A good number of garment workers might be terminated from their jobs this month as the factories are running at 55 percent capacity at present, owing to the fallout from Covid-19 pandemic, BGMEA President Rubana Huq said today.
The jobs and work order situation in the RMG sector might turn even grimmer in future as it is not clear what will happen in the coming months of July and August, she said.
The factory managements must follow the labour law strictly in case of termination of workers, she said.
Many factories are facing either closure or termination of a massive number of workers as the international retailers and brands have already cancelled work orders worth $3.15 billion, Huq said.
About 90 percent factories have experienced the work order cancellation and buyers of only 26 percent of the cancelled orders confirmed taking back the goods and specified the payment terms for renegotiation with them, according to Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
Although most of the remaining buyers confirmed to take back the goods, they did not set any specific time and payment terms while some of the buyers have not responded to the calls of the suppliers yet, Huq said.
Rubana Huq revealed this while addressing a virtual meeting on the inauguration of coronavirus test lab for garment workers.
Citing a report of the McKinsey and Company, Huq said the global consumption of goods, especially clothing items, declined by 65 percent because of the pandemic.
It is perceived that the consumption of clothing items will not improve immediately after improvement of business environment, she said.
Huq said BGMEA will take the responsibility of those workers who were terminated in April and May because the government has given them financial stimulus package.
Once the situation with inflow of work orders and production improves at the factory level, the managements will re-employ the terminated workers on priority basis.
In case the situation with inflow of work orders improves significantly, then no worker may get terminated at all.
Bangladesh has so far exported garment items worth $24.47 billion between July and April of the 2019-20 FY and two more months are yet to be calculated in the current fiscal.
The garment sector has faced $5 billion equivalent impact due to the pandemic and this loss is irrecoverable, Rubana Huq said.
Huq, however, expressed hope that the shipment of goods may turn positive ahead of next Christmas.
Moreover, the US slashed clothing purchase from China by 52 percent, and may consider Bangladesh as an alternative destination for them, she said.
The BGMEA president stressed that Bangladesh needs to divert its production base from five basic items.
Also, online marketplace being a new reality worldwide, Bangladesh needs to sell goods online to grab market share, she said.
Huq also suggested the government for taking an unemployment scheme for the retrenched workers.
So far, the EU and Germany assured that they will grant 113 million euros for the retrenched workers in the RMG sector of Bangladesh.
Mentioning that some 46 factories could not pay 18,000 workers their salary for April yet, Rubana Huq said the BGMEA has been negotiating with buyers with the help of international organisation for payment.
Payment worth $134 million cannot be negotiated yet since some buyers have already applied for bankruptcy in Europe and America, she said, adding that it is very difficult to negotiate with bankrupt companies.
"The buyers are not interested to take responsibility. Even we rarely get them to hold meeting online," she said.
"We have paid $546 million as non-productive wage in April and May," she added.
BGMEA INAUGURATES PCR LABS IN CHANDRA, TONGI AND N'GANJ
The BGMEA today inaugurated its Polymerase Chain Reaction (PCR) labs at Chandra, Tongi and at Narayanganj to run coronavirus tests of garment workers.
The labs, inaugurated via a zoom video conference, were set up in collaboration with Diabetic Association of Bangladesh (BADAS).
The Chandra lab is the first of these state-of-the-art labs and can now test 180 samples every day while the capacity will be further increased over time, BGMEA said.
A total of 264 garment workers have been infected with coronavirus. The factory owners have taken the responsibility of treatment for the infected workers, Rubana Huq said during the inauguration.
Health and Family Welfare Minister Zahid Maleque, Commerce Minister Tipu Munshi, Dhaka North City Corporation (DNCC) Mayor Atiqul Islam, and Salman F Rahman, adviser to the prime minister on private industry and investment, spoke during the inauguration of the labs through video conference among others.