Labor Management Relations and

the Extent of the Implementation

of Labor Laws in Bangladesh

Human Resource Management

Institute of Business Administration

University of Dhaka

1
 Case Study
Term Paper

Labor Management Relations and the Extent of the

Implementation of Labor Laws in Bangladesh

Course Title: Human Resource Management

Course Code: H301
Program: BBA

Prepared For,

Saeed Alamgir Jafar

(Professor)
Institute of Business Administration
University of Dhaka

Prepared By,

Group: 04

Wajiha Reza Farah Siam Shahida Akther Ohidul Islam Jawaad Bin
Hamid
Roll: RQ-04 Roll: RQ-11 Roll: RQ-34 Roll: ZR-35 Roll: ZR-41
Batch: 17th (A) Batch: 17th (A) Batch: 17th (A) Batch: 17th (A) Batch: 17th (A)
Program: BBA Program: BBA Program: BBA Program: BBA Program: BBA

Institute of Business Administration

University of Dhaka
Date: 30.05.10

2
LETTER OF TRANSMITTAL
May 31, 2010

Saeed Alamgir Jafar

Professor
Institute of Business Administration
University of Dhaka

Dear Sir:

We herewith present our “Term Report” authorized by you as a requirement for this course.

In this report, we studied the labor management relations primarily in the Ready Made Garments (RMG)
Sector of Bangladesh and the extent of implementation of associated labor laws. We have further tried to
provide an in-depth analysis of how employers and employees in this sector comply with various labor laws
and their difference is perspective regarding labor management effectiveness.

If there is any need of any form of clarification, we would appreciate a call from you to any of our group
members.

Sincerely,

Group: 04

Wajiha Reza Farah Siam Shahida Akther Ohidul Islam Jawaad Bin
Hamid
Roll: RQ-04 Roll: RQ-11 Roll: RQ-34 Roll: ZR-35 Roll: ZR-41
Batch: 17th (A) Batch: 17th (A) Batch: 17th (A) Batch: 17th (A) Batch: 17th (A)
Program: BBA Program: BBA Program: BBA Program: BBA Program: BBA

3
ABSTRACT

This report is divided into two parts.

Part I of the report gives a brief overview of the field of labor relations and the important issues associated
with it. It analyzes from the perspective of both the management and employees, the advantages of trade
unionism. However, the negative consequences of trade unionism have been mentioned as well. Besides
these, the contract negotiation tactics and preparations essential to the management have been briefly
discussed.

Part II of the report deals with the labor relations practices in the Ready Made Garments (RMG) industry of
Bangladesh and the extent of implementation of labor laws in the same industry. The consequences of
these two have been analyzed using both primary and secondary data obtained from trustworthy sources.

5
Table of Contents

EXECUTIVE SUMMARY...................................Error! Bookmark not defined.

1.0 INTRODUCTION..........................................................................................3
1.1 Origin of the Report................................................................................3
1.2 Objective...............................................................................................3
1.3 Scope.....................................................................................................3
1.4 Methodology..........................................................................................3
1.5 Limitations.............................................................................................4

7
 EXECUTIVE SUMMARY

Labor relations is the field that emphasizes skills managers and union leaders can use to minimize costly
forms of conflict (such as strikes) and seek win-win solutions to disagreements with labor force. For
management the decision involves whether the organization will work with unions or develop/maintain non
union operations. The decision is influenced by outside forces such as competition, public opinions etc.
While there are several advantages of unionism to both the members and the employers’, negative
consequences on profitability and productivity have also been found by various researches. However, the
best labor relations strategy is dependent on the tradeoffs between the positive and negative
consequences and the external legal environment.

The readymade garments (RMG) industry of Bangladesh has contributed extensively to the export oriented
growth of the country. Too much of the nation’s fortune is riding on this one sector. With the two million
workforce it employs directly, and another one million in linkage industries, it supports the livelihood of
some 10 million Bangladeshis. However, the rapid growth in these female-labor-dominated, export-based
manufacturing industries is now also raising new issues and concerns about evolving industrial relations in
the RMG sector.

