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Short-term contracts undermine the rights of Peruvian garment workers

April 18, 2012

On March 20-21, representatives of national and international unions and labour rights organizations, major apparel brands, multi-stakeholder initiatives, the labour ministry, and local suppliers met in Lima, Peru to discuss how short-term employment contacts impact on workers' rights in the country's garment and textile industry.

The forum, "Decent Work in the Garment and Textile Sector in Peru," was convened by the AFL-CIO Solidarity Center, the International Textile, Garment and Leather Workers' Federation (ITLGWF), the Maquila Solidarity Network, and the Peruvian NGO PLADES.

Above: Union leaders from Peruvian manufacturer Topy Top address the forum

The two national trade union federations representing workers in the sector, the FNTP and the FNTTP, used the occasion to highlight a growing campaign for the repeal of three articles of a decades-old law allowing employers in the garment and textile export sector to hire workers on consecutive short-term employment contracts, thereby denying them job security, seniority rights and other benefits, access to health and pension coverage, and their right to organize and bargain collectively.

The law, Decree 22342, establishes a special regime allowing  companies that export "non-traditional products" to employ workers on short-term contracts - typically for six months, but often for three months and sometimes for as little as one month - to work on specific export orders.

According to ITGLWF Regional Secretary Laura Carter, "the Decree, which was introduced over three decades ago as a temporary measure to assist fledgling companies in an irregular industry, today protects the interests of the largest and most profitable companies in what has become a booming export industry. As a result, average wages in one of the most successful sectors are among the lowest in the country."

Today, Peru's booming garment and textile industry exports some US$750 million annually in textile products to the US alone. According to Juan-Carlos Vargas of PLADES, the use of short-term employment contracts has grown exponentially since the signing of free trade agreements with the US and Canada. Using statistics available from the Ministry of Labour, Vargas confirmed that the vast majority of Peru's largest companies in the sector are contracting 80 to 100 percent of their workforce on short-term contracts.

The International Labour Organization (ILO) has repeatedly asked the government of Peru to amend this law. During his 2011 election campaign, President Ollanta Humala promised to abolish the decree, yet there has been no concrete action since his election, and employers continue to speak out against repealing the law.

In her closing remarks, Samantha Tate, Andean Region Director for the AFL-CIO Solidarity Center, said, "In Peru it is almost unheard of to bring together in one room representatives of industry, government, brands, unions and other labour rights advocates. This meeting has been precedent-setting; so let's make sure to build upon the ground we've laid over the last two days."

Peruvian and international unions and labour rights NGOs met following the forum to formalize a comprehensive set of proposals directed to government, employers and international brands calling for the repeal of articles 32, 33 and 34 of Decree 22342, a full and transparent review of all short-term contracts aimed at eliminating the unjustified use of such contracts, a commitment that all workers on short-term contracts receive the same salary and benefits as permanent workers, and public disclosure by brands of their Peruvian suppliers.

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