Summary of ACT Framework for responsible suspension of orders in Myanmar
The following framework takes into account the complexity and severity of the situation in Myanmar. It recognises that business is not operating as usual and that the security and commercial circumstances of companies varies greatly.
ACT brands agree to apply this framework when circumstances require them to suspend orders or exit from factories in Myanmar. If extenuating circumstances deem it not possible to follow this framework completely, ACT members commit to notifying IndustriALL.
ACT member brands commit to:
- Maintain open lines of communication with supply chain partners about the status of business operations, future planning (where possible), the shifting context and the implications for factories and workers.
- Ensure payment for finished goods and goods in production.
- Take responsibility in cases in which a supplier has incurred a fabric liability as a direct result of the amendment of brand orders.
- Carry out risk-based impact assessments to understand potential impacts on workers and factories. This includes seeking to identify and respond to the most severe cases first, as current circumstances allow. Impact assessment and due diligence should distinguish between active factories that are operational and the ones that are not operational.
- Use, where applicable, remaining aggregate leverage between ACT brands with suppliers or corporate group(s) to mitigate the negative impacts on workers, as current circumstances allow. Brands should inform the supplier or factory in writing* that where terminations are absolutely unavoidable, such terminations are to be done in accordance with local law, applicable collective bargaining agreements, the Myanmar FOA Guideline (see Section 4) and the following provisions:
- The employer should, where possible, Consult with worker(s) and their representatives regarding future employment/redundancy plans before a final decision to dismiss is taken. (See FOA Guideline, Section 4, Para 19)
- The employer should ensure that the worker(s) whose employment will be terminated are selected objectively. (See FOA Guideline, Section 4, Para 17)
- The employer should provide, where possible in writing, notice to the workers of the employment termination.
- The employer should ensure that all possible alternatives to employment termination are explored and that workers who are to be dismissed are treated fairly.
- The employer should allow the worker(s) whose employment will be terminated time off during the notice period to apply for other jobs
- The employer should also ensure that all wages, severance pay and other benefits are paid according to the law.
- Acknowledgment by supplier that workers were paid (show payment documentation).
In the event that it is impossible for the active factory to meet the above requirements, the factory should inform the brand and the case will be addressed in a joint process agreed by ACT members.
* The term in writing refers to any form of written communication, including email communication.