It would be interesting to note in this connection that, from the very outset, most RMG factory owners tried
their best to keep the factory units as informalized as possible, because that would provide them with
greater flexibility in terms of labor management, unit production and working hours, without significant
social obligations to their workforce. Any kind of unionization, including in-house unionization, was also
perceived as undesirable by most garment factory owners because, as they argued, at the formative phase
of their manufacturing businesses they could not afford to be distracted by “unreasonable” workers’
demands and “unnecessary disruptions” by the trade union leaders who, at one point or other, “might try
to pursue their own selfish agenda in the name of worker’s participation”.

The owners of these enterprises utilized informalized labor recruitment and workplace policies, which
included recruiting workers without proper “appointment letters” and providing the supervisory staff full
authority to hire and fire semi-skilled casual workers (from other factories or unemployed) whenever
necessary. Such practices enabled the owners to maintain their strong grip over management and labor
relations and sought to rule out any kind of unionization.
The trade union movement is relatively weak in RMG industry of Bangladesh. This is partly owing to the
multiplicity of trade unions and partly owing to the considerable intimidation imposed in practice,
especially workers’ fear of losing their jobs should they show any sign of union activity. The right to
freedom of association and to collective bargaining at the workplace is not respected in the garment
sector.

While trade unions exist, they are ineffective in the application of their objectives. The leaders of the trade
unions are corrupt; making it is impossible for the trade union leaders to do some welfare for the general

8
labor. This is due to the fact that almost all the CBA leaders have an open secret understanding with the
owners of the establishments, which lead them to the uninterrupted corruption and irregularity. The CBA
leaders seldom see the interests of the labor. The monthly subscriptions given by the labor are not used
for their welfare. It is just used for the personal purpose of the leaders of the trade unions.

News reports published in leading vernacular and English dailies of the country in recent years suggest an
increasing trend of physical assaults, gherao, demonstrations, rallies, work stoppages and lay-offs in the
ready-made garment sector. Such “unhealthy” management-labor relations result in loss of wages for
workers as well as loss of productivity.
The restricted laws regarding union association right of workers, lack of proper grievance procedure and
communication mechanism in the factories, increasing prices of essential goods, salaries well below ‘living
wage’ levels and limited trade union action are some of the main reasons behind the growing worker
unrest which threatens the industry. Violent uprisings have been a common sight over the last few years
and they have seemed to become a part of the industry.
The RMG sector in Bangladesh has been facing intermittent serious violence in recent years. It is belief of
many that who are at the heart of the boom of the RMG sector that they have not been touched by the
benefits of this growth. So they turn to violence, which is just a mere means to vent frustration.

1.0 INTRODUCTION

1.1 ORIGIN OF THE REPORT

9
This report entitled ‘Labor Management Relations and the Extent of the implementation of Labor Laws in
Bangladesh’ was prepared for our respected faculty, Professor Saeed Alamgir Jafar, to fulfill the partial
requirement of the course ‘Human Resource Management’, for the Bachelors of Business Administration
curriculum in the Institute of Business Administration, University of Dhaka.

1.2 OBJECTIVE

The primary objective of this report is to study the labor management relations primarily in the Ready
Made Garments (RMG) Sector of Bangladesh and the extent of implementation of associated labor laws.

The principal secondary objectives of the study are as follows:

• To study the labor management relationship practices.

• To study the consequences and impact of existing labor management relations.
• To review the existing laws relating to labor rights.
• To study the extent of the application of labor laws containing labor rights.
• To examine the role of labor unions in ensuring the labor rights.

1.3 SCOPE

Our report focuses on the Labor Management practices of the RMG Sector of Bangladesh exclusively. The
main focus of our report has been to conduct a detailed examination of the existing labor management
relations and the extent of the application of the labor laws in the RMG sector of Bangladesh. This is only
representative of one segment of industrial Bangladesh and may not reflect the trend of the entire country.
It should also be noted that the research is conducted in the EPZ of Savar in Dhaka. Thus, the results are
not representative of other EPZs in the country.

1.4 METHODOLOGY

In order to analyze the existing labor management relationship practices and determine the extent of the
application of labor laws in Bangladesh, we have used both primary and secondary research techniques.
The major research techniques employed are as follows:

• Conducting phone interviews of relevant personnel (Owners, top level HRM Professionals to mid level
supervisors) at select RMG industries regarding the existing labor management practices and the
prominence and effectiveness of labor unions and labor laws.
• Distributing detailed, standardized questionnaires to quantitatively analyze the attitude and beliefs of
15 workers towards labor management relations and labor rights.
• Examining various online and newspaper articles, journal research papers and other secondary sources
to supplement primary research data.

