Workers unrest hurts productivity at three Star Garments factories

Worker unrest has threatened the productivity of three factories belonging to Star Garments, Katunayake – a leading apparel manufacturer in Sri Lanka.

The agitation campaign was launched by 1,000 employees demanding a salary hike of 1,000 rupees to counter the rising cost of living.

Their strike which began on July 2 was called off earlier this week after the management signed a Memorandum of Understanding with representatives of the employees and the Labour Commissioner.

A representative of Star Garments workers told The Sunday Times FT that they decided to call off the strike as the management has agreed to grant their demand and they have been promised to pay a sum of Rs 500 wage hike initially. He added that all workers at these three factories had reported for work and a few of them who participated at the picket line in Colombo had been victimized. The harassment of employees who participated in the strike is still being continuing, he said. Five workers have been interdicted without conducting a disciplinary inquiry, he added. Trade Unions have argued that some companies violate internationally accepted wage rates, overtime hours, unfair dismissal of workers and do not allow trade unions to be formed at the free trade zone. The Katunayake Free Trade Zone apparel sector trade union has been agitating for a minimum monthly wage of Rs 10,000 for workers to face the escalating cost of living.

However, the managements of apparel factories say they are already paying a sum of Rs 7,000 which is well over the present minimum wage of 5,000 rupees. Managing Director of Star Garments. A. Sukumaran told The Sunday Times FT that the value of apparel exports had dipped by 5 to 7 percent during the first half of this year compared to the same period last year and the company is providing every concession to its employees despite its financial constraints. He noted that employees should understand this reality and cooperate with the management to face this situation.

Referring to the recent work stoppage Sukumaran said that 90 percent of the work at Star Garment factories at Katunayake has been normalized and some misunderstanding among the workers is natural after a strike. However he accepted the fact that their production of 800,000 pieces per month had been affected to a certain extent by the strike.

He disclosed that there was no reduction in the apparel orders received by his company for the US market but prices have dipped on average by around 10 percent since quotas were lifted in December 2004. But he added that Sri Lanka has duty free access into Europe for its garments that it is counting on this to cushion it against competition.

Star Garments is a well established BOI company which has been a pioneer investor in Sri Lanka with its first plant being set up in 1978 in the BOI’s Katunayake Export Processing Zone. It is owned by Multinational USA and has a presence in New York, Hong Kong, London and China. It is not just a major manufacturer of garments but also a key employer with a staff of 10,000 workers in seven factories in Katunayake, Kadduwela, Baddegama, Koggala and Kotmale across Sri Lanka.