Apparel exporters oppose amendment of Contract Labour Rules

Apparel exporters' body AEPC has strongly opposed Rs 10,000 as minimum payable wages to contract labour, saying if it is implemented, the industry will not be able to afford the existing level of employment and hence capacities and turnover will be affected.
The Central Government has proposed to amend Rule 25(2) (iv) of the Contract Labour (Regulation & Abolition) Central Rules, 1971 to ensure minimum monthly wage of Rs 10,000 to contract workers of the country.
Asserting that the proposed move has come as a "shock" to the apparel industry, AEPC said it could lead to a decline of at least 10 per cent in the export turnover, i.E. Rs 11,000 crore of exports in a year and a proportionate decline in employment.

"For apparel manufacturers, the increase will be around 26 per cent more on account of PF (12 per cent), ESI (4.75 per cent) and Bonus (8.33 per cent). Adding service tax, the total incidence is 41 per cent. Hence, they will effectively have to pay Rs 14,100 to a contract labourer, an increase of over 100 per cent for some states.
"The industry needs to demonstrate wage parity for similar work. Hence this increase in wages of contract labour will either violate wage parity norm or lead to unrest in the industry. Also, wage is fixed as per the work performed and on the basis of skills. The suggestion for fixation of Rs 10,000 for contract workers is arbitrary and will create distortions," Apparel Export Promotion Council (AEPC) said.

It is estimated that if this provision is uniformly implemented across all states, the result will be over 90 per cent increase in wages in states like Odisha and Rajasthan and over 30 per cent for most of the other states.
There is no proposal to bring into the ambit of Contract Labour (Regulation & Abolition) Act, 1970 those establishments and contractors that employ less than twenty workmen.
India's apparel sector recorded an export turnover of Rs 1,11,235.5 crore in 2015-16. It provides employment to over 45 million people directly and 60 million people indirectly.