Ease labour laws to help textile sector: Panel

Citing rigid labour laws as a major constraint to the growth of the clothing and apparel segment, a textiles ministry working group has called for liberalising labour laws by permitting contract labour in export-oriented units, allowing companies to adjust their workforce according to demand, and extend working hours.

The working group's report recommends that Section 10 of the Contract Labour (Regulation and Abolition) Act, 1970, be amended to exclude textile units engaged in export related activity (where exports or deemed exports comprise 50 per cent or more of the sales). This will facilitate outsourcing activities as well as contractual appointments. However, units would have to take care of the health, safety and social security of the workers.

The report adds that units employing over 100 people currently fall under the purview of the Industrial Disputes Act, 1956, which stipulates that they need approvals for laying off workers. This is a hindrance, especially for medium sized enterprises. Accordingly, the working group has recommended that the norms of Chapter V(B) of the Act be relaxed by keeping units employing up to 500 people (presently 100) outside its purview.

The recommendations are in line with the International Labour Organisation Convention on Termination of Employment, which empowers employers to adjust their workforce according to need.

The working group has also recommended that the government consider the demand of labour intensive sections of the textile industry, such as the made-ups and garment sector, to increase working hours from a nine-hour shift at present to 12 hours, and also increase the total working hours in a week from 48 to 60. This would allow the units to cater to peak season requirements of customers and compensate for lower labour productivity.

Another recommendation suggests that with the passing of the Special Economic Zones (SEZs) Act, 2005, state governments delegate the power of the Labour Commissioner to the Development Commissioner of the SEZ. "States with large textile manufacturing clusters should adopt flexible labour policies to compete with their counterparts in Chinese SEZs," the report states.

It further adds that textiles and clothing sector should implement the National Employment Guarantee Act, 2005, extensively, as the sector can provide 100 days assured employment at an average rate of Rs 60 per day.