397 RMG factories laid off, ineligible for Tk5,000cr fund

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Factories that employ nearly 10 lakh workers and employees were laid off in line with the Bangladesh Labor Act-2013, and none of the staffers was fired

As many as 397 apparel factories have suspended their production due to lack of orders from foreign buyers during the coronavirus pandemic, according to the latest data of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

The factories that employ nearly 10 lakh workers and employees were laid off in line with the Bangladesh Labor Act-2013, and none of the staffers was fired.

The tally of the laid off factories was based on data from March 26 to Monday, a top BGMEA leader said.

The export-oriented apparel factories are located in Dhaka, Narayanganj, Gazipur and Savar.

Meanwhile, a notice of the finance ministry, issued on Sunday, categorically said the laid off garment units would not be eligible for a Tk5,000 crore fund meant for workers’ wages of the clothing factories.

The Finance Division under the finance ministry sent the notice to Bangladesh Bank, as the fund will be channel from central bank to scheduled banks.

According to the section 12 of the labour law, an employer may, at any time, if necessary in the event of fire, sudden catastrophe or epidemics, stop any section or sections of his establishment, wholly or partly, for such period as the cause for such stoppage continues to exist.

If the stoppage lasts more than three days, workers have to be paid under section 16 (1) of the Labor Act.

Workers are entitled to 50% of basic wages and the full amount of housing allowance in the first 45 days of the suspension period. After the first 45 days, workers are entitled to 25% of basic wages and the full amount of housing allowance, stipulates the section.

“As of today (Monday), 397 RMG factory owners have declared lay-offs due to the coronavirus pandemic. But lay- offs do not mean the factories are closed down and workers fired. They will be paid as per the Bangladesh Labour Act,” BGMEA Director Md Rezwan Selim told Dhaka Tribune. 

When there were work orders and situation improved, workers would join their works, added Rezwan.

The situation was not in the hands of factory owners as the pandemic was the global problem, he said. Most of the export destinations had been hard hit by the coronavirus, he added.

According to BGMEA and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) data, global retailers and brands have canceled nearly $6 billion worth of work orders due to the outbreak of coronavirus.

Meanwhile, trade union leaders claimed that garment owners were firing workers in the name of lay- offs, depriving them of their legitimate benefits. 

“Typically, job duration of 20% to 25% workers in the apparel sector is below one year. If the factory is laid off as per the law, they will lose jobs without any benefits,” said Salauddin Shwapon, President, Bangladesh Revolutionary Garments Workers Federation.

As per the law, if a worker’s job duration in a factory is less than one year, s/he will not be eligible for any compensation in case of lay off.

Meanwhile, 14 clothing factories belonging to the BGMEA have closed their operations from March 26 to April 20 due to the impact of coronavirus outbreak.