Bangladesh begins paying jute workers retrenched in mill closure amid pandemic

The government has begun paying off labourers of the state-owned jute mills which were shut down for returning losses by settling the payment of 1,759 workers of Dhaka's Karim Jute Mills.

Textiles and Jute Minister Golam Dastagir Gazi kicked off the initiative by handing savings certificates to 30 workers at a ceremony organised by Bangladesh Jute Mills Corporation or BJMC at Demra's Karim Jute Mills on Tuesday afternoon.

According to an announcement made earlier, half of the compensation will be given in cash and the rest in the form of savings certificates.

It was announced in the ceremony that authorities had paid a total of Tk 1.92 billion to 1,759 workers, Tk 343.7 million to 612 retired workers, Tk 251.1 million to 2,625 transferred workers, amounting to Tk 2.51 billion in payouts to Karim Jute Mills workers.

Textiles and Jute Minister Golam Dastagir Gazi inaugurates a programme at Demra’s Karim Jute Mill to settle the final payment of workers on Sep 15, 2020, following the decision to shut loss-making factories under BJMC. Photo: Mahmud Zaman Ovi

The BJMC announced that the labourers had already received their salaries for the month of July and August in accordance with the Labour Act, 2006 which stipulates the payment be made in case a notice is not issued two months prior to job termination.

A total of 26 jute mills under the BJMC have been bleeding for decades, turning profits in just four of the last 44 years.

The move to shut down the mills will also send about 25,000 workers at 26 jute mills into early retirement once their pay is settled under a scheme, euphemistically called a golden handshake.

The compensation was initially proposed to be paid off to workers of these mills in three fiscal years. It amounted to Tk 50 billion, including Tk 40 billion in dues for 24,609 permanent workers and Tk 10 billion in gratuity, provident fund and holiday allowances of 10,107 workers who retired after 2013.

But considering the coronavirus crisis, Prime Minister Sheikh Hasina had decided to pay off the dues in the current fiscal year to provide respite to the workers.

Hasina said the government would revamp these mills using modern technology under public-private partnership arrangements within six months and re-engage those being sent to retirement in the upgraded plants.

The government has formed two high-level committees to recommend the proper utilisation of the jute mills and BJMC assets, draw up strategies and reform the BJMC's organisational infrastructure.

It held several meetings to decide whether to go for Public Private Partnership or Government-to-Government arrangements for the reopening of the jute mills, said Dastagir.

Most of the people who run mills are thinking about a lease system, the minister said.

The government also prefers the lease system, he said.

“We need to modernise the mills by replacing 60-year-old machines with new ones for more production and profit with less electricity,” he added.

It was announced in the ceremony that the BJMC had sent accounts of due payments to the finance ministry to pay the workers at a time.

The workers were paid their dues after the Finance Division finished the audit and released the money for payment.

The BJMC said workers of the remaining 25 mills would be paid off following the same procedure ‘very soon'.