1.5 LIMITATIONS

The limitations of our research include the following:

• Our report focuses on solely on labor management practices of the RMG sector in Bangladesh, and thus
the results may not represent state of Labor Management as whole.
10
• Our sample size of five companies may not be sufficient to analyze the state of labor management in
the RMG industry. Thus our analysis may not be a fair representation of the industry.
• Our research was conducted mainly through phone interviews and questionnaires. Thus if people were
untruthful our biased with their answers, this would sufficiently effect the conclusion we have reached
from the given data.
• The amount of time within which we conducted our research was limited, and as such did not allow us
to research the current labor management practices extensively. This would have affected the quality
of our work.

Human Resource Management is a fairly new subject to us. Our limited knowledge and understanding of
this topic has made an accurate analysis fairly difficult.

11
 PART I - LABOR RELATIONS: THEORETICAL PERSPECTIVE

Labor relations is the field that emphasizes skills managers and union leaders can use to minimize costly
forms of conflict (such as strikes) and seek win-win solutions to disagreements with labor force. Labor
relations involve three levels of relations:

Each of the three levels of relations is briefly discussed below:

2.0 LABOR RELATIONS STRATEGY

For management the decision involves whether the organization will work with unions or develop/maintain
non union operations. The decision is influenced by outside forces such as competition, public opinions etc.
First of all, let us define unions.

Union: A union is an “organization” formed for the purpose of representing their members’ interest in
dealing with employers. Workers can establish unions within the organization they work in. Unions
independent from the organization also exist. Independent labor unions like National Garment Workers
Federation (NGWF) in Bangladesh usually represent labors from a large number of organizations. Unions
can be industry specific or non-industry specific, i.e. ones that represent workers working in different
industries.

Many organizations have avoided unionization. In most cases, the managements of those organizations
have provided satisfactory wages, working conditions, and job security for their employees. Other
management practices that decrease the likelihood of unionization include creating a procedure for
handling employee complaints, eliminating arbitrary and heavy-handed management and supervisory
practices, establishing a meaningful system of two-way communication between management and
employees, eliminating threats to employees’ job security, and making employees feel like they are part of
the organization.

However, unionism still does exist in some organizations. Why do employees join unions?

There are two reasons why employees join unions:

• First there is a gap between the pay benefits and other conditions of employment that employs
actually received versus what they actually believe they should receive.
• Second, if such a gap exists and is sufficiently large to motivate employees to try to remedy the
situation using union membership as the most effective and instrumental means of change.
Advantages of unionization from the perspective of both members and employers are discussed below:

Member’s Perspective:

• Wages and Benefits: Unions act as a collective bargaining agent for the employees with a company.
Although the success of unions have been limited in recent years, union leaders contend that they have
prevented deeper erosion and singling out of workers for cuts.
12
• Job Security: Provision for job security continues to be an important issue for union members. In an
era when long term employment is no longer assumed due to the economic turbulence since 1970s,
unions have shifted their focus from increased wages to guaranteed job security, two-tiered wage
systems, easing of work rules, etc. A relatively new approach to the job security issue has been for
unions to become more actively involved in mergers and buyouts.
• Training and Development: Many Unions are instrumental in the training of their membership. They
often provide apprenticeship programs to develop highly skilled workers. As plant closedowns continue,
industrial unions will need to be more involved with the company in helping their members to be
retrained for new jobs requiring new skills.
• Social Affiliation: Unions offer important social affiliation for their members to provide a sense of
community and help to avoid alienation caused by the work routine. Unions often sponsor social events
and involve members in the community.
• Political influence: Unions often support political issues or causes. In recent years, labor has
advocated more mandated benefits (e.g. guaranteed medical insurance, higher minimum wages, and
time off for family emergencies) and it is more efficient to seek these benefits on a national scale. Thus
unions may build coalitions with political and social advocacy groups that may share some or all of its
views on certain issues.

