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Apparel brands support repeal of short-term contract law in Peru

March 4, 2013

Six international apparel companies sent an open letter yesterday to the President of Peru supporting a 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.

New Balance, Nike, PVH Corp (owner of the Tommy Hilfiger and Calvin Klein brands), VF Corporation (owner of Wrangler, Lee’s, North Face, Nautica and Timberland brands), 47 Brand, and Life Is Good signed a joint letter urging the Peruvian Government “to demonstrate its strong support for social inclusion and decent working conditions by supporting the repeal of the labor provisions of DL 22342.”

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.

Today, Peru's booming garment and textile industry exports some US$642 million annually in textile products to the US alone. According to Juan-Carlos Vargas of the Peruvian NGO 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.

Addressing Peruvian President Ollanta Humala, the six international apparel companies wrote, “While we celebrate Peru’s success under your leadership, we are also concerned that Decree Law 22342, which allows ‘non-traditional’ exporting companies to employ workers on fixed-term contracts, acts to encourage and condone violations of labor rights and therefore poses an obstacle to the proper application of our codes of conduct.”

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.

The Maquila Solidarity Network has been working with the AFL-CIO Solidarity Center in Peru, IndustriALL and Peruvian garment and textile worker union federations to secure company support for a repeal of Decree 22342.

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