Most RMG units ignore layoff rules: CPD

Staff Correspondent

24 January, 2021 12:00 AM printer

Some 3.57 lakh RMG workers lost jobs during the pandemic, curtailing the average number of workers in factories by 10.8 per cent in the last 10 months, finds a new study carried out by Centre for Policy Dialogue (CPD).

Unveiled on Saturday, the study report says most of the apparel factories did not follow the layoff rules during the pandemic.

“Only 3.6 per cent of factories complied with the compensation principle – paid salary, outstanding and compensation – and about 70 per cent of factories paid salary only,” CPD’s research director Dr Khondaker Golam Moazzem said while presenting the study highlights.

Non-compliance was much higher in factories located in Narayanganj and large factories, he added.

CPD organized a webinar called “Vulnerability, Resilience and Recovery in the RMG Sector in view of Covid-19 Pandemic: Findings from the Field Survey.” BRAC University’s Centre for Entrepreneurship Development also assisted CPD for the study.

Some 232 factories were closed during the Covid-19 period which is about 6.9 per cent of total factories, including 188 members of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

Only 40 per cent of small factories applied for loans from the stimulus package, while around 58 per cent of enterprises did not apply because of complicated procedures, according to the study.

For the study, CPD surveyed 610 samples from 3,211 listed enterprises during October-November of 2020 in four major industrial clusters – Dhaka, Gazipur, Narayanganj and Chattogram.

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

The survey suggests that the government’s stimulus package covered the demand of 70 per cent enterprises. And the rest of the enterprises that were left out of the package were mostly small and non-member factories.

 “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 suggested.

He said the resilience and recovery of the apparel factories will largely 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, he added.

Factories need to diversify their sources of industrial raw materials and enhance their ability to maintain key functions.

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, the study suggests. .

“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,” Dr Moazzem also suggested.