Most RMG factories ignored layoff rules amid pandemic

Most of the apparel factories did not follow the layoff rules amid the pandemic and around 3.57 lakh ready-made garment (RMG) workers lost jobs during this time.

The average number of workers in factories fell 10.8% in 10 months,” Centre for Policy Dialogue (CPD) Research Director Dr Khondaker Golam Moazzem said on Saturday.

He was delivering the keynote presentation at the webinar “Vulnerability, Resilience and Recovery in the RMG Sector in view of Covid Pandemic: Findings from the Field Survey” organised by CPD and Mapped in Bangladesh of Brac University’s Centre for Entrepreneurship Development.

Dr Moazzem said only 3.6% of factories complied with the compensation principle – paid salary, outstanding and compensation – and about 70% of factories paid salary only.

Non-compliance was much higher in factories located in Narayangonj and large size factories.

“About 232 factories were closed during the Covid-19 period which is about 6.9% of total factories. Of these, 188 were Bangladesh Garment Manufacturers and Exporters Association (BGMEA) member factories. Only 40% of small factories applied for the stimulus package.”

Dr Moazzem said they surveyed 610 samples from 3,211 listed enterprises conducted during October-November of 2020 in four major industrial clusters – Dhaka, Gazipur, Narayangonj and Chattogram.

“The enterprises said they had faced a financial crisis during April-May of 2020 following the pandemic. About 50% of factories did not provide wages through a bank account or mobile financial services. Around 59.5% of factories recruited new workers during the Covid-19 period.”

He said the government’s stimulus package covered the demand of 70% of enterprises. And the rest of the enterprises that were left out of the package were mostly small and non-member factories.

Around 58% of enterprises did not apply because of complicated procedures.

“The BGMEA and Department of Inspection for Factories and Establishments (DIFE) should take special measures and launch awareness programmes. The DIFE needs to ensure that the factories follow the official wages and focus on recruiting old workers, not below their earlier status.”

Dr Moazzem said the resilience and recovery of the apparel factories will depend on proper planning and development of robustness, resources and recovery related issues.

Associations should encourage diversifying their buyers and suppliers base by including not only large scale buyers and brands but also small scale buyers and brands.

“The factories need to diversify their sources of industrial raw materials and enhance their ability to maintain key functions. The BGMEA and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) should cooperate to identify the real number of laid-off workers in full and submit a list for making necessary payment under social safety net,” Moazzem said.

“The database of BGMEA and BKMEA should be improved. Unemployment insurance needs to be introduced. Special development programme needs to be designed for factories including technological

up-gradation, management improvement, financial management improvement, buyers’ networking, online-based IT investment,” he added.