The payment of group insurance money for garment workers will now be made from a ‘central fund’, instead of relevant factory authorities amid strong protest from rights groups. Bangladesh Garment Manufacturers and Exporters Association (BGMEA) in a recent circular informed its member-factories that they would not be required to pay insurance premium to the apex body from May 7 last saying the claim of the group insurance would be met from the central fund. The BGMEA’s move came in line with the labour ministry’s decision in this regard. The government, after the Rana Plaza building collapse, formed the ‘central fund’ for the country’s readymade garment (RMG) sector. It came into effect from July last year with money received from each export receipt at 0.03 per cent, officials said. “We are planning to provide the group insurance claim of garment workers from the central fund from November next,” a senior labour ministry official said. The ministry is in favour of directly paying the claim from the fund as additional money needs to be paid if insurance company is involved, he added. When asked, Mahmud Hasan Khan, vice president of BGMEA, admitted that from now on, the garment factory owners are not required to pay the group insurance premium. Labour leaders, however, said that providing the group insurance claim from the central fund is contradictory to the existing law of the land. According to the existing labour law, group insurance is mandatory for an establishment having at least 100 permanent workers and it is the responsibility of the employer to make arrangement for payment of the amount. Each of the workers and his or her nominees in the apparel sector is entitled to receive Tk 0.2 million for death and Tk 0.125 million for any disability while at work, according to the group insurance policy. Terming the move contradictory to the existing law, Sultan Uddin Ahmed, executive director of Bangladesh Institute of Labour Studies, said according to the law, group insurance is mandatory and the premium must be paid by employers. The central fund has been formed for the RMG sector as a replacement of a company’s five per cent profit-sharing provision, he said. The responsibility has now been transferred to a fund from the factory owners, he explained The workers are already deprived of the existing profit of the company while they would now get the insurance amount from their portion because of their death at work.
