MOLSA-BMZ-ILO Job Retention Programme for Textile and Garment Workers in Ethiopia in Response to COVID-19
Protecting Textile and Garment Sector Workers: Occupational Safety and Health and Income Support in response to the COVID-19 Pandemic
The MOLSA-ILO-BMZ job retention programme is part of an emergency assistance programme to the textile and garment sector in Ethiopia during the COVID-19 crisis with financial support from the Federal Ministry for Economic Cooperation and Development (BMZ) of the Federal Republic of Germany. It aims at encouraging employers, who are registered with POESSA, to maintain employment by subsidising part of the wages factories pay their workers while retaining them on the job.
The program is aligned with the principles enshrined in International Social Security Standards and follows principles based on a rights-based approach towards social protection, social dialogue, solidarity in financing, sustainability and coherence with social, economic and employment policies
The program aims at reducing the vulnerability of textile and garment workers to the direct and indirect socio-economic impacts of COVID 19, at factories to continue to operate retaining their workforce and ultimately at building a more sustainable and resilient social protection system.
The benefit package will be monthly wage subsidy to be provided for eligible factories (calculated based on the number of workers employed during the programme coverage multiplied by their respective gross salary). The Program pays gross salary.
NB: Workers are defined by labour proclamation; management is excluded from this support.
The total programme budget available in Ethiopia is US$ 4,500,000.00 (approx. 181,631,779.91 Birr)
 Gross Salary refers to the workers’ basic salary and does not include over time, transport, house allowance or any other fringe benefits.
The following section describes how to assess textile & garment sector factories eligibilties. Eligibility will be checked as follows:
Registration and application form
Factories who fit the eligibility criteria can initiate their application to receive the support by registering to the program using the registration button below this page.
NB: Workers from eligible factories do not need to apply individually.
The applicant factory will need to upload all required documents to complete their application.
The technical tri-partite committee will review all complete applications and inform applicant factories within one month from the submission deadline, whether they have been approved to receive the support or not.
All applications will be informed of the decision on their eligibility for the program and a list of approved companies will be published on this website as it becomes available. Applications that are not complete will be automatically rejected.
Eligibility Criteria for the Job Retention Programme
To be eligible for the Job Retention Scheme, applicant factories need to meet the following eligibility criteria:
- Proof of license to operate in Ethiopia: The factory must have renewed the trade license for 2013 FY (no clearance required);
- The factory has paid pension contributions for the month of February 2020 or Yekatit 2012;
- The factory has not received any similar wage subsidies (cash transfer) from other development partners, government or private sectors;
- The factory can provide proof of having experienced an ‘economic’ shock evidenced by at one of the following criteria: (1) drop in sales or orders; (2) reduction of income/profit; (3) inability to provide entitlements/annual increments to workers as per the collective agreement.
Required Documents Checklist
- An audited financial statement by certified auditor for the year 2019 and 2020;
- A financial statement for the year 2019 and 2020 certified by an internal/assigned auditor;
- Evidence that shows reduction in sale, orders, profit earnings in 2011, 2012 FY and 2013;
- Evidence/payroll that shows the factory has retained workers during the covid-19 pandemic as outlined in the COVID-19 protocol;
- If the factory is exporting, evidence that export earnings declined in 2012 FY or 2013 FY as compared to 2011 FY;
- Any other supporting document that shows that the company has experienced an economic shock, approved by Technical Working Group.
The following factories will be prioritized:
- If they, show evidence of applying the core conventions ratified by Ethiopia (presence of union, OSH committee registration, collective bargaining document)
- If they are registered for the ILO/Better Work Programme.
- If they can showcase how the factory implements bipartite social dialogue
The program reserves the right to perform independent audits of beneficiary factories as necessary.
What is the selection Process?
- Fill in the Registration Form
- Upload all related documents by the Applicant Factory
- Receive and Screen Application by the Tri-Partite Technical Working Group
- Confirmation or not of eligibility by the Steering Committee including communication by mail to all applicants
- Bank Transfer to workers of the beneficiary factories
What are the benefits?
If a factory satisfies the eligibility criteria, it may be eligible for a monthly payment based on the number of factory operators (workers, managers are excluded) it has on the payroll.
- Factories will be eligible for a subsidy equivalent to a monthly lump sum of gross salary of workers
- The maximum support is limited to 3 months, depending on available budget.
- Workers of beneficiary factories will directly receive their subsidy payments through bank transfer. Bank transfer fees be fully covered by the programme.
- For workers with a contract longer than 45 days, the program will cover the social contributions due by the employers, namely 7% of gross salary due to Private Organizations Employees to ensure workers remain covered during the duration of the program.
- Note: Pension fund contributions by the employers (11 % of workers salary) shall be paid by the factory as employers’ contribution to the programme.