More than 1,000 workers in a garment factory in India have lost their jobs without warning, after H&M reportedly cancelled their orders amid the coronavirus pandemic.
Sacked workers were still protesting last week outside the Euro Clothing Company factory (ECC-2), owned by Gokaldas Exports, in Srirangapatna, Karnataka, weeks after the factory was shut down.
When the factory closed at 5:30pm on Saturday 6 June, an announcement was reportedly made informing workers that the 1,200 staff members were to be laid off immediately.
The announcement confirmed that the workers would be paid half of their remaining wages and that the factory would no longer be operational, according to The News Minute.
A notice at the factory read: “The management of the company has decided to lay off the workers at Srirangapatna plant with effect from June 8, 2020, in the interest of the plant and also to save the employment of the workmen.”
The notice, from the manager of the factory, said the sudden closure was due to the global effects of the coronavirus pandemic.
“The adverse circumstances prevailing in India, as well as the countries where overseas buyers are located, has resulted in overseas buyers cancelling their orders or withdrawing their orders and there is uncertainty about the market conditions,” it read.
Gokaldas Exports also released a statement, that read: “The lay-off is due to reduction and cancellation of orders from its customers based out of key markets consequent to the Covid-19 pandemic.”
Many of the workers protested the decision on 6 June, and have continued to do so since the factory was closed.
Local trade unions and labour department official, MV Roopa, claimed that the factory was closed without the one month notice period, that is legally mandatory, according to the Telegraph India.
The New Trade Union Initiative said that after some machinery was removed from the factory earlier in the week, officials from the Garment and Textile Workers Union (GATWU), spoke to factory management, but there was no indication that the removal was related to lay-offs.
They spoke to factory management on the morning of 6 June, but were again not made aware of the upcoming closure.
The local trade unions met factory management again on 8 June, to try and resolve the issue and get the workers their full pay.
Ms Roopa told The News Minute: “We held meetings with the officials on Monday but they said that they cited the same reason for laying them off, that is, due to lack of orders in view of the Covid-19 crisis.
“The labour department has now issued a notice to the company against this decision.”
Gokaldas Exports has 20 factories in the area, but the plant in Srirangapatna was the only one that it closed.
The New Trade Union Initiative general secretary Gautam Mody claimed that the factory suddenly shut down after H&M cancelled its orders.
The general secretary wrote: “H&M did not commit to the order status even after being informed by GATWU on 1 June. Even as GATWU sought a meeting with the management, H&M allowed the management to proceed with the factory closure while asking the union to meet with the management.
“During the meeting, the management informed GATWU that payments of old orders were still due.”
Mr Mody added: “H&M is the only MNC (manufacturer) for which ECC-2 has been manufacturing in 2020. In 2019, ECC-2 manufactured almost 90% production for H&M.
“Therefore, H&M was clearly aware that they were reducing orders leading to the shutting down of the factory.”
After a video of the protesters circulated on social media on Monday, H&M said it was attempting to resolve the conflict.
H&M replied to a tweet that criticised the factory closure, and said: “The drop in customer demand due to Covid-19 will inevitably impact suppliers, however we are placing orders with this supplier and we fully stand by our responsible purchasing practices.
“We are in dialogue with the supplier and the trade unions to resolve the conflict peacefully.”
On Tuesday, an H&M spokesperson told The Independent: “Covid-19 has caused an unprecedented situation for the whole industry. The drop in customer demand will inevitably have an impact on production levels, in particular when a country has been in lockdown for a long period, as is the case with India.
“However, at this point, our orders at this specific supplier are on similar levels as during the same period last year. We are also fulfilling our payments for goods in accordance with contracts, on time and at the originally agreed price.”
The spokesperson added: “The supplier wants to lay off workers at one of its units (out of 20 in total) and the conflict between the supplier and the trade unions is about different interpretations of the national law. We are in close dialogue with both parties to help them resolve the conflict peacefully and reach an agreement that is acceptable to both parties.”
The Independent has also contacted the New Trade Union Initiative for comment.
