Covid-19 impact and responses: Bangladesh

Updated on: 13 May, 2020

What is the current situation?

General information

The situation with factory production

  • On 10 April, The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) announced in a joint statement that the readymade garment (RMG) factories would remain closed until 25 April. The statement added, ‘If any factory office remains open to disburse wages and other payments during the period, the factory authorities will have to inform the respective trade bodies and industrial police about this.’
  • Many workers came back to the capital under the assumption that they would return to work on 5 April, only to find out that closure would continue until 12 April. On 7 April, Commerce Minister Tipu Munshi urged factory owners to pay the salary for the month of March to their workers before 16 April. ‘You (owners) can’t fire any workers even though the factories remain closed due to the Covid-19 pandemic in the country,’ he added. Garment workers of at least 11 factories in Savar took to the streets on 12 April demanding wages of the previous month, as some of them had not been paid the previous month’s wages, which are supposed to be paid by 10th day of the month.
  • On 25 April, BGMEA said it will set dates for reopening member factories gradually. ‘Until any direction is received, you (factory owners) are requested not to ask workers to return to Dhaka,’ BGMEA said. BGMEA issued a general directive to the member factories regarding reopening the factories. In the first phase, starting 26 April, factories operations were to start with 30% of the workforce, advising to ask only the workers living near their respective factories to join. In the second phase, on 2 May, based on the success of following health and safety guidelines, factories may invite back an additional 20% of the workforce. 
  • The guidelines advise factories to open using one or more of the following methods:
    • Prioritise workers that live nearby;
    • Those who returned to the villages should be discouraged to return, or not permitted on factory premises until after the second phase
    • Exclude  vulnerable workers, or those most at risk, such as pregnant workers or workers over age 50. The guideline furthermore mentions that factories should consider paid leave for these workers
    • The planning team may decide to prioritise opening the finishing section, sample section or part of sewing initially.
    • The guidelines also detail measures related to social distancing, use of PPEs, sanitation, handwashing, having a medical team and a separate area for to assess and quarantine suspected patients, etc.
  • Following the announcement to allow reopening, local news reported that 1,427 other export-oriented units reopened on 26 April, followed by another 1,820 factories on 27 April. Despite BGMEA’s directive not to ask workers (who are back in their villages) to return to Dhaka, hundreds of garment factory workers left their villages on foot or jammed into whatever vehicle they could get to join work in Dhaka and its outskirts, thereby ignoring the risks of contracting and spreading the coronavirus.
  • Experts and union leaders have expressed concerns. Many workers from different factories in Savar, Ashulia, and Mirpur said the health and safety measures were inadequate and barely anything had changed in the way they worked. A large number of garment factories are not maintaining social distancing as per the health safety guidelines on the working floor and factory entrances, increasing the risk of contracting the coronavirus. The article mentions that ‘a number of factories in Ashuli and Chattagram resumed operation with 70 to 80 percent of their workers.’
  • A BGMEA official said the association had a field-level monitoring system – including surprise visits from zone-wise teams. Referring to Tuesday’s monitoring report, the official said, ‘We have conducted surprise inspections at 27 factories and found 25 of them in a very good condition.’ BKMEA also indicated that it was monitoring the health and safety issues at its member factories.
  • There have been reports of factories where workers were found infected with the coronavirus. Media reported that at least four workers of different readymade garments (RMG) have tested positive with the coronavirus after they resumed working amid the current pandemic situation in Chattogram, Rangpur, Jashore and Pirojpur.
  • Local media reported protests over closed factories and inadequate safety measures – some of which turned violent – in different areas. Several hundred readymade garment workers staged a demonstration for reopening their factory in Chittagong.  Further, ‘some workers at Savar and Ashulia saw that other factories had opened but their ones remain closed, which scared them about their jobs,’ said Sirajul Islam Rony, president of the Bangladesh National Garment Workers Employees League.
  • Several factories have laid off workers, citing that orders from international buyers were cancelled. Layoffs were based on provisions 12 and 16 of the labour law (see also below). Workers will get half of their basic payment and house rent during the layoff period, according to the law. According to local media, BGMEA said the factories that have no work because of the pandemic are within their rights to temporarily shutter as per provisions in the labour law. Amirul Haque Amin, president of National Garment Workers Federation, retorted that ‘laying off a worker during such a critical moment is illegal and unjust. The reason being, workers will not get their full remuneration, but 53 percent of their gross salary.’

What are the government policies to support local businesses?

