RMG units take stimulus, yet 25% shed jobs

About 25% readymade garment (RMG) factories have sacked workers despite receiving government's stimulus packages to support continuing jobs during the ongoing Covid-19 pandemic, says a study.

The government had announced allocating some Tk5,000 crore stimulus package for the RMG sector to make up the losses inflicted by the deadly pandemic that appeared on the global stage at the very beginning of 2020, spreading all over the world within months and affecting all the countries across the globe.

According to the study of the Centre for Policy Dialogue (CPD), the RMG factory owners 'took the inhuman decision of sacking their workers' amidst the pandemic, even after enjoying the stimulus package, announced by the prime minister last year after the beginning of the pandemic in the country, for export-oriented industries to fight the impact of coronavirus on the country's economy.

The study findings mentioned that the stimulus package failed to guarantee the protection of jobs of RMG workers as many of the factory owners terminated workers despite enjoying the stimulus fund.

The survey mentioned that in the case of lay off and recruitment, the workers are still deprived of their basic rights, with only 41% factory owners claiming that they had cleared all the due arrears of workers during lay off or retrenchment.

The findings were disseminated at a dialogue on Saturday, jointly organised by CPD and Shojag Coalition, a coalition of three non-governmental organisations: BLAST, Christian Aid, and Naripokkho.

However, garment owners claimed that they received the stimulus package as loans, but distributed the money as salary of workers.

If workers of any factory were terminated without due arrears, it might have happened before factory owners received the stimulus package loans, the study quoted factory owners as saying.

The CPD research also mentioned that it was a major violation of conditions of the stimulus packages which was ignored by the Department of Inspection for Factories and Establishments (DIFE), the monitoring authority over distribution and usage of the stimulus fund.

The Think-tank also alleged that the labour and employment ministry, Bangladesh Bank and factory owners' organisations, BGMEA and BKMEA, have responsibilities in this regard as they were involved in scrutinising and finalising the list of workers.

Dr Khondaker Golam Moazzem, Research Director of CPD, made the keynote presentation of the study styled 'Corporate Accountability of the RMG sector in view of Covid Pandemic: Challenges in Ensuring Workers' Well-being'. 

The study also finds that the workers can hardly challenge the decision of their termination even if it seems unfair or illegal to them. However, about 69% of employers claimed they notified workers about such decisions.

About 70% and 40% of garment owners claimed they informed Workers Participatory Committees (WPCs) or trade unions and DIFE respectively well before termination of workers.

The study also mentioned that such a perception does not match the official data of lay-off/retrenchment issues announced by DIFE with that in different survey-based studies.

On March 25, 2020, the government announced a stimulus package of Tk5,000 crore for the export-oriented industries which was increased twice with another Tk3,000 crore and Tk2,500 crore.

Only the apparel exporters received Tk10,500 crore from this fund to pay their workers' wages and festival allowances for April, May and June of 2020 which were disbursed directly to workers' MFS accounts.

According to the circular, the central bank has provided the loans of Tk5,000 crore without interest as per the demand of banks, but banks can take 2% one-time service charge for bearing their administrative cost. The next two phases stimulus of Tk5,500 crore carried only 4% interest.

The loan was initially supposed to be repaid within two years with six months' moratorium facility. Later, at the request of the owners, the moratorium facility was extended for another six months.

If anyone cannot pay the loan installment in time, the loan will become classified as per the conventional rules and 2% interest will have to be paid on the outstanding installments, according to the BB circular.

Addressing as the chief guest of the event, Commerce Minister Tipu Munshi opined that it is the duty of the owners to ensure that workers receive their due arrears.

The minister, however, also stated that owners are also not being paid like before in the international market. The global brands should pay reasonable prices, he added.

BGMEA President Faruque Hassan said the BGMEA's arbitration cell is very active and he will work to implement the recommendation of sharing more information on the arbitration settlement process.

The BGMEA president mentioned that they always welcome social dialogues to ensure social accountability. It was suggested that some detailed presentation and discussion of the study could be done with BGMEA and BKMEA.

Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) First Vice-President Mohammad Hatem said about 800 BKMEA member factories were running that time. Of them, 519 factories got clearance certificates from BKMEA and 99 factories do not allow for the stimulus loans.  

Only 420 got loans from the government announced stimulus, he added.

Hatem also mentioned that if any workers faced terminations he/she must receive benefits as per the labour law.

Barrister Sara Hossain, Executive Director Bangladesh Legal Aid and Services Trust (BLAST) said brands were not taking responsible initiatives during the pandemic to protect workers. She also mentioned that the existing laws have such provision to make them responsible for that.

She also mentioned that a number of factories have received stimulus loans that are not eligible for stimulus packages as those terminated their workers.

It should be evaluated by the BGMEA, BKMEA and Bangladesh as per existing law, she added.

While making the keynote presentation, Dr Khondaker Golam Moazzem, Research Director, CPD stated that a large section of enterprises which are small and non-members of BGMEA but engaged in the RMG value chain needs to be brought on-board to practice corporate accountability. This includes dimensions of governance, labour law compliance, freedom of expression and disclosure practices. There are differences of opinion between employers and workers with regard to the extent of practice of corporate governance at the enterprise level. This is particularly observed in work pressure and workplace harassment during the pandemic period. In cases necessary, workers often could not challenge the decisions taken by the management.

Kalpona Akter, Executive Director, Bangladesh Center for Workers' Solidarity (BCWS) said that the Bangladesh Manufacturers and Exporters Association (BGMEA) should share more information on the arbitration settlement process.

Professor Mustafizur Rahman, Distinguished Fellow, CPD chaired the session. He emphasised strengthening social dialogue to reduce the gaps between employers, workers and concerned government offices.

Pankaj Kumar, Country Director, Christian Aid Bangladesh delivered the vote of thanks and appreciated participants for attending such a broad-based discussion and extended important suggestions for improvement of corporate accountability in the garments sector.

The dialogue was participated in by business leaders, civil society members, researchers, representatives of different workers' organisations and media professionals.