“CLAIM REJECTED”: THE PROMISE AND FAILURE OF DIGITALISED FUNDS FOR GARMENT WORKERS
Janani G
Rasathi’s* voice is loud enough to reach four people hunched over a mobile phone. It’s a Sunday afternoon, the only day off for the forty-two-year-old, who has been a worker in Bangalore’s garment industry for the last fifteen years. She lives only a few kilometres from the FEDINA office in Peenya, but we are unable to meet today. Peenya, in the outskirts of Bangalore, is where the garment factories are concentrated, alongside Hosur Road, Mysore Road and Bomanahalli. She doesn’t ask who else is on the phone or why she is being asked about her Employees’ Provident Fund (EPF). A call from FEDINA, a non-profit supporting informal sector workers, could mean that somebody might help her get the Rs 79,000 accumulated in her EPF till date. She has a loan to repay and has been trying to get hold of her money for the last two years.
While all her documents proclaim her to be Rasathi, her EPF account has her down as L. Rasathi. Perhaps the HR department of her company had submitted her full name for the EPF, in a rare but inconvenient occurrence of diligent documentation. All Rasathi knows is that now her EPF is inaccessible.
It takes four of us—two FEDINA employees, a translator who accompanied me and me—over thirty minutes to piece this together, only to realise we have no grasp of the issue. Along with the name mismatch, there is an issue of not being able to add a nominee to the account and of missing funds. At the end of the call, she sends a photo, probably through a neighbour’s phone, of the error message from her EPF account page online, dated December 2020: “Claim Rejected. Member not contributed remittances up to date. Employer kindly clarify.”
Image by Rudra Rakshit
The EPF contribution consists of a minimum of 12 per cent of the employee’s salary, deducted monthly, and an equivalent amount from the employer. Rasathi’s share should have been automatically withheld from her salary and credited to her EPF account. But the error message indicates that one of her employers never transferred her contribution to her fund. Having worked in four different factories during this period, there are different issues with her EPF account and each to be directed to the respective HR department.
The EPF is supposed to be a savings corpus for the worker. But unlike the pension fund, workers can withdraw their EPF at any point, subject to certain conditions. In April 2016, when the central government proposed to restrict the EPF account holder from withdrawing the employer’s share till they turned fifty-eight years of age, over 15,000 garment workers came together on the streets of Bangalore to protest this. The amendment was quickly retracted.
In an industry unwilling to pay a decent living wage, garment workers rely on frequent withdrawals from their EPF for sudden expenditures such as healthcare, marriage, education or repayment of a loan.
A worker in the garment sector could either be salaried, with EPF and Employee’s State Insurance (ESI), or an informal worker who gets paid per piece, known as piece-rate worker. A salaried worker in the sector takes home between Rs 7,000 to 9,500 depending on the level of “skill”. The struggle for a decent basic income has been a long one. As recently as 2018, after announcing an increase in minimum wages for seventy-three classes of employment, the Karnataka government withdrew the revised wages for the garment sector alone due to pressure from the industry management. “The involvement of employers makes no sense. Because once the minimum wage is fixed it is the duty of the government to ensure the workers get the wage,” said Pratibha, president of Garment and Textile Workers Union, to NewsClick at the time. The wages were not revised despite a court order recommending it be done in six months’ time.
In early 2000s, when the garment industry in Bangalore mushroomed due to tax exemptions, “nobody was paying PF. Minimum wages were violated. ESI was not heard about much at the time,” says Usha Ravikumar at FEDINA, which supports the Karnataka Garment Workers Union (KOOGU). The unionisation in the industry could be traced to tackling these basic issues. Yet, Rasathi says she doesn’t want to approach the unions as they might have “more important” things to deal with. Membership in the unions is also really low, “almost 0 per cent”, says K. Saroja, the general secretary of Garment Labour Union (GLU), one of the three active unions in the state. GLU has a mere 10,000 members out of a sector that has close to 11 lakh workers in the state, according to Saroja.
