Legal Dimensions of Subcontracting Labour in the Indian Fast Fashion Industry


Labour is subcontracted from developed countries to developing countries by transnational retailers and manufacturers such as Zara and H&M as a practice in order to benefit from cheap labour and absolve themselves from legal liabilities. The pervasiveness of this practice in the fast fashion industry causes poor working conditions in the global supply chain. The garment industry’s informal nature adds fuel to it and leaves a huge fraction of the unorganized workforce outside the protection of legal reforms and social security.


Subcontracting Labour, Fast fashion, Garment workers


“It is we who ploughed the prairies,
built the cities where they trade,
Dug the mines and built the workshops,
endless miles of railroad laid,
Now we stand outcast and starving, ‘mid
the wonders we have made....”

- Ralph Chaplin

The Wall Street Journal reports that globally on average, an individual is said to purchase 68 garments in a year and discard the same after usage up to 7 times. Large retail brands such as Zara and H&M follow the practice of launching fashion collections quarterly. However, in order to meet the ever-changing tastes of consumers, this practice has been undergoing dynamic shifts and the fast fashion model has emerged. The fast fashion industry can be understood as an industry where, in response to the changing and recent trends of fashion, affordable clothes are mass produced by retailer brands. Other than the obvious adverse environmental impact of this practice in the form of wastewater and greenhouse gas emissions such frequent mass production of clothes is also responsible for the exploitation of labour. The development of globalised trade led to the practice of manufacturing in one region while assembling in another region by outsourcing processes which require manual labour. The exploitation of such manual labour is routed through the strategic practice of subcontracting labour followed in the manufacturing process of garments. This practice is rampant in developing countries in South Asia 1 , India being one of them. The garment industry in India falls under the ambit of the newly instituted Code on Social Security 2020 , Code on Wages 2019 , Code on Occupational Safety, Health and Working Conditions 2020 , and the Industrial Relations Code 2020 . However, the law fails to turn to the workers’ advantage due to the industry’s largely informal nature. This article will be discussing the development of the fast fashion phenomenon with relevant incidents. Further, subcontracting labour as a consequence will be discussed from the perspective of relevant domestic labour law while concluding with suggestive measures.

Advent of the Fast fashion Revolution

The phenomenon of fast fashion was introduced by Amancio Ortega Gaona with the companies Zara and Inditex (Industria de Diseno Textil) in the 1960s in Galicia, Spain. This business model, initiated by the above-mentioned companies, was later copied in a widespread manner by various companies such as GAP and Target. These high-street brands have been accused of having a supply chain that is tainted with forced labour 2 . There have been numerous incidents in the past to substantiate this claim which call attention to the poor labour conditions of ready-made garment workers. A more recent reference is the use of forced labour of Uighur people from the Xinjiang region in China to produce cotton which is used by top-end brands such as H&M and Adidas. Undoubtedly, one such incident is the tragic collapse of the Rana Plaza Building in Dhaka (Bangladesh), which resulted in the death of 1,132 people and injuries to several. The owner of the building had an approval for only five storeys but built three additional storeys on top without permission which was said to be one of the reasons for collapse 3 . On the day of the collapse, workers were forced to continue working even after issuance of an evacuation order due to visible cracks in the building indicating lack of concern towards worker safety. It was the same building where brands such as Primark, Benetton, and Mango had their manufacturing units . As a reaction to this incident, the Fashion Revolution Week was started as a movement. They launched the hashtag #WhoMadeMyClothes to spread awareness surrounding the issue of working conditions of labour in the fashion industry’s supply chain and to hold the industry accountable. Due to such dreadful incidents and consequent advocacy, consumers worldwide are seen to be more aware and conscious of their purchases. This is evidenced by the recent uproar on social media with respect to the collaboration between the India designer Sabyasachi Mukherjee and infamous fast fashion brand H&M. Netizens questioned why the former who is known for ethical fashion and honouring craftsmanship by using Indian textiles would join hands with the latter who has been periodically accused of violating labour policies and mismanagement in its supply chain.

Dyed-in-the-wool Menace of Subcontracting Labour

It is pertinent here to understand what mismanagement in the supply chain through subcontracting labour means. A fashion brand such as H&M outsources its production to a contractor. A contractor in relation to an establishment means a person who undertakes to produce a given result for the establishment, other than a mere supply of goods or articles of manufacture to such establishment, through contract labour or who supplies contract labour for any work of the establishment and includes a subcontractor 4 . Such a contractor then further subcontracts to another agency. It basically means that the subcontractor fulfils the requirements under the original contract between the employer i.e. H&M in this case, and the contractor. The subcontractor in such a case is said to be manufacturing for the contractor and not the original employing fashion company. Here, the fashion company is deemed to be the ‘principal employer’ meaning the head of the concerned department or who is responsible for the overall supervision like an owner in the case of a factory or mine 5 . Hence, in theory, the fashion company is responsible for the overall functioning and supervision of its manufacturing, but in practice there is no direct link in the supply chain between the employing fashion company and the garment workers due to such a subcontracting network. Subcontracted work thus flows from the formal to informal sector having direct implications on the working conditions of the garment workers. These subcontracting networks are found widely in the international circuit where the retailers act as coordinators to these supply chains. Questions about a clean and transparent supply chain are thwarted by the principal employers, i.e., the fashion companies by holding up the defence of being unaware of such subcontracting.

