Company in Leon, Nicaragua Sends 10,000 Workers Home over COVID-19

Yazaki, the largest free trade zone company in the country, suspends operations: they will receive 50% of their salary while the emergency lasts

By Ivette Munguia (Confidencial)

HAVANA TIMES – The multinational Yazaki, of Japanese origin, stopped operations this weekend in western Nicaragua to prevent the spread of coronavirus Covid-19. The 10,000 workers at the free trade company, located in Leon, were verbally notified of the temporary cessation of work, during which time they will receive 50% of the salary.

A company source explained to Confidencial that the work break will last 15 days and they plan to resume work on April 13, after Easter week. Meanwhile, the quality control area will take advantage of the downtime to “redistribute the production lines.”

The decision of the free trade zone company derives from a three-party agreement signed in the framework of the coronavirus pandemic. It establishes that to prevent infections, and due to reductions of production orders by brands or for a lack of raw materials, the companies could: “grant permits with percentual payment of wages, grant an advance on vacations, reduce working hours and carry out remote work activities.”

The agreement that was endorsed by unions such as the Sandinista Workers’ Confederation (CST) and the Jose Benito Escobar Workers’ Trade Union (CST: JBE) and also contemplates “temporary suspension of employment contracts under article 38 of the Labor Code.”

Sandra Ramos, a former union leader, and founder of the Maria Elena Cuadra Women’s Movement, questioned the methods used and decisions.

“When a company suspends (workers) on a large scale, workers, according to article 38, only receive six days of salary. Afterwards, what will happen to them? How are they going to pay their debts or buy food?

Yazaki is a Japanese factory dedicated to the production and export of automotive harnesses. It currently has five plants located in Leon and Chinandega and constitutes one of the main sources of employment in the western part of the country.

Free trade zone companies without raw materials

On March 23, the free trade zone company Gildan suspended operations at its three plants located in San Marcos, Rivas and Masatepe, as a measure to prevent a large spread of coronavirus Covid-19 among its 9,000 workers.

The textile company, like Yazaki, plans to resume its work after Easter and in a statement invited its workers to follow the prevention instructions issued by health authorities and “remember the hygiene measures promoted daily” in their plants.

The statement indicates that they will communicate “in a timely manner to their collaborators any information that is important for the development of their work.”

Another company that chose to suspend its work temporarily was the free trade zone company “Las Palmeras” located in the municipality of Masatepe. This company employs 300 people who are responsible for making pants. With the decision, workers will be at home for 15 days with salary, as confirmed by “Articulo 66” (an online magazine).

In Nicaragua, according to figures from the Central Bank, published as of February 2019, there were 123,853 people working in some 187 free trade zone companies in the country.