4/11/2020 Covid-19 impact and responses: Bangladesh – Fair Wear

Covid-19: Guidance for production countries Fair Wear's Covid-19 Dossier

Covid-19 impact and responses: Bangladesh

Covid-19 impact and responses:

Bangladesh
Updated on: 7 April, 2020

What is the current situation?

General information

According to the World Health Organization, Bangladesh has 123 con rmed infections
to date and 12 people have died from the coronavirus.
Cookies
On 26 March, the government rst introduced a 10 day shutdown until 4 April. On 1
April, the government announced that the shutdown would be extended until 11 April.
We use
On cookies to provide
5 April 2020, you with the
the government bestextended
again experience
theofongoing
our website. Read
‘general morefor
holiday’ about
our cookie
another regulatons here.
three days, until April 14. Public transport services will be suspended during
this extended period, even though restrictions on the movement of various modes of
FAIR ENOUGH
public transport, including train and bus services as well as rickshaw vans, will be
relaxed in phases. Hospitals, kitchen markets, drug stores and other emergency
DON’T USE COOKIES

https://www.fairwear.org/covid-19-dossier/covid-19-guidance-for-production-countries/covid-19-impact-and-responses-bangladesh/ 1/9
4/11/2020 Covid-19 impact and responses: Bangladesh – Fair Wear

services, however, will remain open.  Pharmaceutical and export-oriented industries

may be kept open if required, it further said.
The government has repeatedly been asking people to stay home in efforts to contain
the spread of the virus. But soon after the 24 March announcement, people started
leaving the capital for their village homes in droves. Several local media outlets
reported that hundreds of city dwellers boarded buses and trains to head back home,
fuelling fears of further spread of the virus throughout the country.
On 1 April 2020, the government cancelled all public programmes marking Pahela
Baishakh, the Bengali New Year, to avoid mass gatherings as part of its efforts to
contain the spread of the novel coronavirus. The Bengali New Year 1427 will begin on
April 14.

The situation with factory production

In the national address of the Prime Minister on 25 March, no measures were

announced related to closure of factories.  The decision on whether to keep factories
open or running has been delegated to the respective industry associations.
Following the decision of the government to close all public and private o ces and
public transport until 11 April, the BGMEA and BKMEA suggested all factories shut
down until 11 April.
According to BGMEA, approximately 1082 factories reported 933 million pieces worth
USD$2.95 billion export orders were cancelled and held up by global buyers to date (1
April). BGMEA o cials said that many other manufacturers were yet to report to the
trade body about the issue and that the exact gure of cancelled or delayed orders
would be higher than USD$3 billion. Citing BGMEA data, the Associated Press reported
that USD$1.8 billion in orders had been put on hold and another USD$1.4 billion had
been cancelled. It said that cancellations of planned orders, for April-December,
amounted to nearly USD$1.7 billion.
A Research Brief from the Center for Global Workers’ Rights of Pennstate University,
Cookies
in Association with the Worker Rights Consortium, drawing from responses from an
online survey of Bangladesh employers, reported that more than half of Bangladesh
We use cookies to provide you with the best experience of our website. Read more about
suppliers have had the bulk of their in-process, or already completed, production
our cookie regulatons here.
cancelled. This was also reported by several media outlets.
Many factories announced layoffs at their units according to the provisions of 12 and
FAIR ENOUGH
16 under labour law (see also below). Workers will get half of their basic payment and
house rent during the layoff period, according
DON’T USE to the law.
COOKIES

https://www.fairwear.org/covid-19-dossier/covid-19-guidance-for-production-countries/covid-19-impact-and-responses-bangladesh/ 2/9
4/11/2020 Covid-19 impact and responses: Bangladesh – Fair Wear

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 EUR 5.3 billion) 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 5 April, the Prime Minister announced four fresh nancial 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.
On 1 April 2020, the nance 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 nancial 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.
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,
Cookies
according to a press release issued by HSBC Bangladesh. During the moratorium
We use cookies
period, to provide
clients will notyou with the to
be required best
payexperience of our website.
any instalments, Read more
and the lender about
will also not
our cookie regulatons
seek any amount ofhere.
repayment from them. The Bangladesh Bank has asked banks to
extend similar support to businesses.
FAIR ENOUGH
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
DON’T USE COOKIES

https://www.fairwear.org/covid-19-dossier/covid-19-guidance-for-production-countries/covid-19-impact-and-responses-bangladesh/ 3/9
4/11/2020 Covid-19 impact and responses: Bangladesh – Fair Wear

