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.

A woman makes brooms. Image: Courtesy of Paula Bronstein/Getty Images Reportage

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.

Legal loopholes

Most subcontracted home-based workers are not covered under labour or employment law because of the difficulty in identifying the employer – whether it is the intermediary (contractor) who directly places work orders; the supplier who puts out work to the intermediary; the manufacturer who outsourcers goods from the supplier; or the retailer who sells the goods.

The problem is that most labour laws have not caught up with rapid transformation in the world of work: they are designed for a labour market where the employer-employee relationship is clear and defined and the workplace is a factory or an office. Coupled with this is the fact that home-based workers tend to remain isolated from other workers and, therefore, to be less organised and have less voice vis-à-vis employers or public authorities than other workers. This means home-based workers have little leverage when a contractor or trader fails to comply with agreements.

The judgement also has implications for how we define the 21st-century workplace. By recognising the home as a place of work – as is increasingly the case – the court judgment has brought these workers out from the shadows, acknowledging them as workers and therefore as individuals who are entitled to labour rights. By implication, it has also acknowledged home as a place of work, not just a place of habitat.

Acknowledging the growth of home as workplace also links improved labour conditions to improved urban services and housing. For home-based workers, home is a productive asset and the poor condition, small size and inaccessible locations of their homes, have economic consequences. Poor habitat leaves home-based workers vulnerable to occupational health and safety hazards and limits their productivity. In time, perhaps the discourse on better work conditions and decent work place will include better homes and housing policies, particularly in urban areas.

Image: Courtesy of Paula Bronstein/Getty Images Reportage

This is just the beginning of a long road where the main challenge will centre around the issue of service delivery, as it is for many of the best intentioned and cleverly crafted policies and schemes. When the workplace is dispersed and the employer-employee relationship is disguised, delivering protection will remain an uphill task.

One proposed pathway to ease this difficult road could be for the state to simultaneously facilitate organising home-based workers into collectives to demand fair wages and social protection. Organising allows working poor women to voice their needs and demands more effectively and enhance their bargaining power, demand more supportive policies, laws and practices.

Although India does not yet have a national policy for home-based workers, there are other approaches that make a difference. State governments in India have set up Worker Welfare Boards for specific industries that are funded through a tax on production in those industries and deliver benefits to workers in the form of identification cards, toolkits, training and limited basic health care coverage. These small investments make a big difference in the lives of home-based workers.

There are a few good examples from outside the country where organisations have been able to garner benefits for home-based workers, such as with Thailand’s Homeworkers Protection Act, which entitles homeworkers in the country to minimum wage, occupational health and safety protection and other fundamental labour rights.

Shalini Sinha is Delhi Focal Cities Coordinator for Women in Informal Employment Globalising and Organising or WIEGO, a global network focused on securing livelihoods for the working poor, especially women, in the informal economy.