The day ‘Modi ge dikkara’ chants by over 100,000 garment workers forced the Modi govt. to roll back its contentious Employees’ Provident Fund withdrawal notification.
The city is baffled, the administration is perplexed, and the central trade unions are twiddling their thumbs. They are still not quite sure how it all happened, who is to be blamed with the state government launching a police probe to catch the ‘instigators’. What we witnessed on the streets of Bangalore on 18th and 19th April can perhaps be seen as a powerful and a militant expression of discontent in recent times by a section of the working class, demanding the right to withdraw their earned provident fund. An inalienable right of the workers that the government had sought to restrict. Significantly, it is the women workers from the garment factories in and around Bangalore who led the protests and over 1.5 lakh workers, again mostly women, participated in vociferously opposing government’s unilateral decision that would not just severely compromise their household budget planning, but becomes a matter of survival under the existing precarious conditions of employment.
As per the Ministry of Labour and Employment Gazette Notification dated 10th February 2016 [No.G.S.R.158(E)] amending the Employees’ Provident Fund Scheme 1952, an employee (member of Employees’ Provident Fund) can not withdraw the entire amount of funds from her/his PF account till they attain the ‘new’ retirement age of 58 years. As per the proposed amended rules, the employees are only entitled to withdraw their part of the contribution to the PF and the interest accrued on it and not the employer’s contribution and interest till they turn 58 years. The notification was to come into being from August 1st 2016 but the protests by the women forced the central government to roll it back. Recent news reports reveal that some of the central trade unions were actually not opposed to such a specious move by the government, but had to change their stance in the face of the spirited protests by the garment factory workers in Bangalore.
However, locally based unions such as Garment and Textile Workers Union (GATWU) affiliated to the New Trade Union Initiative have been opposing such an untenable proposition that they claim would hurt the interests of the workers and would be a serious infringement on their rights. Gautam Modi, General Secretary of New Trade Union Initiative (NTUI) in a public statement insisted that: ‘Workers must enjoy the continued right to withdraw their earned EPF monies so long as government is unable to put in place public policy that guarantees full employment or, at the very least, guarantees a minimum wage linked unemployment allowance’.
The media called the protests by the women as ‘spontaneous’ and ‘leaderless’, with the state bureaucrats wondering ‘how can women behave this way?’ However, GATWU President Pratibha R. said that the discontent amongst the garment workers has been simmering for sometime now given the pitiable wages and inhuman and exploitative working conditions in these factories that are part of the global apparel production network. The garment industry in Karnataka is concentrated in Bangalore, and the nearby towns, and employs an estimated 5.5 lakhs workers, 90% of whom are women. A 2015 survey report by GATWU titled ‘Wage and Work Intensity in Garment Sector: Study of Bangalore and Karnataka’ revealed that average working day for the women is 17 hours a day which includes work time in the factory, Over Time and travel time. Wages paid are about Rs. 7,000/- per month, which is regulated by the minimum wages fixed by the State Government, and there is not a single instance of wages being fixed by collective bargaining. The survey further revealed that the direct shop-floor labour cost for an H&M skirt with a marked price (MRP) of $24.99 (Rs 1666.46) was just 1%; for Walmart T-shirt for children priced at $4.44 (Rs 296) was only 2.5%; for an Old Navy (Gap) denim short priced at Yen 2490 (Rs 1491.77) was 2.9%. (Full report can be accessed at the end of this post)
GATWU and other observers have noted that the protests on the streets last week was an ‘outpouring of the rage building up inside the garment workers’. The PF issue thus providing a spark for the struggle. Pratibha R explained: ‘PF operates as the sole safety valve in the lives of these workers. In general the managements of garment industry ensures that workers do not complete 5 years of work so as to rob them of their right to gratuity. Having worked for pathetic wages, the PF amount is the sole saving… that helps them tide over when they are forced out of employment and as they search for another job. PF amount of Rs. 40,000 – Rs. 50,000/- helps them to survive and even invest on lease amounts for their rental houses, marriages, etc.’ This perhaps explains the protests in Bangalore which is not about whether it was leaderless or spontaneous, but what prompted the protests with such force and what impacts do these policy or legislative changes have on the lives of the women.
The fact of the matter is that a vast majority of workers do not have an uninterrupted employment until the age of retirement and receive intermittent employment. And in the absence of any possibility of life-time employment or provision for an unemployment benefit, workers have no choice but to rely on their retirement funds to survive between jobs and hence are forced to withdraw their PF savings for survival, explained Modi.
Employment Provident Fund, which is a contributory public saving scheme, where both an employee and the employer contribute to the employee’s PF account, has an estimated corpus of Rs 8,25,000 crores. It has been in the eye storm for a while now with the Finance Ministry proposing to invest part of the corpus money in the stock market, a proposal so far been opposed by the Labour Ministry and Central Trade Unions. However, in 2105 Labour Ministry changed its stance, and the government allowed for 15% of the EPF funds to be invested in the stocks.
Besides the proposal to invest in stocks, the government has not quite revealed the financial driver behind its move to restrict employees’ from withdrawing their PF money. Explains Modi: ‘It (notification) comes at a time when the government would like to offer workers the right to opt out of the only legislatively guaranteed retirement fund in favour of private pensions. It comes when government has left no stone unturned to advantage private pension funds’. Perhaps, this explains the government’s keenness in pushing through the notification –‘offering a level playing field’ to the private pension funds. ‘With no capacity to inspire confidence in the very private sector that it supports, the BJP government is seeking to secure at least half of the amount in the EPF over an entire working life span of 35-40 years of workers to create a ‘stable’ resource base for the BJP government to place at the disposal of private capital’, said Modi.
In light of the setbacks central trade union movement has suffered in last twenty years, the working class, especially the growing section of unorganised workers who have remained alienated from central trade unions will seek out new modes to carry out their struggles. The protest by garment workers of Bangalore may hint at sign of things to come.