Garment employees going unpaid as fashion labels cancel orders

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A survey of factory owners in Bangladesh discovered that major fashion retailers that are closing shops and laying off workers in Europe and the U.S. are also canceling their sometimes already completed orders, as employees often go unpaid.

A written report released Friday by Mark Anner, director of Pennsylvania State University's Center for Global Workers' Rights, says the coronavirus crisis has led to millions of factory employees, mostly women from rural areas, being sent home without the wages or severance pay they are owed.

About 4.1 million people work in apparel factories in Bangladesh, the world's No. 2 garment exporter after China. The South Asian country is merely beginning to feel the direct impact of the pandemic. But the shocks to its export markets have been cascading into its economy for weeks.

The disruptions from the virus outbreak are straining a fragile supply chain where big buyers have been squeezing their suppliers for a long time. The federal government, having offered huge tax incentives to entice manufacturers and buyers to go to Bangladesh, has scant resources to help protect workers.A lot more than 1 million garment personnel in Bangladesh curently have lost their jobs or have already been furloughed because of order cancellations and the failure of buyers to cover canceled shipments. Nearly 60% of the 316 factories that taken care of immediately the survey by the guts for Global Workers' Rights and the Worker Rights Consortium, a Washington, D.C.-based labor rights organization, said that they had already closed down almost all of their production.

About 6% of factories experienced all orders canceled as a result of outbreak, while practically 46% said they have lost a major share of their orders.

The survey, conducted March 21-25, included practically 200 large suppliers with an increase of than 750 staff that mainly make garments for European markets.

It found almost all buyers refused to contribute to wages for those workers, and a lot more than 70% of those furloughed were sent home without pay. Of the personnel who were fired, less than 20% received severance pay, the survey found.

Anner and other labor authorities say the big fashion retailers are resorting to “force majeure" clauses within their contracts - usually found in case of natural disasters or war - to justify not paying manufacturers which have already payed for fabric and other materials and labor to make the orders. Earlier, suppliers were being penalized for late deliveries caused by difficulties obtaining fabric or other materials due to factory shutdowns and other disruptions due to the virus outbreak that started in the central Chinese city of Wuhan.

Factory owners are unlikely to fight out of fear they could lose future business once the crisis passes.

The virus outbreak "is showing us precisely how extreme that power imbalance is," Anner said. “It's just a complete disaster."

The damage isn't limited by the garments sector. The International Labor Organization has estimated that 25 million jobs could be lost because of the virus outbreak.

Bangladesh, a nation of 160 million, is deploying soldiers and police to enforce a nationwide 10-day shutdown to slow the spread of the coronavirus in the densely populated country. But in an indication of the value of the garment sector, which gives 80% of the country's export earnings, those factories have been deemed an essential industry.

Kalpona Akter, executive director of the Bangladesh Center for Workers Solidarity group, blasted buyers for canceling orders. “The employees are panicked," she told The Associated Press.

“We've a cruel reality here. Simply, they will go hungry, their own families will suffer, their children, their parents are affected for insufficient food, medicine. The global brands will eventually lose a fraction of their profit, the owners will also lose their share, however the personnel will be left without food and medicine,” Akter said.

The Bangladesh Garment Manufacturers and Exporters Association said that by Friday orders worth about $2.7 billion had been canceled or suspended, directly affecting nearly 2 million workers.

In a video message, its president, Rubana Huq, urged global buyers including H&M and Wal-Mart to not cancel orders also to accept those already finished or under production.

“We could have 4.1 million employees literally going hungry if we don’t all step up to a commitment to the welfare of the workers,” Huq said.

“One thing is quite clear, our foremost responsibility was towards our workers. We certainly are a manufacturing country, our reality and your reality is totally different, but it isn't a time to point out differences, it’s a period through which we must work together,” she said.

Bangladesh Prime Minister Sheikh Hasina on Wednesday announced a 50 billion taka (over $600 million) support package for export-oriented manufacturers, mainly apparel makers, to help pay workers. But factory owners say it will only provide about one month's salary.

“We appreciate the announcement of the prime minister. This is an excellent gesture, but I want to say very humbly that it’s very small, really small,” said S.M. Khaled, managing director of Snowtex Group.

Khaled said his main factory, which employs practically 10,000 workers, is still running but may need to stop if more orders are canceled.

“Our buyers are suspending orders, the personnel are confused, the owners are confused, this is really an extremely bad time,” he said.

“We have imported fabrics and other necessary products to make garments. There is an enormous backlog," Khaled said. “How will we survive?” 
Source: https://www.stamfordadvocate.com

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