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31 May 2023 Revision of the factory law in Karnataka and its consequences for workers, brands and suppliers in the clothing sector

In the Indian state of Karnataka, with its stronghold of the textile industry Bengaluru, drastic changes to an important working process are about to be implemented. The so-called Factories Bill 2023, Karnataka Amendment It replaces a standard that has been in force to date. Important labour law achievements such as the abolition of night shifts or the introduction of 8-hour days are to be lifted. The amended law is intended to give suppliers more leeway to react more flexibly to orders. The labour law organization Cividep expects significant deteriorations in working conditions for thousands of female employees.

A guest post by Pradeepan Ravi & Sreyan Chatterjee (Cividep India)

While the new labor laws in India are still Waiting for their full implementationThe Karnataka State Legislature passed the bill in February.Factories Bill 2023, Karnataka Amendment) amending the Factory Act of 1948 (Factories Act). The bill passed in both chambers focuses on changes to working hours, breaks and the employment of women on night shifts. The law has yet to be approved by the governor for it to enter into force.

The recent amendment is significant in that the Factory Act sets the standards for working conditions in the production sector, including the garment industry, which employs predominantly female workers. The changes The aim is to give employers more flexibility. in the planning of personnel and production, but do not take into account the Power imbalance in enterprises and could worsen working conditions and the well-being of workers.

Proposed amendments

• The amendment to section 54 of the law would allow the Karnataka state government to allow 12-hour shifts in factories, with the maximum weekly working time limited to 48 hours. However, the amended regulations provide that the daily working time can be changed on condition that the written consent of the worker is obtained and the remaining days of the week are paid leave. Perhaps this change could pave the way for more flexibility for employers in determining the number of working days per week, which could be four, five or six days.
• The amendment to section 55 of the law authorizes the government to increase the total working time without breaks to up to 6 hours per day. Previously it was 5 hours without breaks.
• Pursuant to the amendment to Section 56, the Government may inform employers that the maximum limit for the distribution of working time may be increased to up to 12 hours (including rest breaks). Previously, it was 10.5 hours.
• The amendment to Section 59 changes the way in which overtime wages are calculated in establishments. It allows the government to prescribe the daily or weekly working hours from which workers are to be paid overtime supplements. Under applicable law, workers are entitled to overtime supplements if the working time exceeds 9 hours per day.
• Section 65 has been amended to increase permitted overtime from 75 hours to 144 hours in the quarter.
• Section 66 now allows women to work in factories after 7 p.m., provided that the employer provides safety precautions and obtains written consent from the workers.

Potential impact on workers in Karnataka's garment sector

© CIVIDEP, IndiaThe amended law gives factories the flexibility to decide on working hours per day, including 12-hour shifts. This is contrary to the provisions of the ILO Working Time Convention 1919, which provides for the principle of an 8-hour working day. India, a founding member of the ILO, has signed this agreement. since 1921 in force.

Although the maximum permissible weekly working time is limited to 48 hours, it offers scope for disadvantageous interpretations for workers. by adjusting the quarterly and daily ceilings. In sectors such as the clothing industry, where production pressure is already high, employers could change working hours over and over again to match their order situation. For example, workers could be asked to work 12-hour shifts only in months of high production and not to pay overtime surcharges.

With the low wages prevailing in the sector, the 12-hour shifts or the 4-day week will force workers to take on informal or casual jobs to earn more – with further negative consequences for their health. Even when overtime is remunerated at higher rates, a long series of ILO conventions require legal control of overtime. These are listed below: (a) Convention on Weekly Rest (Industry), 1921 (No. 14), (b) Convention on the Forty-Hour Workweek, 1935 (No. 47), (c) Convention on Paid Leave (revised), 1970 (No 132)) and (d) Recommendation on the reduction of working time, 1962 (No 116)

It is clear that more monitoring by labour inspectorates is needed to ensure that overtime is done only in exceptional cases and that workers are paid for overtime.

Additional burden for women: The 12-hour shifts are unsuitable for women, considering that they are in time due to the disproportionate burden of care work and long commutes. The amended law does not take into account the needs of pregnant workers who will be most affected by these shifts. The amended regulations will make it even more difficult for workers to participate in the labour market.

Since the majority of workers in Karnataka's apparel industry are women, the change - which allows women to work night shifts - can have serious implications for safety. Although the bill imposes an obligation on employers to create facilities to ensure safety, there is little detail on the cost calculation and implementation plan. Provisions include an adequate number of women on night shifts, safe transportation with verified drivers, pre-determined routes, and female security personnel. Without clear implementation guidance, compliance would be neither uniform nor effective, as costs would deter most suppliers with lower profit prospects.