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 re, 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 noti ed, as soon as practicable, in the manner speci ed 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.
Cookies
5 In the case where workers have been directed to stay at their place of work following
such
We use stoppage,
cookies the workers
to provide so the
you with detained may not beof
best experience paid
ourfor the period
website. Readofmore
suchabout
detention
our cookie if it does
regulatons not exceed one hour, and the workers so detained shall be paid
here.
wages for the whole period of such detention if it exceeds one hour.
6 If the period of stoppage of workFAIR doesENOUGH
not exceed one working day, a worker, unless
entitled to wages under sub-section (5), may not be paid any wages.
7 DON’T
If the period of stoppage of work USE COOKIES
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
https://www.fairwear.org/covid-19-dossier/covid-19-guidance-for-production-countries/covid-19-impact-and-responses-bangladesh/ 4/9
4/11/2020 Covid-19 impact and responses: Bangladesh – Fair Wear

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 rst 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.

De nition: (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- ve days during any calendar year.
Cookies
5 Notwithstanding anything contained in sub-section (4), if during a calendar year a
We use
worker
cookies
is laid-off
to provide
for more
you with
thanthe
forty-
bestve
experience
days, whether
of our
continuously
website. Read
or more about
our cookie regulatons
intermittently, andhere.
the lay off after the expiry of the rst forty- ve days comprises
period or periods of fteen days or more, the  worker shall, unless there is an
agreement to the contrary between FAIRthe worker and the employer, be paid
ENOUGH

compensation for all the days comprised in every subsequent period of lay-off for
DON’T USE COOKIES
fteen days or more.

https://www.fairwear.org/covid-19-dossier/covid-19-guidance-for-production-countries/covid-19-impact-and-responses-bangladesh/ 5/9
4/11/2020 Covid-19 impact and responses: Bangladesh – Fair Wear

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 rst forty-
ve days as aforesaid, for any continuous period of fteen 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 di cult 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
Cookies
orders
Scope
We use to share
cookies the losses
to provide of business
you with the bestenterprises
experience(partially/fully)
of our website.with
Read more about
buyers/brands/retailers
our cookie regulatons here.
Minimum support to maintain day-to-day expenses; support for retaining the staffs
and workers and rationing support facilities
FAIR ENOUGH for contractual workers
Export-oriented sectors, such as the RMG sector, needs cash ow support to retain
DON’T USE
workers, deferment of LC payment, COOKIES
deferment of import LC receipt, interest payment

https://www.fairwear.org/covid-19-dossier/covid-19-guidance-for-production-countries/covid-19-impact-and-responses-bangladesh/ 6/9
4/11/2020 Covid-19 impact and responses: Bangladesh – Fair Wear

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 di culties.

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, ve 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 (1 April), 1082 factories reported that it has lost
USD$2.95 billion in cancelled/postponed orders, equivalent to 933 million pieces. A
staggering 2.14 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
Cookies
Müller, urging him to kindly immediately call for all their brands sourcing from
Bangladesh to not cancel or hold any shipments up.
We use cookies to provide you with the best experience of our website. Read more about
our
Whatcookie
areregulatons here. brands doing to support suppliers and protect
international
workers?
FAIR ENOUGH
In response to urgent appeals, a number of brands including H&M, PVH, Inditex, Marks
& Spencer came forward withDON’T
assurances to help garment suppliers by taking the
USE COOKIES

shipment of goods that have already been manufactured or ordered. However, media
https://www.fairwear.org/covid-19-dossier/covid-19-guidance-for-production-countries/covid-19-impact-and-responses-bangladesh/ 7/9
4/11/2020 Covid-19 impact and responses: Bangladesh – Fair Wear

reports have also come out saying that brands have decided to temporarily suspend
placing new orders.

Relevant links for more information

Bangladesh Labor Act 2006

Ready to take action for a fairer garment

industry?

JOIN THE MOVEMENT

Together, we're making clothing fair for everyone

FIND A BR AND

OUR IMPACT
Cookies
ABOUT US
We use cookies to provide you with the best experience of our website. Read more about
our cookie regulatons here. JOIN THE MOVEMENT

FAIR ENOUGH
How we deal with privacy
DON’T USE COOKIES

https://www.fairwear.org/covid-19-dossier/covid-19-guidance-for-production-countries/covid-19-impact-and-responses-bangladesh/ 8/9
4/11/2020 Covid-19 impact and responses: Bangladesh – Fair Wear

Cookies

We use cookies to provide you with the best experience of our website. Read more about
our cookie regulatons here.

FAIR ENOUGH

DON’T USE COOKIES

https://www.fairwear.org/covid-19-dossier/covid-19-guidance-for-production-countries/covid-19-impact-and-responses-bangladesh/ 9/9