Last Friday, the Supreme Court handed out a landmark ruling when it ordered a garments firm named Godvari Garments Limited to pay Rs 10 lakh in pensions to women who stitched clothes for the company from their homes nearly three decades ago. The ruling is an important first step in recognising the rights of India’s nearly 3.74 crore home-based workers to social security benefits and labour protections.
Although they are often involved in producing goods for major global retail firms, home-based workers lack visibility and recognition as workers within these supply chains and are systematically denied their rights.
The Godvari case dates back to 1991, when the government first issued notices accusing the company of defaulting on payments to the Employees’ Provident Fund, India’s state-run pension fund. The manufacturer argued that the work could have been done by anyone and that it had no supervisory control over the seamstresses, so they were not employees. But the court dismissed that argument, saying that since the manufacturer had the right to reject defective work from the home-based workers, it actually did have supervisory control over them.
Extending home-based workers the same rights and benefits as other workers could transform women’s work in India, especially since this work is on the rise in today’s changing supply chains and markets. But more steps need to be taken to ensure the nearly 40-million home-based workers are counted, recognised and included in laws and policies that could support and protect them.
Growing trend
Home-based work is a growing trend, as supply chains become more complex and firms seek to cut and download costs. These workers do everything from putting together electronics for global retailers to stitching clothing for local retailers or international chains to weaving carpets. What’s common among them all is that their work is done from the home – often in slums, where the conditions are challenging.
While some of these workers are self-employed, creating their own goods, many are sub-contracted workers (referred to as “homeworkers”), who produce goods for firms up the supply chain, both nationally and globally.
Homeworkers are particularly vulnerable to exploitation, often with little knowledge of whom they are producing for beyond their middleman or contractor who outsources work to them. In these situations, women working alone in their homes have almost no negotiating power. It is estimated that over 50 lakh homeworkers are part of garment and textile supply chains in India’s domestic and global supply chains alone.
The reasons behind this trend are worrisome. Leading firms and suppliers in global value chains outsource production to homeworkers so they can download the risk of fluctuating demand onto the homeworkers. They issue work orders only when there is demand. As a result, the homeworkers are forced to assume most of the non-wage costs of production, such as workplace, equipment, electricity and transport. This practice also leaves homeworkers in a vulnerable position, unable to count on sustained work and consistent earnings. At the same time, firms avoid paying for worker benefits.
These costs of production weigh heavily against the paltry piece rates homeworkers earn. A study by Women in Informal Employment Globalising and Organising (for which the author of this piece works) found that sub-contracted garment workers in Ahmedabad earn between Rs 24 and Rs 240 per day, but most earn under Rs 200. Workers in the study reported that if they ask for better wages, they are told the work will be given to someone else.
What makes improving conditions for home-based workers so challenging – and this ruling so important – is that they work behind closed doors and in isolation. They do not have the solidarity of working in a factory, and so face even bigger hurdles to gaining the bargaining power to call for basic labour rights and social security benefits, such as improved wages or healthcare benefits.
The recent judgement is an effort to shore up legal protections for home-based garment workers, and a critical step forward in the enforcement of employers’ obligations.