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Report

30 Mar 2020

Author:
Center for Global Workers’ Rights & Worker Rights Consortium

Bangladesh: Survey of garment factories reveals a million workers fired or temporarily suspended without pay or severance, as retailers cancel orders & refuse to pay for goods produced amid pandemic

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"ABANDONED? THE IMPACT OF COVID-19 ON WORKERS AND BUSINESSES AT THE BOTTOM OF GLOBAL GARMENT SUPPLY CHAINS", 27 March 2020

...  As clothing outlets have been shut by lockdowns... brands and retailers have moved quickly to cancel or postpone production orders... As a result, millions of factory workers have been sent home, often without legally-mandated pay or severance... This Research Brief draws from responses from an online survey of Bangladesh employers...

Since the coronavirus pandemic took hold, more than half of Bangladesh suppliers have had the bulk of their... production canceled... despite the fact that buyers have a contractual obligations to pay for these orders. But many are making dubious use of general force majeure clauses to justify their violations of the terms of the contract...

When orders were cancelled, 72.1% of buyers refused to pay for raw materials... already purchased by the supplier, and 91.3% of buyers refused to pay for the cutmake-trim cost... As a result of order cancellations and lack of payment, 58% of factories surveyed report having to shutdown most or all of their operations...

More than one million garment workers in Bangladesh already have been fired or furloughed (temporarily suspended from work) as a result of order cancellations and the failure of buyers to pay for these cancellations. Suppliers... reported that 98.1% of buyers refused to contribute to the cost of paying the partial wages to furloughed workers that the law requires...

[Bestseller, C&A, Inditex, JCPenney, Kiabi, Kohls, LPP, Marks & Spencer, Mothercare, Primark, Target, Tesco, VF and Walmart are named as the buyers with the highest value of cancelled and postponed orders in the Appendix chart. H&M and PVH are major buyers of Bangladesh garments. They are not included in the chart because they have agreed to pay suppliers for in-production orders.]

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