The Joint Apparel Associations Forum (JAAF) this week refuted and corrected various allegations levelled by international trade unions with regard to the labour rights within the industry. Following is the full text of the JAAF statement.

In a recent press interview in Colombo Mr. Neil Kearney, General Secretary of the International Textiles, Garments and Leather Workers’ Federation (ITG & LWF) and his local counterpart – Mr. Anton Marcus has cast doubt on the credibility of the “Garments without Guilt” campaign by saying that workers in the garment industry in Sri Lanka do not enjoy adequate social protection.

In particular, Mr. Kearny has alleged that the campaign has two problems, namely-

Employees’ Councils operating in garment factories are controlled by the management and do not conform to the “rules of Freedom of Association” and “do not meet the Labour Standards” of buyers.

The campaign code as regards payment of wages needs to be revised as the current wages fall short of “living wage” to meet the basic needs of workers as required by the buyers and the ILO.

The European Trade Union Confederation (ETUC), affiliated to the ITG & LWF, has also claimed in a letter addressed to the EU that findings of several ILO supervisory bodies over recent years indicated several lapses and violations of ILO conventions, and ironically all these ILO CFA cases refer to the apparel sector.

ETUC has further claimed that government of Sri Lanka has “failed to address adequately the recommendations of the ILO committee of Freedom of Association”.

The International Confederation of Trade Unions (ICTU) to which ETUC is affiliated is also reported to have highlighted a number of violations of Core Labour Standards in Sri Lanka, in a letter addressed to HE the President.

Further, Mr. Kearney has emphasized that Freedom of Association is necessary to enable workers to participate in the decision making process, particularly at the present time when apparel industry is trying hard to survive for the benefit of all stakeholders.

All these various misleading reports, allegations and complaints are bound to have serious repercussions and impact on the image of the apparel industry of Sri Lanka and compliance of Core Labour Standards viz-a-viz, EU’s, GSP + concessions, if they are left unchecked and not countered with factual information and proper clarification.

The JAAF is deeply concerned over the misleading and baseless allegations made by the International Trade Unions, namely, the ITUC, ETUC and ITU & LWF to unduly influence the buyers and the European community at a crucial time when the granting of extension of GSP + concession to Sri Lanka is to be considered by the EC in a month’s time.

While rejecting the various allegations and complaints made by the ITUC, ETUC, and ITG & LWF as untrue and ill-founded, the JAAF wish to counter them in the correct perspective.

It has been made out that Freedom of Association and unionisation of the workforce are vital for effective workplace relations, particularly for consultation and bargaining, between workers and management and that unionisation in the apparel sector in Sri Lanka is less than 10 percent. For this reason, it has been argued that over 90 percent of the workforce in the apparel sector have no channel of communication and consultation with the management.

On the question of unionisation, two matters come to the fore. Firstly, Freedom of Association does not imply compulsory unionism. Freedom of Association means not only the right to form or join a union but also the right not to form or join a union. The ILO supervisory bodies also accept this rule and work on this basis. This explains why the unionisation rate world over is very low with the exception of a few countries.

As compared to other Asian countries, the unionisation rate in Sri Lanka is high as 20 percent or more for all sectors and over 10 percent in EPZ Enterprises. In the case of EPZ Enterprises in Sri Lanka the workers have two options to exercise the right of Freedom of Association and collective bargaining. Firstly, they have the right to form new unions or join existing ones. Over 10 percent of the workforce in EPZs have chosen this option.

The second option, which is available to EPZ (and BOI approved) enterprises, is to form “employees’ councils” comprising “elected representatives” of the workforce. Employees’ councils are primarily meant to provide a forum for joint consultation / social dialogue. But, being a body consisting of “elected representatives” of the workforce, ILO Convention No.154 (of 1981) concerning promotion on Collective Bargaining and ILO Convention No. 135 (of 1971) concerning Workers’ Representatives in Undertaking confer the right to “collective bargaining” on employees’ councils.

It is relevant to recall here that the right of employees’ councils to engage in collective bargaining was canvassed before the ILO Freedom of Association Committee (in case No.2255) by the ITG & LWF in 2003 on behalf of the Ceylon Mercantile, Industrial and General Workers’ Union (the CMU) as an infringement of the right of trade unions to bargain collectively under ILO Convention No.98. In December 2003, the Freedom of Association Committee of the ILO ruled that employees’ councils, composed of elected representatives of the workforce are entitled to engage in collective bargaining, subject to certain procedural changes for the election of the councils recommended by the Committee being given effect to by the government.