Management’s Perspective

Management has resisted unionization and has viewed it as a limitation of management’s power and
discretion. Management resistance can be either Union suppression or Union Substitution.
Union Suppression is management tactics, legal and/or illegal, to keep a union out of a company.
Union Substitution is the management’s creation of progressive and proactive HR policies so that
employees will not want to unionize. e.g. high wages, complaint-resolution systems, participation plans,
etc. However, the advantages of unionization for the management are:

• Reduced Number of Negotiations: Once a contract is negotiated with the union, managers need
not worry about being approached by individual workers for raises or special benefit considerations.
This provides greater accuracy in forecasting costs. Also, if a dispute does occur, the company only
has to deal with the union representative(s). Negotiations proceed as outlined in the contract, which
also makes the results fairly predictable.
• Specification of Work rules, disagreements and grievances: A union contract can clearly define
work rules and guidelines for settling disagreements and grievances. If a worker disagrees with the
actions of the management that fall within the guidelines, the worker must take that up with the union
steward. This may reduce the information-processing load on the supervisors and the HRD.
• Efficient Communication and Enforcement of Predictable standards: Communication can be
facilitated by a union contract. The company communicates with the union, and the union
communicates with the members. The contract spells out communication procedures, and thus the
total number of channels is reduced. This may eventually benefit management as well. Unions can be
the source of highly qualified, well-trained and disciplined workers who help maintain productivity and
high standards. One advantage to the management is the ability to hire only for the duration of the
project. The company is assured adequately trained employees and does not have to permanently
employ in slack demand phases.

3.0 CONTRACT ADMINISTERING

13
These decisions involve day to day activities in which union members and the organization’s managers
may have disagreements. Issues include complains of work rules being violated or workers being treated
unfairly in particular situation. A formal grievance procedure is typically used to resolve these issues.

4.0 CONTRACT NEGOTIATING

Contract negotiations in a union setting involve decision about pay structure, pay security, work rules,
work place safety and many other issues.

4.1 THE NEGOTIATION PROCESS

Richard Walton and Robert Mckersi suggested that labor management negotiations can be broker into four
sub processes:

1. Distributive bargaining: focuses on dividing fixed economic “pie” between two sides, for example, a
wage increase means a union gets a larger portion of the pie and management gets a smaller share.
It win-lose situation.
2. Integrative bargaining: has a win-win focus which seeks solutions beneficial to both sides, for
example, if management needs to reduce labor costs it could reach an agreement with the union to
avoid layoffs in return for union agreeing to changes in work rules that might enhance productivity.
3. Attitudinal bargaining: attitudinal structuring refers to the relationships and trust between labor and
management negotiators. Long term relationships between the two parties can have very important
impacts on negotiations and their outcomes
4. Inter organizational bargaining: it reminds us that labor management negotiations involve more
than just two parties. Within both the management and the union itself, different factions can have
conflicting objectives. Management is unlikely to be one mind about how to approach negotiations
for example, some will focus on long term employee relations while others will focus on cost control
and still others will focus on what affect the contract will have on stockholders.
4.2 MANAGEMENT PREPARATIONS FOR NEGOTIATION

1. Establishing interdependent contract objectives: the employer’s industrial relations department

needs to meet with the accounting, finance, production and other departments and set contract
goals that will permit each department to meet its responsibilities.
2. Reviewing the old contract: this step focuses on identifying provisions of the contract that might
cause difficulties by hindering the company’s productivity or flexibility or by leading significant
disagreements between the management and union.
3. Preparing and analyzing data: information on labor cost and productivity of competitor as well as
data the unions may emphasize needs to be prepared and analyzed. The union data might include
cost of living changes and agreements reached by other unions that could serve as a target. Data on
employee seniority and demographics are relevant for establishing the costs of such benefits as
pensions, health insurance and paid vacations. Finally, the management needs to know how it would
be hurt financially by strikes.
4. Anticipating union demands: recalling grievances over the previous contract, having ongoing
discussions with union leaders, and becoming aware of settlements at other companies are ways of
anticipating likely union demand and developing potential counter proposals.