  • On 25 March, Prime Minister Sheikh Hasina announced a bailout/stimulus package of Tk 5,000 crore (equivalent of 530 million EUR) for export-oriented industries to mitigate the impact of the coronavirus on the country’s economy. The premier indicated that the money from the package could only be disbursed in the form of salaries and wages for employees and workers of those industries.
  • On 1 April 2020, the finance ministry unveiled the guidelines for disbursement of the Tk 5,000 crore stimulus package. Businesses can avail of funds from the package at 2% interest to pay their workers’ salaries for up to three months. The salaries must be paid to either a bank or mobile financial service account. Management of export-oriented companies or factories have to provide salary sheets, workers’ lists and their mobile banking accounts to banks so that salaries for April can be directly disbursed. The banks, afterwards, will forward the same documents to Bangladesh Bank for reimbursement. The borrowers will get a six month grace period, meaning that they will start paying back the borrowed money in instalments to the government from the seventh month of receiving the money.
  • Garment workers’ salary disbursement from the stimulus package started as of 3 May. Salaries of affected workers of factories that applied and qualify for support under the Tk5,000 crore stimulus package will be disbursed directly to the workers’ accounts by the government.  Following a tripartite meeting between government, worker representatives and RMG industry owners, the state minister for labour said, ‘RMG workers who did not work in April will get 60 percent of their salary for this month before Eid. Those who worked in factories that remained open amid shutdown in April will get 100 percent salary. Besides that, those who resumed work from April 26 will get 60 percent of their wages for the previous 25 days, and full wages for the last five days of this month.’ The salaries for April will be sent through mobile financial services directly to the RMG workers’ accounts.
  • On 5 April, the Prime Minister announced four fresh financial stimulus packages of Tk 67,750 crore. The PM said the government simultaneously developed four programmes under the plan, to be implemented in phases categorised as Immediate, Short and Long. The four programmes are: increasing public expenditure, formulating a stimulus package, widening social safety net coverage and increasing monetary supply.
  • HSBC Bangladesh announced a set of measures to help its textile and garments clients tide over the economic fallout from the coronavirus pandemic. The bank will provide special short-term loans of up to one year, with principal moratorium for four months, which can be used for the purpose of supporting payroll bills and utility payments. The bank will also allow three months’ moratorium against the existing term loans enjoyed by businesses belonging to the textile and garments sector, according to a press release issued by HSBC Bangladesh. During the moratorium period, clients will not be required to pay any instalments, and the lender will also not seek any amount of repayment from them. The Bangladesh Bank has asked banks to extend similar support to businesses.
  • On 25 March, the Bangladesh government sought $1 billion in support from the International Monetary Fund and the World Bank as the country looks to support its people, businesses and industries reeling from the pandemic. Source: https://www.thedailystar.net/business/news/govt-seeks-1b-imf-wb-1886107

What are the government policies and regulations to protect employees – the workers?

  • The aforementioned bailout/stimulus package of Tk 5,000 crore (equivalent of EUR 5.3 billion) for export-oriented industries is to be disbursed in the form of salaries and wages for employees and workers of the industries.
  • The bailout/stimulus package aside, when factories are forced to close for a certain period in the event of a catastrophe, below legal provisions, sections 12 and 16 of the Bangladesh Labour Act 2006 in particular may become of relevance.

Section 12: (Bangladesh Labor Act 2006) Stoppage of work

  1. The employer may, at any time, in the event of fire, catastrophe, breakdown of machinery, or stoppage of power supply, epidemics, civil commotion or any other cause beyond his control, stop any section or sections of the establishment, wholly or partly for such period as the cause for such stoppage continues to exist.
  2. In the event of such stoppage occurring at any time beyond working hours, the employer shall notify the workers affected, by notice posted on the notice board in the section or department concerned or at a conspicuous place in such establishment before the work is due to begin next.
  3. In the notice mentioned in sub-section (2) direction shall be given indication as to when the work will be resumed and whether such workers are to remain at their place of work at any time before the actual resumption.
  4. In the event of such stoppage occurring at any time during working hours, the workers affected shall be notified, as soon as practicable, in the manner specified in sub-section (2) indicating as to when the work will be resumed and whether such workers are to leave or remain at their place of work.
  5. In the case where workers have been directed to stay at their place of work following such stoppage, the workers so detained may not be paid for the period of such detention if it does not exceed one hour, and the workers so detained shall be paid wages for the whole period of such detention if it exceeds one hour.
  6. If the period of stoppage of work does not exceed one working day, a worker, unless entitled to wages under sub-section (5), may not be paid any wages.
  7. If the period of stoppage of work continues for more than a working day, a worker affected, other than a casual or badli worker, shall be paid wages for day or day by which it will exceed one working day.
  8. If the period of stoppage of work extends beyond three working days, the workers may be laid- off in accordance with the provisions of section 16.
  9. A lay-off mentioned in sub-section (8) shall be effective from the day of stoppage of work and any wage paid to a worker for the first three days may be adjusted against the compensation payable for such subsequent layoff.
  10. For the piece-rate workers affected, their average daily earning in the previous month shall be taken to be the daily wage for the purpose of the sub-section.