The recommended changes were duly effected in the relevant BOI Guidelines and since then employees’ councils are recognised by the ILO as duly elected bodies of workers’ representatives for purposes of ILO Convention No. 134 & Convention No. 154. They now operate as validly constituted independent councils devoid of any control or manipulation by the management as made out by the ITG & LWF and the ITUC.

In the context of EPZs in Sri Lanka, therefore, it is not only the number of trade unions but also the number of employees’ councils that matter in considering the process of consultation, communication, and negotiation and for the purposes of social dialogue and Collective Bargaining. This is the fact and the law as endorsed by the Governing Body of the ILO.

In the above light, it is useful to look at the number of trade unions and the number of employees’ councils operating in EPZ Enterprises. As of September 2007, the position is as follows: -

Total no. EPZ Enterprises - 264

No. of Enterprises in which Trade Union were functioning - 33 (12.5%)

No. of Enterprises negotiating with Trade Unions - 24 (10%)

No. of Enterprises granting Union “check off” - 11

No. of employees’ councils operating in EPZs - 110 (41.7%)

The BOI Guidelines on the formation and Operation of employees’ councils provides, among others, that where in a workplace both trade union and Employees’ Council operate and both have more than 40% representativity, it is the Trade Union and not the employees’ councils that is eligible to bargain collectively with the management. This provision is intended to ensure that the employer will not use the employees’ councils to undermine the operation of the Trade Union in the workplace.

Workers are free to choose between a Trade Union and Employees’ Council (or both). But in practice workers (as well as employers) seem to prefer Employees’ Councils to trade unions as they could deal with the management directly through their elected representatives from within the workplace instead of relying on trade union leaders who are often “outsiders” and are not familiar with the workplace environment.

Moreover, in EPZ enterprises problems discussed between workers and management are more related to working arrangements and work related matters rather than wages and working conditions which are already regulated by the BOI Manual on Labour Standards and the wage orders issued by the BOI annually.

With regard to payment of minimum wages to workers in apparel industry, the JAAF wish to point out that minimum wages in Sri Lanka are determined in conformity with the criteria laid down in the ILO Convention on Minimum Wage Determination. Accordingly, minimum wages are determined having regard to such factors as the basic needs of the worker and his family, the capacity of industry to pay, the wage rate of workers employed in comparable industries, the income of other social groups, as well as the needs of the economy and imperatives of national development.

Moreover, the minimum wages of workers, in the apparel sector are revised every year, having regard to variations in the cost of living index, whereas statutory minimum wages are revised once in two years. In addition, these workers are paid an annual increment varying between 6 percent to 10 percent. A good number of employers pay wages very much above the minimum wages and also provide other fringe benefits.

As regards, compliance of Core Labour Standards in the Apparel Industry and EPZ Enterprises, we are not aware of any serious violations, reported by any of the ILO, supervisory bodies in recent times. The issues over violation of labour rights raised by the ETUC & ITUC are without any foundation and factually incorrect.

However, we are aware of certain recommendation made by the ILO Committee of Experts on the Application of Conventions and Recommendations (CEAC & R) to the government of Sri Lanka to reduce the 40% membership for union recognition in EPZ Enterprises, which the government considered, in consultation with the Employers’ and Workers’ Organisations, and decided not to implement the recommendation as it would tend to promote inter-union rivalry and multiplicity of unions which are inimical to healthy Collective Bargaining and sound industrial relations in EPZ Enterprises. The decision of the government on this matter was supported by all employers’ organisations and majority of trade unions.

The factual situation analyzed above point to the fact that the apparel sector in Sri Lanka offer decent wages and working conditions to the workers, recognize the workers right to Freedom of Association, Collective Bargaining and other related trade union rights, and take every possible measure to effectively implement Core Labour Standards in garment factories to make “Garments without Guilt” a fact and a reality.

The apparel industry in Sri Lanka has existed for over 3 decades and is the largest single exporter in Sri Lanka encompassing almost 1 million persons. JAAF as the apex body of the textile and clothing trade normally does not respond to newspaper reports and articles. However, of late several inaccurate and sometimes scurrilous articles with serious vested interest in the local press has necessitated our response.

The Garments with Guilt initiative has had worldwide acclaim and the ethical manufacturing of clothing is being upheld as an example to all the countries in the region.