Image by Rudra Rakshit
Where possible, with a union’s help, it is marginally easier to force the bigger factories (employing more than 100 people) and those with international buyers to follow labour laws. Although organised workers’ actions have earlier led to even shutdown of factories that were lax about meeting these bare minimum requirements, smaller factories slip through the cracks.
The garment industry usually functions as a monopsony model, with a few global buyers and thousands of small, medium and large suppliers that compete with each other. In monopsony markets, manufacturers are always scared of losing a contract to competitors. This fear leads to low profits, little or no investment in machinery and few options for workers to demand anything from the manufacturers. As Ashok Kumar, author of Monopsony Capitalism, shares in an interview with Jacobin, “The result is a ‘race to the bottom’ in which garment and footwear workers have the lowest bargaining power of any industrial sector.”
The “production torture” in garment factories is a well-documented phenomenon. Workers are often forced to quit even under dire financial circumstances because the management and supervisors humiliate workers and treat them harshly if targets are not met. Sexual harassment in garment factory floors is all too common. The worker is often dependent on an uncooperative management to clear the formalities on quitting before they can withdraw their EPF amount.
In 2018, the Narendra Modi–led government implemented digitalisation of all EPF-related transactions as part of its Digital India campaign, which aims to “transform India into a digitally empowered society and knowledge economy”. Rasathi does not have a smartphone. To check her EPF account online, she has to take a bus to the nearest cyber cafe, which would charge her Rs 50 to 100 to assist her with the process. She can’t read, let alone perform any of the digital manoeuvres to access her money.
Rasathi does not have a smartphone. To check her EPF account online, she has to take a bus to the nearest cyber cafe, which would charge her Rs 50 to 100 to assist her with the process. She can’t read, let alone perform any of the digital manoeuvres to access her money.
“Digitalisation reduces accountability and makes the system more opaque. It puts the onus on the worker and removes accountability from the State.”
After digitalisation, “workers are struggling to withdraw their PF”, says Saroja. “Especially the older generation, they don’t have proper documents. Now PF has to be linked to Aadhar. Most workers don’t know their date of birth and often end up having documents with different dates of birth. I am forty-five years old and I don’t know what my actual date of birth is.” Before digitalisation, the worker would get a form filled out by the HR in the company and submit it to the EPF department. “Even when a claim was rejected, the worker could take the form back to the HR and they would help fix it. But since the move to online, employers just give the UIN number and ask the workers to sort it out themselves.” (The Unique Identification Number acts as an account number for the EPF holder.) A rejected application means more visits and money to a cyber cafe to check status, correct the affiliated documents like Aadhar—also through digital applications—and reapplying.
Migrant workers who come from Jharkhand, Orissa, Bihar and West Bengal face even more problems. “If the Aadhar card has an error, then they have to go back to the village to fix it. Many just let go of their EPF funds because it’s too much of a hassle,” says Sachin, originally from Orissa and one of the few workers in the city with a union card, KOOGU’s. Workers might give a neighbour’s or relative’s mobile number when registering for Aadhar. They can’t correct their date of birth as easily, as the one-time password, or OTP, would go to a mobile phone they don’t have.
Digitalisation should have been carried out in phases, says Saroja, with ample notice to everyone to get their documents in order, with digital literacy campaigns and awareness on the need for proper documents. “The government should have guided the worker in the process. They didn’t ask for anyone’s opinion before going ahead with this.” An online EPF account updated properly does allow the worker to check if an employer has been regularly remitting funds to the account. But this advantage is lost to most workers who don’t have digital access and literacy. As a report of the United Nation’s Special Rapporteur on Extreme Poverty and Human Rights in October 2019 states, digital technologies “could also make an immense positive difference in improving the well-being of the less well-off members of society, but this will require deep changes in existing policies … and a genuine commitment to designing the digital welfare state not as a Trojan Horse for neoliberal hostility towards welfare and regulation but as a way to ensure a decent standard of living for everyone in society.”
The State seems to instead take a backseat and let grassroots organisations or unions fill in the last-mile services. If unions and grassroots organisations spend their time filling digital forms, navigating the messy bureaucratic failures and constantly fire-fighting at the level of documentation, it leaves them little time to organise and attend to larger labour issues.
