ILO, Bangladesh govt launches workplace injury insurance pilot for garment workers

The International Labour Organization (ILO) and a number of clothing companies, including H&M Group, Fast Retailing, and Bestseller, have collaborated on a pilot project to give income protection and medical treatment to garment workers in Bangladesh who are victims of employment-related injuries.

On June 21, the International Labour Organization (ILO) and the Government of the People’s Republic of Bangladesh inaugurated a four-year trial of the Employment Injury Scheme (EIS), which covers all ready-made garment (RMG) workers.

The project, which already has a number of apparel brands committed to making voluntary financial contributions, is reported to be the first to safeguard Bangladesh employees from income loss due to workplace-related injuries.

The project represents a watershed moment in terms of developing decent work and economic growth in the country, and the ultimate goal is for it to be implemented permanently when the trial period expires.

The pilot program provides compensation to injured workers and their relatives in the event of work-related incidents that result in permanent disability or death.

The inaugural project is governed by a tripartite committee created by the Government of Bangladesh, which includes officials of the Ministry of Labour and Employment, as well as employer and worker representation.

In accordance with the provisions of the ILO Employment Injury Protection Convention, the International Labour Organization (ILO) directed the conceptualization and implementation of the pilot, as well as attempts to involve brands in the initiative.

Bestseller, Fast Retailing, the H&M Group, KiK Textilien und Non-Food GmbH, Primark, and Tchibo are among the firms that have previously made pledges as promises for voluntary financial contributions as forerunners for appropriate protection against work-related accidents in Bangladesh.

Yukihiro Nitta, Fast Retailing’s group executive officer and head of sustainability, said that Fast Retailing recognizes that one of its most essential obligations is to defend the security and safety of the people who help to make their clothes. Their continuous collaboration with the ILO is based on a commitment to finding solutions to challenges that affect all employees in Asia, not just those in their supply chain, through systematic social protection measures and improved working conditions throughout the region. The new EIS pilot program opens the door to a substantial new safety net for employees in Bangladesh, one of their important manufacturing locations. They’re thrilled to be able to support it.

The pilot project will collect data and create capacity on occupational accidents, illnesses, and rehabilitation in a selection of typical enterprises.

A research will be conducted to determine the typical medical expenditures for an injured worker. This will aid in identifying the resources required to efficiently meet the medical care requirements outlined in the Bangladesh Labour Act.

The investigation will include the procedure followed and the benefits granted in the event of temporary disability. This will show the practicality, feasibility, and cost-efficiency of an EIS in Bangladesh by examining the impact of a sharing of responsibility approach.

It is expected that 150 factories will contribute to the generation of evidence required for a long-term solution.

The pilot project will also allow for risk-sharing for long-term benefits, such as compensation payments in the event of permanent disability or death for the whole RMG industry in accordance with international labor rules.

The pilot offers income replacements for the permanently incapacitated and dependents of dead employees in this component, which covers the whole RMG industry. This takes the form of recurrent payments as top-ups to the Central Fund’s previously existing lump-sum payments, making the amount of benefits compliant with ILO Convention No. 121. The voluntary donations of worldwide brands and merchants will fund these top-up payments. In doing so, they are accelerating the transition to a comprehensive job injury insurance plan while also supporting the core efforts of government officials.

This is consistent with the ILO MNE Declaration, which urges businesses to complement public social security systems and support future growth, particularly through employer-sponsored programs.