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Apparel brands challenge short-term contracting in Peru

June 19, 2013

A March 6 open letter from six international apparel companies has created a lively public debate in Peru regarding proposals to repeal three articles of a decades-old “emergency” law allows employers in the garment and textile export sector to hire workers on consecutive short-term employment contracts.

Legal Decree 22342 has been used by employers to deny workers job security, seniority rights and other benefits, access to health and pension coverage, and their right to organize and bargain collectively.

The joint letter signed by 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 calls on 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.” MSN worked with the companies to develop the letter.

The Fair Labor Association also submitted a letter to the Peruvian government supporting the repeal of the provisions allowing consecutive short-term contracts.

One of the country’s main newspapers, La Republica, praised the joint letter in an editorial, calling it “a powerful demonstration of the ethical principles that international companies are now developing as a result of their CSR policies.”

The editorial went on to state that Peru’s export labour regime “impedes the exercise of freedom of association and maintains tens of thousands of women and men in short-term contracts even though their work is permanent in nature.”

Industry counter-attacks

Within a few days of the letter’s release, Peru’s Association of Exporters (ADEX) went on the attack, declaring that Peruvian manufacturers comply with all labour standards and provide decent work, and charging that it was “inappropriate for representatives of these companies to interfere in the internal politics of Peru.”

That declaration was followed by a letter to the president from ADEX and five other industry associations, including the American Chamber of Commerce in Peru, arguing that the right to hire workers on consecutive short-term contracts is essential to create employment in Peru and accusing US unions of coordinating the brand letter to undermine Peru’s competitiveness.

The industry association letter was followed by public comments from Peru’s Minister of Foreign Trade and Tourism, José Luis Silva (not coincidentally, the former head of ADEX) parroting the industry’s line word for word.

Support for repeal grows

Congressperson Javier Diez Canseco Cisneros responded in his own editorial calling Silva a “liar” and noting that the Ministry of Labour’s own technical review had concluded that the law impacts negatively on the right to freedom of association. He charged  that the law “serves only to defend the privileges of a small segment of the textile sector that includes the most profitable companies in the country.”

Peruvian union federations FNTTP (Federacion Nacional de Trabajadores Textiles de Peru), CGTP (Confederacion General de Trabajadores del Peru) and  FTTP (Federacion de Trabajadores en Tejidos de Peru) are continuing to pressure Congress to repeal the short-term contracting regime in this session.

According to the union federations, the letter “represents a huge support for the workers in their struggle to repeal an unjust special labour regime.”

As we go to press, however, the movement to repeal the law is still facing an uphill battle.

The Peruvian Minister of Labour told the media that due to the economic crisis it is not the appropriate time to change the short-term contracting regime, signalling that the fight is far from over.

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