“Digitalisation is designed at the level of the state or the centre. If there is a problem in the system, who do we approach to fix it?” asks Shankar Gopalakrishnan, drawing from his experience of working for the rights of construction workers through Chetna Andolan, a people’s organisation in Uttarakhand. Before, workers could go to the respective departments in their area to file a complaint. But now, to address a bug in the online system “one has to approach a secretary-level official in the government”, which is not so easily achieved. Online systems are also often developed by private players. “Digitalisation reduces accountability and makes the system more opaque. It puts the onus on the worker and removes accountability from the State.” There are deadlines for applying, updating forms, and so on, whereas there is no deadline for the State to act on them. “Before, you dealt with a human. There was space for negotiations. With digitalisation, the government department passes the ball to the IT department, which in turn passes the ball again.”
Echoing this, Srinivas Kodali, a researcher with Free Software Movements in India, says, “Before, you could go to a specific office to present a grievance. With digitalisation, people don’t know where to go in case of a problem.” Having studied the issues with the Aadhar scheme, he says, “It only benefits IT companies in Bangalore.” Kodali questions the State’s motivations behind its digital campaign. “Pre-digitalisation, the employee could check the books. Digitalisation invisibilises the information asymmetry that persists between employee and employer. If the employer submits the wrong data, you are stuck. Navigating the digital State becomes difficult. Digitalisation amplifies the built-in inequality in the system and makes things simple only for those who know how to use technology,” usually the more well-off population.
It also thwarts efforts to organise workers. “There used to be place for negotiations, protest and demonstrations,” says Gopalakrishnan. With all actions having to come down from a more centralised level, protests have to be large-scale for it to catch the attention of officials higher up. “Workers have to give time and take risks to be part of protests. It’s a big deal for unorganised sector workers. They could lose Rs 500 or more in wages” every time they have to join protests. When trying to mount pressure on a state or central authority, “thousands of workers need to gather”, as opposed to a small-scale organised demand focused on local authorities, which was the case pre-digitalisation.
“Perhaps an informal worker is better placed, in that they have more control over their money,” Kodali says. Ravikumar agrees, “Workers feel piece-rate work is better as they can take leave whenever they want.” It reduces the pressure of delivering targets, they are spared the humiliation from supervisors in factory settings and the money is handed to them as and when they deliver. They might get Rs 15,000 to Rs 17,000 a month, without the ESI coverage for health and EPF savings. But they too are at the mercy of contractors. “Sometimes contractors don’t pay. I just filed a police complaint as one of the contractors didn’t pay a month’s wages,” says Sachin, who currently stitches upto 100 men’s underwear in a day. But despite this, he prefers piece-rate work because of the flexibility, more income opportunities and not dealing with a humiliating supervisor.
For salaried garment workers, getting the EPF amount directly in their hands instead of as accumulated savings that can be collected later “will not make much of a difference in being able to cover the rising costs in a city like Bangalore,” says Saroja. “The EPF actually is beneficial as workers have no avenue to save. Whatever money they get in hand, they end up spending just trying to survive.” But digitalisation, employers’ negligence and sometimes downright thievery, and an EPF department that doesn’t ensure that companies meet EPF regulations, has turned this crucial corpus of savings into a nightmare.
“To a greater degree than has often been the case in the past, today’s digital welfare State is often underpinned by the starting assumption that the individual is not a rights-holder but rather an applicant,” says the UN report. Although Rasathi’s son has an undergraduate degree, he too is unable to help his mother. “We are lost in the English-speaking cyber world. The workers are aware of their rights, but that doesn’t matter. Every step of the way the worker is exploited,” she says, breaking down on the phone.
*The worker’s name has been changed to protect her identity.
FEDINA, Munnade and Jan Sahas familiarised me with the history of Bangalore’s garment industry and introduced me to workers in the sector, while Mahima and my colleague Ekta helped with interviews of garment workers in Kannada. This article would not have been possible without their support.
Janani works with Maraa, an arts and media collective, as researcher and writer.