Industry dubs garment wage revision unrealistic

G BALACHANDAR Chennai | Updated on January 17, 2018 Published on July 22, 2016


With the Madras High Court upholding the government’s rights to fix minimum wages for garment workers, the industry representatives are fuming that the government’s decision was not pragmatic and it will render the garment exporters in the State uncompetitive.

A division bench of the Madras High Court last week upheld the Tamil Nadu government’s writ appeal and dismissed petitions filed by garment manufacturers to quash the revision in minimum wages for tailoring industry. The government’s final notification for minimum wage revision (30 per cent) in the tailoring industry was issued on December 3, 2014.

Varied wage patterns

For knitted garments, the minimum wage was fixed at ₹9,000-plus, while for the woven garment industry, it was ₹11,000-plus.

“It is ridiculous to have different minimum wage structures. Tailoring work is the same whether it is knitted or woven garment. Whether it is knitted or woven or home textile – all the three are doing the identical operations to the identical customers. One is using the woven cloth to make a garment; another is using a woven cloth to make a bed sheet,” Manikam Ramaswami, Chairman & Managing Director of Loyal Textile Mills Ltd, said.

He said “the illogical and very high wage revision will jolt the industry,” which has been facing challenges in boosting exports.

Tariff disadvantage

“Our garment exports should have been growing by 30 per cent, but has been growing at 2-3 per cent due to huge tariff disadvantage. On top of that, if you put very high wages, which is 20 per cent of the cost of garment making, it will have a significant impact. So, you can’t have a 30 per cent increase overnight. I am not against hike, but it should be reasonable and it should be in line with the rest of the country. You cant’ have an industry in Tamil Nadu paying 20 per cent more than Andhra Pradesh,” he observed.He also stated that such different wage structures would only convey wrong signals to investors as also a few law-abiding companies in the state.

No clarification

However, K Venkatachalam, Chief Advisor, Tamilnadu Spinning Mills Association, was of the opinion that the garment industry misunderstood the notifications and failed to clarify.

“Whenever the minimum wages were revised for the tailoring industry (which meant only tailoring shops), all stakeholders concluded, without sufficient understanding, that they were also applicable to knitting, hosiery, woven garments, made ups and home textiles where, tailoring is one among the process of activities. As long as the revisions were within the payable limits, no one bothered,” he said.

“But, under the 2014 government revision, the wages were hiked to a very high level and the companies felt that it would be too much for them to implement. Hence, many companies challenged the GO (government order) at the Madras High Court only on the ground that the rates of wages are very steep and such increases would make them uncompetitive.

Separate GOs

“However, they have forgotten the revision was only for employment in the tailoring industry. Hence, on the request of some companies, I processed separate writ petitions challenging that the impugned GO is not applicable to hosiery/knitting industries and for industries of home textile nature. Accordingly, the government released, in January 2016, two GOs fixing the minimum wages for hosiery and knitting industries separately,” he pointed out.

The writ petition challenging the applicability of the impugned GO for home textiles stands separated from the main batch and accordingly, it is still alive and the stay is continuing. Hence, those who are engaged in the manufacture of hosiery/knitted garments are advised not to bother about the High Court order upholding the GO as they are covered by separate GOs,” he said.

Published on July 22, 2016
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