Definition: (Lviii) ‘lay-off means the failure, refusal or inability of an employer on account of shortage of coal, power or raw material or the accumulation of stock or the break-down of machinery to give employment to a worker;

Section 16: (Bangladesh Labor Act 2006) Right of laid-off workers to compensation

  1. Whenever a worker, other than a badli or casual worker, whose name is borne on the muster-rolls of an establishment and who has completed not less than one year of continuous service under the employer is laid-off, he shall be paid compensation by the employer for all days during which he is so laid-off, except for such weekly holidays as may intervene.
  2. The amount of compensation as mentioned in sub-section (1) shall be equal to half of the total of the basic wages and dearness allowance, and ad-hoc or interim pay, if any, and the full amount of housing allowance, if any, that would have been payable to him had he not been so laid-off.
  3. A badli worker whose name is borne on the muster-rolls of an establishment shall cease to be regarded as ‘badli’ for the purpose of this section, if he has completed one year of continuous service in the establishment.
  4. No worker shall, unless there is an agreement to the contrary between the worker and the employer, be entitled to the payment of compensation under this section for more than forty-five days during any calendar year.
  5. Notwithstanding anything contained in sub-section (4), if during a calendar year a worker is laid-off for more than forty-five days, whether continuously or intermittently, and the lay off after the expiry of the first forty-five days comprises period or periods of fifteen days or more, the  worker shall, unless there is an agreement to the contrary between the worker and the employer, be paid compensation for all the days comprised in every subsequent period of lay-off for fifteen days or more.
  6. The amount of compensation as mentioned in sub-section (5) shall be equal to one-fourth of the total of the basic wages and dearness allowance, and ad-hoc or interim pay, if any, and the full amount of housing allowance, if any.
  7. In any case where, during a calendar year, a worker is to be laid off after the first forty-five days as aforesaid, for any continuous period of fifteen days or more, the employer may, instead of laying- off such a worker, retrench him under section 20.

What are local stakeholders doing to lobby their government?

The Industriall website mentions the appeal of the IndustriALL Bangladesh Council (IBC) to the Government of Bangladesh:

  1. All the factories including the ready-made garments have to be closed down with due payments to the workers until the situation improves.
  2. No workers can be terminated or retrenched under this disastrous situation.
  3. Special measures and treatment have to be ensured if any workers fall ill or are attacked by the virus, including taking necessary steps to ensure good health and security for all workers.
  4. Rationing for the workers has to be ensured in this difficult time.
  5. No factories can be closed/laid off without paying the worker’s dues.
  6. In any emergency situation the government has to ensure cash money assistance to the workers.
  7. A tripartite (government, BGMEA employers’ group and IBC) monitoring taskforce has to be established under the leadership of the Labour Ministry.
  8. Brands and buyers are urged not to cancel their work orders.

The Centre for Policy Dialogue (CPD) in Bangladesh advocated for the following:

  • Suppliers should discuss with their brands/retailers about possible cooperation in order to share revenue losses incurred for cancellation/deferment/withdrawal of orders
  • Scope to share the losses of business enterprises (partially/fully) with buyers/brands/retailers
  • Minimum support to maintain day-to-day expenses; support for retaining the staffs and workers and rationing support facilities for contractual workers
  • Export-oriented sectors, such as the RMG sector, needs cash flow support to retain workers, deferment of LC payment, deferment of import LC receipt, interest payment support to banks, low cost credit support from development partners.
  • Reschedule loans on case by case basis for exporters: Bangladesh Bank can provide guidelines to commercial banks in view of this to address loan repayment difficulties.

What are local organisations doing to support and protect the workers?

  • Awaj Foundation indicated that it is seeking donations for an emergency fund for workers who have lost their jobs. This will mainly be in the form of cash disbursements to make sure that their basic needs for food and shelter are met. Awaj Foundation indicated that it will also continue to provide some health services and will connect workers with other resources when they need more intensive help.
  • Following concerns over shortage of personal protective equipment (PPE) for doctors and nurses, five organidations — Pay It Forward Bangladesh, Honest, Buet Alumni Association, Rotary Club Dhaka North-west and Manush Manusher Jonno Foundation approached Marks & Spencer with a request to produce 400,000 suits for doctors and nurses.

What have been the responses and requests of business associations to support the industry?

  • The BGMEA is continuously monitoring the situation in garment factories. According to the BGMEA website. To date (13 April), 1136 factories reported that it has lost USD$3.15 billion in cancelled/postponed orders, equivalent to 976 million pieces. A staggering 2.26 million workers are affected thus far. 
  • BGMEA President Dr. Rubana Huq released a video message in which she urged international apparel buyers to come forward to support the apparel industry of Bangladesh during this hard time.
  • Reported in several media outlets, BGMEA President Dr. Rubana Huq has also written to the German Federal Minister for Economic Cooperation and Development Dr. Gerd Müller, urging him to kindly immediately call for all their brands sourcing from Bangladesh to not cancel or hold any shipments up.

What are international brands doing to support suppliers and protect workers?

  • In response to urgent appeals, a number of brands including H&M, PVH, Inditex, Marks & Spencer came forward with assurances to help garment suppliers by taking the shipment of goods that have already been manufactured or ordered. However, media reports have also come out saying that brands have decided to temporarily suspend placing new orders.
  • A Research Brief from the Center for Global Workers’ Rights of Pennstate University in Association with the Worker Rights Consortium, drawing from responses from an online survey of Bangladesh employers, reported that more than half of Bangladesh suppliers have had the bulk of their in-process, or already completed, production cancelled. This was also reported in several media.

Relevant links for more information

Bangladesh Labor Act 2006
BGMEA Factory Opening Guidelines
Ministry of Health and Family Welfare: Hygiene and safety guidelines to ensure hygiene of garment factories