• COVID19, Global Home, Success Stories

Covid Recovery Fund Bolsters Laid-Off Workers To Stay Afloat

13 Jan 2022

A collaborative Covid recovery fund is doing something unique – offering direct compensation to laid-off workers. The ILO-BMZ fund has provided needed relief to garment workers in Indonesia who have been without work for months – or even years.

Sri Sayekti, 55, had to swallow a bitter pill on September 20, 2020. On that day, the factory she worked in for 27 years had just let her go, after being furloughed for six months prior to the announcement.

Her employer only gave her a severance pay of Rp 6.5 million (US$453.95) “due to the coronavirus,” Sri recalled, much lower than what she deserved for working almost three decades in the company. However, she had no choice but to accept it.

“We have tried to protest against it but it did not succeed. We rejected it at first, but what can we do?” said Sayekti, whose former garment factory was located in Ungaran, Central Java.

Sri is among 22,840 workers recorded by Better Work Indonesia who have lost their jobs since the start of the pandemic. The Government of Indonesia announced its first COVID-19 case in March 2020 and had experienced spikes in cases in the last two years, affecting businesses and their staff across the country.

Chief Technical Advisor of Better Work Indonesia, Maria Vasquez, said mobility restrictions enforced domestically and globally have hit the garment industry hard, with business health being heavily reliant on imported raw materials and export markets.

A survey conducted by the programme between March and May 2020 showed that around 70 percent of Better Work Indonesia member factories closed for less than one month. Another survey conducted in May 2020 of 216 member factories found that 28 percent of them saw reduced or held existing orders, while others reported cancelled orders or lacked raw materials or resources needed for production.

Dedi Syaifullah, a human resources manager at a factory in West Java, witnessed such an impact. He said the number of orders nosedived by 50 to 60 percent between May and June of 2020 compared to the previous year.

These conditions forced the company to discontinue the contract of around 350 employees, who had worked for less than a year and whose contract had ended during the period. Such layoffs reduced the factory’s capacity to 40 percent.

A year later, the company managed to double its capacity to 80 percent by accepting every incoming order regardless of its profitability. However, Dedi explained, the factory has yet to absorb around 100 former employees through the increase.

As such, he said the company benefited from a crucial source of compensation, an International Labour Organization-the German Federal Ministry of Economic Cooperation and Development (ILO-BMZ) fund. The programme gives a one-off Rp 1.2 million (US$90) for workers who have lost their jobs between July and May 2021.

“It was very helpful, especially for those 100 people, because it had been around a year between the moment they were let go and when the scheme [started],” said Dedi.

Sayekti also reaped benefits from the ILO-BMZ programme as she used the money to take on sewing courses since last October. Since then, she has learned how to sew shirts and skirts and she will soon learn how to sew trousers and kebaya, traditional tunic-like blouses.

Her efforts to increase her skill set and employment prospects have paid off. She has already received several orders to sew or patch up clothes. She hopes that the skills she learned will help her start a sewing business at home to pay for her children’s education.

“I’m happy and grateful, Alhamdullilah (Thank God), to receive the help,” she said.

Just like Sayekti, former factory worker Ratna Widiastuti said she was thankful for the relief funds. She used her share to buy COVID-19 treatments and healthy food, as the virus had infected Widiastuti and her family when she received the money.

Widiastuti previously had to resign from her job in November 2020 due to health concerns. Since then, she has helped her husband to run a kiosk that sells basic necessities.

“At the time, the [kiosk’s] income fell so I was hoping the [funds] could help as additional capital. But when it was disbursed, we were sick, so we were really helped by it.”

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