Sri Lanka: Statement on the closure of two Esquel factories

14 April 2022, Mumbai:

Approximately 1,500 workers employed at two factories – Koggala I and II - owned by Esquel Sri Lanka are facing imminent closure of their workplaces with no assurance that they will be re-employed when the factories are sold to another company.

The closures are taking place at a time of severe economic crisis in Sri Lanka in which people, including garment workers, are facing a rapid rise in their cost of living, shortages of electricity, food, and other necessities, and a declining value of the national currency.

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“Many of these workers have been employed by Esquel for decades.

Over the past 1.5 years, we have tried to negotiate in good faith for an agreement to ensure fair compensation and a re-employment plan with both Esquel and their buyers, who continued to profit while workers suffer,” says Anton Marcus, Joint Secretary, Free Trade Zones & General Services Employees Union.

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Workers suspect that the factories will be reopened with new owners, but fear that union members and supporters will not be rehired.

They report that some major employers in the sector are already refusing to hire former Esquel workers affiliated with the Free Trade Zones & General Service Employees Union (FTZ & GSEU).

Esquel has a long history of union-busting and discrimination against union activists. The two Koggala factories have been non-operational since 15 March. The company had requested permission from the Commissioner-General of Labour to terminate the workers’ contracts. That ruling remains pending.

They are also calling on Sri Lanka’s Commissioner General of Labour to provide reemployment guarantees for the workers who lose their jobs as a result of the factory closures.

Esquel Sri Lanka operates two additional facilities, Ekala and Kegalle.

The approximately 2,000 workers at these facilities also face unsure futures as both leases run out by end of this year.

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