This amendment contradicts the spirit of the 1990 ILO Protocol on Convention on Night Work (Women) (P089), which calls for agreements between employers and workers or their representatives to decide on night work for women. The ILO Convention provides for protective measures for pregnant workers who perform night shifts. The bill does not contain any reference to any of these protective measures for workers.

Consent question: Workers' approval of production flexibility is an important safeguard. However, it was left to the individual employers to apply this consent mechanism. It is also unclear whether this consent scheme would work on an individual or collective level involving trade unions - leaving employers (and brands) a wide margin for specific solutions. The amendment to Section 54 merely indicates that workers' consent to such amendments should be in writing.

The possible increase in daily working hours, including 12-hour shifts, and the changes in permissible overtime could also have a detrimental effect on workers' whereabouts in the garment industry. Social reproductive pressure, including childcare and household responsibilities, is borne disproportionately by these workers. Any increase in daily working hours is an additional burden and could ultimately prevent their participation in the labour market.

Increased risk of harassment: Verbal harassment and production-related pressure on workers have always been high in the apparel industry. Due to the increasing temporal dispersion and the many hours of work without rest breaks, they are now exposed to an increased risk of harassment and gender-based violence. Lack of complaint systems and communication mechanisms in the factories also makes it difficult for workers to report incidents and complaints.

Long working hours and increased overtime can have an impact on health. This could also lead to an increase in work-related accidents and injuries. Most factories lack basic medical infrastructure; Legislative changes have so far not provided for any improvement of these institutions.

Although the amended law increased the permissible overtime from 75 hours per quarter to 144 hours per quarter, it remains unclear how the overtime pay is to be calculated. Since the workers do not have collective representation, they could be disadvantaged by the changes in overtime wages. Failure to pay these wages is already a problem, and the changes could further complicate timely disbursement.

Workers' collectives react

• The Joint Trade Union Committee, made up of national trade unions, has spoken out against the amendment of the Factory Act, calling it a step against workers' interests. It aims to help employers reduce labour costs.
• Many unions throughout Karnataka have organized demonstrations against the changes, and some have called on the state governor not to approve the bill.
• The All-India Trade Union Congress (AITUC) has filed a complaint with the ILO about the amendments to the Karnataka Factory Act. He pointed out that the amending law violates ILO conventions and declarations that India has signed.
• This Centre of Indian Trade Unions (CITU) states in its letter to the Governor of Karnataka State that the share of wages in the net income (NVA) in Karnataka is low compared to the national average. It is 15.04 %, while the national average is 18.87 %, as shown by the figures of the annual industrial survey (2019-20). By contrast, the share of employers’ profits in the NVA is 46.11 %, while the national average is 38.71 %. The letter states that the changes "will further reduce the share of wages and increase the share of profits (of employers)".".

What Global Brand Companies Can Do

The bill presents a number of new challenges - from protecting labour rights to avoiding further human rights risks. Against this background, multinational companies that are serious about effective human rights due diligence in their supply chains can take the following steps:

• Ensuring decent work in line with international standards and taking proactive measures to protect workers in their supply chains in light of the changes
• Compliance with the ILO standard of 8 hours of daily working time in supply chains instead of compliance with poorer labour standards in producing countries
• Implement effective measures and safeguards to ensure that 12-hour shifts and night shifts for female workers are not abused by suppliers
• Documentation and resolution of the new risks arising from the changes in order to conduct a thorough human rights due diligence
• Dialogue with supplier factories and other stakeholders on the impact of the amended laws on workers in their supply chain
• Ensure that wages are not lowered below current levels and introduce measures to pay living wages to workers

In the spirit of decent work

© CIVIDEP, IndiaEffective legislation strikes a balance between legitimising the strict control of the production process by employers and ensuring adequate wages and working conditions for workers. If this is not the case, it is important that brands, suppliers and workers come together to negotiate the interests of the workers.

The close regulation of working time is subject to consistent international regulation and standard setting through the International Labour Organization conventions and the United Nations Guiding Principles on Business and Human Rights. The UNGP Guiding Principles on Pillar 1 of the State Obligation to Protect states: It must be ensured that other laws and policies governing the establishment and day-to-day operation of companies, such as company law, do not restrict, but allow, respect for human rights by companies.

In the Specialist literature on labour legislation is generally recognised that national working time laws can ensure fair competition between countries (and regions) and ensure that no competitive advantage is created by diluting workers’ economic or job-related rights. These changes risk creating a business environment in which suppliers could violate these international standards.

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The article was written by Cividep India written and translated into German by FEMNET.