A global severance fund, partly paid by brands, should be established to protect garment workers in the countries of the global supply chain that often lack adequate social protection systems, according to a new report.
Social protections in Bangladesh, Cambodia and Pakistan are the weakest among the 14 surveyed garment producing countries.
The report - 'Security for Apparel Workers: Alternative Models' - also opined that the pandemic has brought to light the precarious work environment that the garment workers have faced for decades.
Researchers at Cornell University's School of Industrial and Labor Relations (ILR School) were commissioned to carry out the study by the global union IndustriALL that represents apparel workers - after millions of garment workers lost pay and jobs during the COVID-19 pandemic.
According to a report of the Worker Rights Consortium, garment workers globally lost US$11.85 billion in income in the first thirteen months of the coronavirus pandemic.
The ILR report examined the social protections in 14 garment manufacturing countries that included Bangladesh, Cambodia, China, Honduras, India, Indonesia, Italy, Jordan, Mexico, Pakistan, Poland, Sri Lanka, Turkey and Vietnam, which in 2020 made up more than four-fifths of the US and European Union (EU) apparel imports.
It found that all of these had some form of either severance provisions or unemployment provisions, but the workers were rarely able to benefit from both, and typically there were loopholes in the legislation.
Severance promises to workers by fashion brands via their codes of conduct were routinely unenforced, and cancellations of orders - including completed orders - by many fashion brands in the early months of the COVID-19 crisis left suppliers unable to pay garment workers, the report said.
"Five major garment-producing countries - Bangladesh, Cambodia, Indonesia, Sri Lanka and Pakistan - do not provide statutory unemployment benefits," read the report.
These five countries account for 15.4 per cent of the US apparel and footwear imports, 21.1 per cent of apparel and footwear imports of the EU, and 12.8 per cent of global apparel and footwear exports.
Explaining the loopholes in legislation, it said the formula of 15 days' pay for every year of service - common to many countries - leaves workers with only one or two years' employment at a severe disadvantage.
Second concern that allows employers to avoid severance payments to migrant workers, those without direct contracts or employed by labour agencies.
The third loophole is lack of clear requirements and remedy for workers, denied severance payments in cases of bankruptcy or closures of factories, as witnessed during the COVID crisis, according to the report.
In practice, apparel and footwear factory audit data indicate high levels of non-compliance with severance requirements.
Regarding Bangladesh, the report said the ILO's Better Work Programme found that in 2019, fully 28 per cent of the member factories did not pay severance for termination or did not pay the correct amounts.
Of the 14 countries, only seven countries have unemployment insurance, though all have severance pay provisions.
Bangladesh, Cambodia, Sri Lanka and Pakistan have no unemployment insurance system. Indonesia passed an Omnibus Bill that includes a lump sum 'unemployment' payment equivalent to six months' wages from a government-funded unemployment social security insurance fund.
Workers in Mexico are not entitled to statutory unemployment insurance, but individuals with five years of contribution may withdraw the lesser of 90 days' wages or 11 per cent of the balance from their retirement account early.
Citing social protection experts, interviewed for this paper, the report noted that in the countries with only severance or only unemployment provision, employers tend to treat those not as a matched pair but as interchangeable, and they are generally resistant to paying for the other.
Employers feel as though adding (or improving) unemployment provisions, for example, where they are already legally obligated to pay severance is 'paying the same bill twice'.
The authors in the report recommended a global severance fund be established with money provided as a result of an agreement between global unions and global brands, a governing body be established for unions, suppliers and fashion brands with seats for national governments, a financial institution and NGOs.
It also suggested setting up national bodies to monitor the process, improve social security systems, educate workers about the fund, and help disburse funds, as well as an inspection function that allows unions across dozens of countries, supported by the global fund, to verify compliance with the agreement.
They also suggested four 'must haves' for such a system to work - that included leading global brands to pay into the fund, brand accountability for responsible purchasing practices including fair prices and paying for orders that are in process or have been completed, long-term commitments by buyers to suppliers and global companies to ensure workers have a voice and the ability for collective bargaining.
Munni_fe@yahoo.com