Indian government rollback on pensions a small victory, say unions | Reuters - Firstpost
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Indian government rollback on pensions a small victory, say unions | Reuters

  Updated: Apr 20, 2016 19:18 IST

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CHENNAI, India (Thomson Reuters Foundation) - Garment workers across the states of Karnataka and Tamil Nadu welcomed the government's decision to scrap a controversial proposal to change the rule on pension withdrawals but said the battle for their rights was far from over.

The government on Tuesday dropped its proposal - to allow the employer's contribution to the Employee Provident Fund to be released only at the retirement age of 58 - after thousands of protesters clashed with police in the information technology hub of Bengaluru.

"The rollback is a small victory for workers' unions. But with sweeping labour reforms being introduced, we are worried that the rights of the workers will be overshadowed by the welfare of big corporations," said R. Karruppusamy, director of Rights Education and Development Centre, a charity working with women in the textile industries in Tamil Nadu.

Under the existing rules workers and employers contribute equally to the EPF, and workers can withdraw the full amount saved at any time - for instance for education, healthcare or taking a lease on a house.

Unions were opposed to the proposal to limit withdrawals to the worker's share of the fund, and to force workers to leave the government contributions in the fund until retirement.

India is among the largest textile and clothing manufacturers in the world, supplying leading international brands. The textile industry is also the second largest employer in the country after agriculture.

Workers and rights groups say the hundreds of small and medium-sized enterprises use forced labour and treat workers poorly, abuses ranging from withheld salaries to debt bondage.

"These workers, mostly women, work in vulnerable conditions very tolerantly. The government is pushing them to a corner which is why they took to the streets, losing three days of wages," said R Prathibha, president of the Bengaluru-based Garment and Textile Workers Union, which led the campaign against a change in the use of pension fund savings.

Trade unionists have also been challenging the government over the gradual reduction in social security benefits for workers in the textile and garment industries.

"There are hundreds of small and medium enterprise employing young girls that do not give medical benefits, bonus or annual wage hike. None of the social welfare schemes are implemented here and the employee is practically paid daily wages," Karruppusamy told the Thomson Reuters Foundation.

Many firms have stopped offering their staff benefits such as health schemes, bonus provision, and cooperative stores in mill compounds, and pay an overall contract sum instead.

Activists say the existing laws are in theory beneficial for workers, but there is inadequate monitoring of the way they are implemented.

In the case of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, he said there were no active committees to monitor complaints in the more than 400 textile mills in Tamil Nadu's Erode region alone.

"Ensure compliance" (with the law) is the slogan of trade unions across the region have adopted as workers in Bengaluru prepare to start work when their factories reopen after being closed for two days of protests.

(Reporting by Anuradha Nagaraj, editing by Tim Pearce. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking and climate change. Visit

This story has not been edited by Firstpost staff and is generated by auto-feed.

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