden change in DA calculation, and if any ‘scientific’ methodology was followed, did not meet with any response till the time this article was published.
The GO, which was issued nearly a month ago, is not even put up on the department’s website or available anywhere in the public domain.
The anomalies don’t end here. On February 26, 2024, the Labour Department announced the annual DA revisions for 72 scheduled employments with effect from April 1, 2024, of which tailoring industry was one. It officially fixed the DA for workers in the industry at Rs 5,495 for this fiscal year, based on the calculation method specified in its previous tailoring wage notification (in 2014, or 10 years ago). That DA is already higher than the DA of Rs 4,070 which the new notification implies.
“Not only has the DA been lowered over the preliminary notification, it is now lower by nearly Rs 2000 than the existing DA as per the 2014 notification. This is a great injustice to workers,” said G Sampath, general secretary, Banian and Pothu Thozhilalar Sangham, CITU, in Tiruppur.
In a letter to the Additional Chief Secretary/Principal Secretary to the Government of Tamil Nadu, Sujata Mody of GAFWU has called out the latest order as “arbitrary and predetermined.”
Indeed, adhocism of the state government, no matter of which political hue, in matters of minimum wage fixation, and lack of transparency in the process, are recurrent themes in the history of labour policy in Tamil Nadu in this sector.
The race to the bottom, of labour standards
Nothing illustrates this better than the fact that the present DMK government has, despite trade union representations, done nothing to remove the artificial dichotomy between ‘tailoring’ and ‘hosiery and knitwear’ industries. It was introduced by the previous AIADMK government in 2016 and further reiterated in 2018 in a GO brought about without any consultation. This led to far more depressed minimum wages in the hosiery and knitwear sector. Trade union sources have alleged that this division was clearly done at the behest of the politically influential knitwear garment exporters’ lobby based out of Tiruppur, in order to keep their wage costs low.
Interestingly, the lowering of DA in the tailoring industry to Rs 4,070 per month, brings it even lower than the DA for workers in the ‘hosiery and knitwear manufacturing industry as per the preliminary notification of January 31, 2024. But this GO is pending finalisation.
“This government has grossly betrayed lakhs of workers. Last year, we met the Labour Minister and Labour Secretary and represented that the artificial gap between hosiery/knitwear industry and tailoring industry, illegally created by the previous government in 2018, should be revoked. The Labour Secretary then told us they would take it up at the minimum wage committee when the next revision comes up. But nothing was done, instead, they have continued with two separate minimum wages, and now cut the DA also,” said CITU trade union leader Sampath.
CV Ganesan, Minister for Labour Welfare and Skill Development, did not respond when contacted for his comment.
Sowmya Sivakumar is an independent journalist.