The Code on Wages 2019 includes four important legislations like the Minimum Wages Act 1948; the Occupational Safety, Health and Working Conditions Code 2020 subsumes thirteen labour laws relating to safety, health, and working conditions like Contract Labour (Regulation and Abolition) Act 1970; Code on Social Security 2020 includes nine acts and lastly, the Industrial Relations Code 2020 subsumes three labour laws relating to industrial relations, the Industrial Disputes Act 1947 being one of them. When looking at subcontracting in the Indian market, the Act that majorly regulates the business is the Contract Labour Regulation and Abolition Act 1970 where workmen employed as “contract labour” by or through a contractor, with or without the knowledge of the principal employer are protected. Here, the contractor is seen as the one who supplies the labour while the employer is the one who is actually responsible for the organisation of the work setup. The Act demands the mandatory registration of relevant establishments along with the liabilities of the principal employers to provide amenities such as canteens, restrooms, and safe drinking water for the welfare and health of contract labourers employed by them.

The said Act has been amended by the Government time and again in order to plug any loopholes. One such example is that of the Gujarat State Amendment wherein the applicability of the Act was changed to establishments and contractors which employ 50or more workmen on any day of the preceding twelve months as contract labour which previously was applicable to establishments employing 20 or more workmen. The intention behind it was to provide increased opportunity for employment as well as facilitate easy compliance by the establishments as it was observed that lower limit, i.e., 20 or more workmen lead to non-compliance and restricts engagement of labour. In addition, the Contract Labour Act also makes sure that there are labour-friendly provisions which shall guarantee minimum wages and other social security measures like provision of canteens, first-aid, and rest rooms for the health and welfare of contract workers 6. Additionally, there are penal consequences under the Act, including imprisonment for up to 3 months and fine of up to One Hundred rupees for every day of contravention continued after conviction for the first such contravention 7. In spite of a law present to advocate the cause of labour welfare, the state of its implementation to meet decent working conditions in the garment industry is saddening.


The crux of all the demands made by advocacy groups and labour unions is to make the fashion companies and retailers accountable for complying to set labour standards in India not just as a moral obligation but as a legal compliance in order to ensure a clean supply chain. It shall be made mandatory for these companies to ensure good working conditions of the labour employed by them at the factories as well as the subcontracted units. Their role shall be proactive wherein they take conscious steps to be aware of where and how exactly their products are being made 8. Thus, an easy and logical solution could be by inventing the concept of joint liability of the fashion company and retailers in the supply chain. One way would be that the contractors’ duty to provide beneficial entitlements such as restrooms and canteens to the garment workers employed by them should also be imposed on the retailers and fashion companies. Another way would be that the companies can comprehensively declare verifiable information through their annual reports regarding steps taken by them to tackle the issue of fair living wages and workplace dialogue in the supply chain. Such publication of information can also be made a requirement in law. 9

Collusion and corruption of implementing officers-in-charge can be dealt with through schemes to reward them for proper implementation of law and advancing the welfare of garment workers. This has been seen to be successfully implemented in the case of the income tax department, where officers who have nabbed tax invaders are feted through reward money and public ceremonies. Some research studies have also gestured at the role of buyer practices as one of the top contributors to the violation of the rights of garment workers. This can be illustrated by the loyal customer base of the Chinese retailer Shein which is famous for design plagiarism, problems in their supply chain, and causing damage to the environment with production of cheap disposable clothing.

In conclusion it can be said that the remedies to the problems caused by subcontracting of labour are primarily centred on firstly scrutinizing the failure of the State in the enforcement of labour regulations or its inadequacy; secondly on the incompetency of management at the factory level; and lastly at the uninformed buyer practices who should transition to buying ethical and sustainable clothing. However, with the increase in awareness among the workers backed by the law and campaigning there is seen to be a slow departure from the set model of non-compliance to deserving standards of work towards a movement acknowledging worker rights.

About Author

Ms. Shivani

1 Fashion Revolution Singapore and Oxford Development Consultancy, South East Asia Fashion Sustainability Report 2021 para 2
2 Blum Center for Developing Economies, Tainted Garments (University of California, Berkeley 2019) p. 6
3 ‘Rags in the ruins’ The Economist (Dhaka, 4 May 2013) para 2
4 Contract Labour (Regulation and Abolition) Act, 1970, s 2 (c)
5 Contract Labour (Regulation and Abolition) Act, 1970, s 2 (g)
6 Mark Anner and Jennifer Bair and Jeremy Blasi, 'Toward Joint Liability in Global Supply Chains: Addressing the Root Causes of Labor Violations in International Subcontracting Networks” (2013) 35 Comp Lab L & Pol'y J 1
7 Contract Labour (Regulation and Abolition) Act, 1970, s 23
8 Martje Theuws, Pauline Overeem, ‘Time for Transparency’ (SOMO & ICN, March 2013) accessed 20 January 2021
9 See also: ‘Wages’ (H&M Group) accessed 20 January 2021.