The study, undertaken by the New Conversations Project at the Cornell University School of Industrial and Labor Relations, lays out the key elements for a global severance fund, namely the need for it to be legally binding and to feature detailed obligations on brands and employers regarding the provision of severance.

When millions of garment workers at factories around the world lost pay and jobs during the early stages of the pandemic, the study states, it brought to light the precarious work environment they have faced for decades. 

The Clean Clothes Campaign, an alliance of apparel labour unions and non-governmental organisations, estimates that garment workers’ income globally declined by US$11.85bn during the first 13 months of the pandemic alone. 

“Covid was a stress test for systems – private ones run by fashion brands and public ones built by national governments – to protect workers in the global apparel industry,” says Jason Judd, executive director of the ILR School’s New Conversation Project.

He adds: “Most were found wanting. We were asked by IndustriALL, the global union that represents apparel workers, to evaluate past efforts and possible models for a global severance fund to compensate apparel workers who have lost their jobs and income.” 

The Clean Clothes Campaign believes the global severance fund should not replace the need for government social protection schemes, but rather incentivise the strengthening of such schemes. 

The findings support the proposal for an enforceable agreement put forward by the Pay Your Workers-Respect Labour Rights (Pay Your Workers) campaign, which is backed by dozens of garment worker unions in major apparel producing countries, as well as labour rights organisations including Clean Clothes Campaign and Worker Rights Consortium.  

Both the Cornell research and the Pay Your Workers campaign emphasise the current lack of adequate social protection systems in major apparel production countries, and the responsibility brands have towards workers in their supply chains. Cases of severance theft have grown exponentially during the pandemic, with the Worker Rights Consortium estimating that over half a billion dollars in severance has been stolen from garment workers since the pandemic began.

Clean Clothes Campaign says the Cornell research confirms the need for brands to pay into a binding global severance fund to ensure that workers whose factories close or who are laid off ‘en masse’ receive their full legally mandated severance when their employer fails to pay.   

The proposed Pay Your Workers agreement has been popularised on social media under the #PayYourWorkers hashtag and the campaign has been endorsed by more than 260 civil society organisations. The proposal builds on the success of the Accord on Fire and Building Safety in Bangladesh, a binding agreement between apparel brands and two global union federations, IndustriALL and UNI. The Accord has proven to be the most successful model to address abuse in the apparel industry, and yet brands continue to resist signing a binding agreement to counter severance theft. 

Kalpona Akter, president of the Bangladesh Garment and Industrial Workers Federation, an IndustriALL affiliate, told the Clean Clothes Campaign: “Many of the brands we have contacted are refusing to negotiate with us, deferring instead to their participation in the ILO-convened Call to Action. The Cornell report confirms that this call to action has not independently raised funds to alleviate the impact of the pandemic on garment workers. The Call to Action’s fund is based on voluntary participation, without enforcement provisions, and without any obligation for the parties to contribute. It is not surprising that it has not delivered meaningful relief for garment workers.”  

Edgar Romney, secretary-treasurer of Workers United, a member of IndustriALL, said: “The Cornell study shows the vital need for the Pay Your Workers campaign, calling on brands to respond to the demands of unions to provide essential relief to garment workers during Covid and a sustainable solution going forward by negotiating a binding agreement to address workers’ income loss during the pandemic; ensuring they receive severance if they are left jobless; and respecting freedom of association and collective bargaining rights.”  

In July 2021, The Clean Clothes Campaign published a report called ‘Still Un(der)paid‘ saying fashion brands owed garment workers for unpaid income.