Nearly 100 apparel factories have closed with 100,000 workers laid off

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Workers of the factories, numbering over 100,000 in total, will still be paid as per section 16(1) of the Bangladesh Labour Act 2013

Near 100 apparel factories have suspended production due to a shortage of work orders during the coronavirus pandemic.

Workers of the factories, numbering over 100,000 in total, will still be paid as per section 16(1) of the Bangladesh Labour Act 2013.

According to section 12 of the Labour Act, 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.

As per section 16(1), 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.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has said about 90 factories suspended production, while about 10 members of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) have also suspended operations.

“So far, 90 apparel factories have suspended production. Approximately 100,000 workers are employed at the factories, and this does not mean they have lost their jobs. They will be paid as per the Bangladesh Labour Act,” BGMEA Director Md Rezwan Selim told Dhaka Tribune.

“Since there are not enough work orders right now and buyers are not placing new orders, the factory owners declared suspensions. When the work orders start coming in again, the factories will resume and workers will join work as usual,” he added.

The BGMEA director continued that this is not just a problem for Bangladesh, as the coronavirus pandemic has frozen economies across the globe.

Meanwhile, the BKMEA fears more suspensions may be coming, as member factories of the knitwear sector are also suffering from a shortage of work orders and an influx of cancellations.

“As of yesterday, about 10 factories spoke to me about suspending production as they are suffering from work order shortages,” BKMEA First Vice President Mohammad Hatem told Dhaka Tribune. 

The number of factories suspending production will increase if the global coronavirus crisis continues for too long, he added. 

According to BGMEA and BKMEA data, global retailers and brands have cancelled nearly $6 billion worth of work orders due to the outbreak of coronavirus.