Let’s talk! Social Dialogue helps Asian garment industry navigate the COVID-19 crisis

The global COVID-19 pandemic has cast a long shadow over the global garment industry. Amid plunging consumer demand and mass order cancellations from (mostly) Western brands and retailers, factories and workers across the region have been left to contend with both an economic and public health crisis, one which has shaken the foundations of both the industry and the societies that it supports.

Throughout these challenging times, social dialogue has played a key role in helping companies mitigate the impact of the pandemic and promote resilience of their business operations. Success stories from three enterprises in Cambodia, Indonesia and Bangladesh illustrate how information exchange, consultation and negotiation have helped firms navigate an unprecedented crisis without leaving their workers behind. 

Keeping workers safe
High-end sportswear manufacturer Sabrina Corp became aware of the emerging threat of the COVID-19 pandemic in January 2020. The outbreak in China affected its manufacturing facility and created bottlenecks along the raw material supply chain to its other factories in the region. Despite the shock, the company set a clear priority from day one. “The ultimate goal is for the workers to be healthy and safe”, said Corporate Social Responsibility Director Nicole Chu.

To get ahead of the crisis, the company knew that they needed clear leadership and a coherent message. In Cambodia, Sabrina’s two factories have long prioritized dialogue as a means to encourage a safe and healthy workplace. Working closely with the ILO-IFC Better Work programme, they established Performance Improvement Consultative Committees (PICC), comprising worker and management representatives, to examine and solve labour compliance and improvement issues on the factory floor. As COVID-19 risks grew, Sabrina could take advantage from this existing infrastructure. They called upon the PICC committees to bring unions together in a dialogue with management to share concerns and formulate factory and community responses. 

The discussions led the company to rollout new preventative measures such as mandatory masks onsite, temperature checks and regular workplace disinfection. But most importantly, it led to prompt and efficient engagement in Social Dialogue with workers. As a result, Sabrina established a COVID-19 response committee with all stakeholders represented to assign roles and responsibilities in the factory. 

Chu said by bringing economic and wellbeing priorities together, Sabrina was able to be open with buyers about the real situation on the ground. “This virus crisis is profound. We want to see the business growing, but growing in a healthy way,” she said.

Prioritizing employees’ confidence and trust
Management communicated early on that Sabrina Corp was in a strong financial position and no one needed to worry about losing their jobs. 

Emphasizing both message and messengers
By channeling COVID-19 messages through union leaders and workers, communication with the workforce was made more effective.

Making information accessible
Information was made available for workers through a wide range of measures, while the COVID-19 committee also established a regular schedule for each line/section leader to explain and answer workers’ queries.

Adapting to changing conditions
The company amended the existing Collective Bargaining Agreement (CBA) with workers through their union to cover good practices in relation to COVID-19 prevention.

Protecting jobs in times of uncertainty
In April 2020, PT Wacoal issued a notice that 800 workers were to be dismissed amid upstream disruptions to its raw material supply chain caused by the pandemic. The decision would have far-reaching consequences, as most workers of the Indonesian-owned underwear factory were young women working to support their families. 

Learning of the anticipated layoffs, Elly Silaban, the leader of the Federation of Garment, Handicraft, Textile and Industrial Centers of the Indonesian Labour Union Confederation (FSB-Garteks KSBSI) urged factory union representatives to talk to the employer and work out ways to mitigate the proposed changes. The dialogue helped PT Wacoal reconsider the adverse impacts of layoffs and convinced them to instead pivot into a new area: mask production. While 80 workers still lost their jobs – just 10% of the original plan - the company made a public commitment to reemploy these workers when orders bounced back.

PT Wacoal’s success was not the result of a one-off conversation but rather the fruit of longstanding investments in Social Dialogue that fostered both trust and openness between the factory owner, Suryadi Sasmita and Garteks leader, Elly Siliban. The two have forged a solid working relationship since 2017 when employers and worker representatives came together to negotiate agreements to protect jobs and business continuity through company-level dialogue mechanisms. Siliban showed Suryadi how union representation can help with dispute resolution, negotiations and allow workers and employers to understanding each other's perspectives.

Guaranteeing protection from unprecedented shocks
Ready-made garment workers have faced harsh consequences from the COVID-19 crisis. In Bangladesh, more than a million workers were fired or temporarily suspended as buyers failed to honour orders. But for workers at Hop Lun Apparels, not only could they keep their jobs, they were also guaranteed a pay increase and granted better protection despite the sector facing its most difficult year. 

Taking effect at the time workers needed it the most, the improvement was not a coincidence. Hop Lun Apparels’ 2,000 workers, of which 89 per cent are female formed and registered their union in October 2019. Shortly before the pandemic began in February 2020, they submitted a 24-point charter of demand to the factory’s management. The proposal called for a provision of 10 per cent increment on basic wages after one year of service, double the amount required by law. It also called for other improved conditions for workers relating to maternity protection and paternity leave. 

In June 2020, while the ready-made garment industry was struggling, Hop Lun Apparels agreed with most of the demands and signed a 2-year Collective Bargaining Agreement (CBA), with many provisions and benefits retroactive from January. 

Leading the open negotiation was Hop Lun Manufacturing Group Bangladesh Country Head, Amilthan Suntharalingam and President of the Sommilito Garments Sramik Federation (SGSF) of which the factory union is a member, Nazma Akter. 

“Nazma Akter educated us about what the CBA is and what it means for all the companies,” said Suntharalingam. “It gave us the path to help empower our people, to build trust and respect around our team and our teammates.”

It was not the first time that Hop Lun Apparels and SGSF agreed to a pact to improve working conditions for workers.  The two had already grown trust and understanding from their experience negotiating CBAs in two other factories. 

Suntharalingam said the key was to understand that both employers and employees had a vital role to play in this demanding business. “Listen patiently to the needs of your employees,” he said. “Understand that investing in your employees is an investment in the business. It’s important to invest the time to listen.”