The Financial Express

46 units seek support from RMG Central Fund

'Most applicants fail to meet criteria'

| Updated: May 19, 2020 11:15:45

AP file photo AP file photo

Some 46 garment factories have sought financial support from the RMG Central Fund to pay wages for March to their workers, officials said.

Expressing their inability to pay, the factories filed applications to labour ministry, seeking allocation from the fund, they added.

The factories registered with Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said the ongoing coronavirus pandemic has eaten up their work orders, making them unable to pay wages.

The ministry officials, however, said the factories applied for allocation are not eligible for fund as a majority of them are running their operations.

RMG Central Fund director general AMM Anisul Awwal said, "We've placed the issue to a committee comprising representatives from government, factory owners, labour leaders and BGMEA to scrutinise the factories' present status."

The committee held a meeting on Sunday but did not make any decision, he said, adding that most applicants did not meet the criteria to get support from the fund.

According to labour rules, if a factory is closed permanently or destroyed by any disaster or if an owner becomes bankrupt or if a unit is relocated, it will be entitled for allocation from the fund to pay wages.

Ministry sources said none of the factories has permanently closed or relocated while almost all of the factories are doing business.

So, they might not get allocation from the contingency account of the fund for workers' wages, they added.

The factories first need to decide on closure for their inability to run in order to get financial support.

The committee will investigate whether the owners were financially incapable to run their units and pay wages accordingly.

If the committee finds that the factories are unable to run their business, it will assess the property and liability of the company, the sources cited.

Later, it will recommend the Central Fund to allocate partial or full amount for paying wages, they said.

The government has been collecting money at a rate of 0.03 per cent from each RMG export receipts from July 01, 2016 for the fund.

According to the labour rules 2015, export-oriented factories will contribute 0.03 per cent of their freight on board price to the fund.

The contributions from the government and buyers to the fund are voluntary.

There are two bank accounts for the fund-beneficiary account and contingency account-and the money is deposited equally in two accounts.

Grants for workers or their family members are taken from beneficiary account, according to the rules.

The amount deposited in contingency account is used to meet dues of workers of any closed factory if its owner is unable to pay the workers.

Earlier in April, the Central Fund rejected a BGMEA plea for a Tk 500-million loan to pay wages for March.

It argued that the rules allow no loan from the fund to pay wages to workers for any operational factory, the ministry sources said.

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