OECD Forum | FLA Side Session: Protecting Workers during Factory Closures and Worker Retrenchment: Best Practice and Lessons from Central America

The Fair Labor Association will lead a panel with union representatives from El Salvador and Honduras and international brands to discuss appropriate due diligence for brands in addressing labor risks for workers during factory retrenchments and closures. The apparel and footwear industry is witnessing a disruption in demand due to the economic fallout from the coronavirus outbreak and the current global economic slowdown, putting jobs worldwide at risk. Apparel and footwear companies are restructuring their supply chains as they deal with oversupply and a decline or cancellation in orders from brands. This has resulted in closures, mass layoffs, suspended employment, and reduced working hours for apparel workers. This downturn threatens the gains made in recent years on decent work. Over the last few years, hundreds of thousands of workers in the industry have lost their jobs, often in countries where there are weak social protection systems, few alternative job opportunities, and often without receiving their legally owed severance.