Safety shutdown brings thousands of job losses
Pacific Jeans Limited has begun ending the employment of about 5,000 workers at its oldest factory in the Chattogram Export Processing Zone (CEPZ), after a structural assessment identified a risk of potential building failure. The company plans to demolish Unit-1 and replace it with a factory that it says could employ around 10,000 people.
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The employment termination process began on October 31 under the Bangladesh EPZ Labour Act, 2019. Bangladesh Export Processing Zones Authority (BEPZA) officials and Industrial Police said 509 workers from the cutting section received their dues on the first day. Workers in sewing, washing and other sections are to leave in phases as payments are made.
The company and Industrial Police put the affected workforce at around 5,000. Information attributed to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) gives a higher estimate of approximately 5,500.
The closure concerns Unit-1, the company's first factory at CEPZ. Production at Pacific Jeans Limited's other units and the wider Pacific Jeans Group continues, according to the company and BEPZA. The group's other nine factories, including Unit-2 at CEPZ, employ around 30,000 people.
For workers leaving Unit-1, the immediate change is the loss of their current jobs, even though the business plans to rebuild. Pacific Jeans has promised to give them priority in recruitment at the replacement factory. Employment there would follow construction and the start of operations, leaving affected families facing a gap between their present wages and any future opportunity.
What the engineering checks found
Pacific Jeans said the RMG Sustainability Council (RSC) conducted a special structural safety audit, followed by a Detailed Engineering Assessment. That assessment identified a risk of potential structural failure. A detailed engineering assessment examines whether a building's structure can safely carry the loads placed on it.
The company described Unit-1 as a complex comprising three buildings. The factory building scheduled for demolition has also been described as having five storeys. Pacific Jeans managing director Syed M Tanvir said the decision to suspend production put workers' lives and safety first, and that the company would pay compensation and other legal entitlements.
Mahmuda Begum, superintendent of Industrial Police in Chattogram, said an RSC audit had identified the infrastructure as risky about a year before the closure. She described what happened after that finding:
The factory's infrastructure was declared risky in an RSC audit a year ago. Even then, they continued production after carrying out some internal renovation work.
A company official also said experts from Bangladesh University of Engineering and Technology and Chittagong University of Engineering and Technology advised demolition after further examination. The sequence places the shutdown after an earlier warning, renovation work and subsequent engineering review.
Which payments workers are being promised
Pacific Jeans says it is paying workers under the Bangladesh EPZ Labour Act, 2019, the law governing employment in the country's export processing zones. The company has listed several separate entitlements, rather than a single payment for every employee.
- Outstanding wages, overtime and other allowances.
- Payment for unused earned leave.
- Notice pay and service benefits.
- Provident fund contributions, including profits.
Notice pay compensates an employee for the notice period covered by the termination payment. A provident fund is a savings arrangement connected to employment. Individual final settlements can vary because workers have different lengths of service, wages, unused leave and fund balances.
The company says final payments are being deposited into workers' bank accounts. Employees are also receiving payslips setting out their entitlements, experience certificates and letters of recommendation. The certificates and letters can help document their employment when they apply elsewhere.
BEPZA officials said all payments would be completed within three weeks of the first disbursements. A company official gave November 15 as the payment deadline. Both accounts describe a staged settlement process, with the remaining departments following the cutting section.
How the closure is unfolding
Unit-1's shutdown involves several stages: ending production, settling employment payments, securing approvals, demolishing the old structures and building the replacement. The dates given for workers leaving the factory cover different parts of that process.
- 1984: Pacific Jeans Group began its business operations.
- 1992-93: Pacific Jeans Limited began its activities at CEPZ.
- 1994: The factory that became Unit-1 started production.
- October 31: The company began ending employment in phases, with 509 cutting section workers receiving their dues.
- November 3: An employee said work was expected to continue until this date.
- November 15: A company official identified this as the deadline for paying workers, while BEPZA described a payment period of three weeks.
The company has described the structures as approximately 34 years old. Unit-1 was established under M Nasir Uddin and became the group's first manufacturing facility in CEPZ, making its closure the end of operations at a site closely connected to the business's early expansion.
Remaining workers in sewing, washing and other sections are being released after their dues are paid. The department by department process explains why the first employment terminations and the expected final working day fall on different dates.
Why workers were not moved elsewhere
Pacific Jeans Group has other operating factories, but the affected workers are losing their Unit-1 jobs rather than moving together into another plant. Company representatives linked the absence of transfers to earlier disputes within the group.
According to their account, workers at several Pacific factories had protested over benefits and demanded that they not be transferred between factories. The company said this disrupted efforts to place Unit-1 employees at Pacific Attires Limited, another group factory that had begun operations about two years earlier.
The transfer dispute matters because it explains the company's stated reason for proceeding with employment terminations despite having other factories. The commitment now offered to affected workers is priority in recruitment when the replacement Unit-1 facility opens.
Mahmuda Begum said workers were receiving their dues and employment certificates. She also described the conditions during the release process:
The entire process is being carried out according to the rules and in a peaceful manner. There is no unrest among the workers.
Her account concerns the process at the time of the initial payments. Workers leaving the factory still face the practical task of finding another income while the old site is cleared and rebuilt.
The replacement could double employment at the site
Pacific Jeans plans a modern factory with multiple storeys on the same site. It says the building would be designed with environmental considerations and could create around 10,000 jobs once operating.
Compared with the company's current estimate of 5,000 affected workers, the proposed workforce would be twice as large. That would mean capacity for about 5,000 more jobs at the site if the plan is completed and recruitment reaches the projected level.
A company official said reconstruction was expected within one and a half years. The company's broader statement gave no fixed completion date, and demolition and rebuilding depend on the required approvals and RSC guidance.
Pacific Jeans has said existing workers will receive priority when hiring begins. No detailed recruitment timetable or explanation of how that priority would work has been announced. For employees receiving final settlements now, the proposed jobs remain a future opportunity.
The immediate order of work is clearer: obtain the necessary permissions, demolish the unsafe buildings and then construct the replacement. Employment at the new factory would come after those stages.
Other Pacific factories remain in production
Pacific Jeans and BEPZA have rejected claims circulating on social media that the wider group is shutting down. Abu Sayed Md Anwar Parvez, BEPZA's executive director for public relations, said the closure of one building had prompted unfounded rumours about the other factories, which remained operational.
The group employs more than 35,000 workers and staff across 10 companies or units. About 30,000 work at the nine factories outside the affected Unit-1 operation. Its combined annual production capacity is around 50 million garments across the 10 units.
Those figures show why the shutdown is both a major local employment event and a limited part of the group's business. About 5,000 workers are leaving one site, while a much larger workforce continues production elsewhere. The 50 million figure describes annual production capacity across the business; the company has given no breakdown of the output lost through Unit-1's closure.
For the affected workers, the next concrete milestones are payment of their remaining entitlements and the end of their current employment. For the company, the next stages are the demolition approvals and reconstruction work needed before its promise of a larger factory can become new jobs.
Key Points
- Pacific Jeans is closing Unit-1 at CEPZ after an engineering assessment identified a risk of structural failure.
- The company and police estimate about 5,000 affected workers; BGMEA information puts the figure at approximately 5,500.
- The first 509 cutting section workers received their dues on October 31, with other departments following in phases.
- Pacific Jeans says payments include wages, overtime, unused leave, notice pay, service benefits and provident fund balances with profits.
- The group's nine other factories continue operating and employ around 30,000 people.
- A replacement factory could employ around 10,000 workers, with priority promised to current employees.
- A company official estimated reconstruction would take one and a half years, but no fixed completion date has been announced.
