Financial Times

Garment industry on war footing
At least 150,000 workers may lose jobs from MFA phase out
By Feizal Samath
The Board of Investment (BOI), in an effort to prevent major job losses from the MFA phase out, is considering permitting sub-contracting arrangements for export garments manufacturers in FTZs, a concession not permitted at present.

L.R. Wijeweera, a senior BOI official, said this could help smaller factories - likely to be forced out of business due to the end to textile quotas - survive and workers there retaining their jobs, in undertaking contracts from bigger factories sometimes unable to cope with orders at hand. "There is no final decision on this. It is still a proposal."

Asked whether this would also include relaxing the sale of FTZ garments to the domestic markets, Wijeweera said no decision has been taken on this. Last year the BOI relaxed restrictions on domestic sales of export garments to 20 percent from 10 percent earlier of total production of a garment export manufacturer.

More than 100,000 jobs are likely to be lost in a crisis that would mostly affect small and medium scale factories.

Ajith Dias, a top industry official representing JAAF (Joint Apparel Association Forum), said that according to some estimates, 90,000 Sri Lankan workers in garment factories in the Middle East would also return home due to closures.

Last week trade unions and garment manufacturers met in Colombo at an ILO-sponsored meeting to discuss ways of tackling the impending crisis and minimising its impact.

However deep divisions between the key stakeholders on ways of handling the issue were clearly evident from the MFA discourse.

Veteran trade union leader Leslie Devendra hit back at comments by Dias that instead of focusing on compensation and statutory payments' to workers, the priority should be for stakeholders to work together to ensure jobs are not lost. "We need to focus on this while putting the industry on a war footing," Dias urged.

Devendra argued that more than 90 percent of the factories don't even encourage trade unions. "Now when there is a crisis they (employers) want our cooperation," he said adding that if unions had been permitted, both sides could have discussed ways of handling this situation. He said while at forums like this meeting, there is cooperation between unions and employers at the ground (factory) level it's a different story with workers afraid or ignorant of these issues.

That led seminar moderator Shyamali Ranaraja to steer the discussion saying, "this shows the sharply differing views" while stressing the need to find common ground on an issue that affects both workers and employers.

Intervening in the matter, Mahinda Gammampila, Secretary to the Ministry of Labour Relations and Foreign Employment, said even Labour Department officials are sometimes unwelcome in factories but agreed that the time has come for consensus and not confrontation.

The Labour secretary, while acknowledging efforts of the employers in preparing for the crisis, stressed that statutory payments must be met in the case of job losses. He said there were many cases where factories have shut down with no notice to workers and the government and without paying EPF and ETF dues. "When factories close, the workers are left with nothing," he said adding that some common strategies are required to meet compensation and statutory payments without default. A taskforce with representation from the government, employers, trade unions and workers was set up to tackle the crisis.

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