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Tegra is set to sign a deal to pay 965 workers around $600,000 in layoff and other compensation as it unwinds a key apparel factory in Managua, Nicaragua, trades union officials told Sourcing Journal.

“We are going to sign the deal this afternoon,” said Miguel Ruiz of the Coordinadora Regional de Sindicatos de Maquila overseeing workers’ interests alongside IndustriAll and other unions. “They have agreed to pay 20,000 cordobas, [$566] equal to 3 months of salary and social security payments until August or September. We are just going to formalize the agreement.”

Ruiz said the U.S. sportswear maker, which is restructuring its business in Central America and has production arrangements with brands like Nike, will also help fund a labor fair to help dismissed garment workers at the site, located in the Astro Industrial Park in Managua, find new work.

Meanwhile, Tegra’s plans to merge its operations in Honduras are progressing according to schedule, said union official Wilson Jarquin. The firm hopes to integrate its Southern Apparel Contractors and New Holland Lingerie de Honduras divisions in a process that is not expected to result in any  job losses.

“They are executing the plan and will start moving people around in the next two weeks,” said Jarquin, adding that workers will be shuffled between different apparel manufacturing sites as part of the reorg.

He added, however, that unions have asked Tegra to sign a formal pledge that the process won’t bring headcount losses and will provide layoff compensation to long-time workers who choose to leave the newly merged entity.

“One thing is to say they won’t lay off anyone and another is to sign a legal agreement promising that,” Jarquin noted.

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