14
5. Establishing the cost of possible contract provisions.
6. Preparing for a strike: if management intends to operate during a strike it may need to line up
replacement workers, increase its security and so on. If the management does not want to operate
during a strike it needs to alert suppliers and customers and consider ways to avoid the loss of their
business. This could even entail purchasing a competitor’s product in order to have something to
sell to customers. The conditions under which management is most able to take strikes are
determined by the following factors:
• Product demand-management is less able to afford strike when the demand of the product is
strong.
• Product perishability- a strike by certain kinds of employees for example trucker transporting
perishable food will result in permanent losses of revenue and thus increasing the cost of
strike to the management.
• Technology- an organization that is capital intensive is less dependent on its employees and
are more likely to be able to use supervisors or others as replacement
• Availability of replacement workers- when jobs are scarce replacement workers are more
available. Using replacement workers to operate during a strike raises the stakes considerably
for strikers who might me permanently replaced,
• Multiple production sites and staggered contracts: it permits employers to shift production
from the struck facility to facilities that, even if unionized, have contracts that expire at
different times (so they are not able to strike at the same time).
• Integrated facility: when one facility produces something that other facilities need for their
products, the employers are less able to take a strike because the disruption to production
goes beyond a single facility.
• Lack of substitute for the product: a strike is more costly to employers if customers have a
readily available alternative source from which to purchase the good or services the company
produces.
1. Determining strategy: decisions must be made about the amount of authority that the negotiating
teams will have, for example, on which issues it can compromise and which issues it cannot.

5.0 significant
1. Strikes: strikes impose LABOR RELATIONS OUTCOME
costs on union members, employers and society.
2. Wages and benefits: unionized workers receive than their non union counterparts.
3. Productivity: unions are believed to decrease productivity in 3 ways
• The union pay advantages causes employers to use labor and more capital per worker than
they would otherwise, which reduces efficiency across society
• Union contract provisions may limit permissible workloads, restrict the tasks that particular
workers are allowed to perform and require employers to use more employees for certain jobs
than they would otherwise
• Strikes and slowdowns result in lost production.
Unions can have positive effect on productivity as well:
• “Voice” – refers to communicating one concerns to management and exit refers to simply
leaving the company to work for a better employer. Unions are believed to increase the
effectiveness of voice mechanism and this in turn is likely to reduce employee turnover and
associated costs.
• Unions can increase productivity through their emphasis in using seniority in pay, promotion
and lay-off decisions. Although Management typically prefers on rely on performance in such
decisions, using seniority has a potentially important advantage-mainly it reduces competition
15
 among workers. Hence senior employees are less reluctant to share their experience with
newly hired as they have less fear regarding job security.
• Introduction of union may have a shock effect on management, pressuring it into tightening
standards and accountability and paying greater heed to imply employee input in design of
management and production.
1. Profits and stock performance: Even if unions do raise productivity, a company’s profiles and
stock performance may still suffer if unions raise costs e.g. wages, or decrease investment by a
greater amount. Recent studies find that unions have a large negative effect on profits and that
union coverage tends to decline more quickly in firms experiencing lower share holder return,
suggesting that some firms become more competitive partly by reducing union strength. Similarly,
on recent study finds that each dollar of unexpected increase in collectively bargained labor costs
results in a dollar reduction in share-holder wealth.

6.0 CONCLUSION

Thus organizations should develop labor relations strategy considering the issues discussed above. We do
not want to take sides for or against unionization. The trade-offs between unionization and non-
unionizations and other external influences (legal environment) should be considered before deciding the
labor relations approach.

16
N OF LABOR LAWS AND THE NATURE OF LABOR RELATIONS IN THE RMG INDUSTRY OF BANGLADE

0 BRIEF HISTORY OF READY MADE GARMENTS INDUSTRY OF BANGLADESH

With almost 76% share in the total exports from Bangladesh currently, the readymade garments (RMG)
industry of the country thrived since its existence and contributed extensively to the export oriented
growth of the country. The readymade garment industry has become the lifeline of the Bangladesh
economy. It is the source of its strength and could be the cause of its vulnerability. Too much of the
nation’s fortune is riding on this one sector. With the two million workforces it employs directly, and
another one million in linkage industries, it supports the livelihood of some 10 million Bangladeshis.

Currently, there are more than 4,000 RMG firms in Bangladesh. More than 95 per cent of those firms are
locally owned with the exception of a few foreign firms located in export processing zones. The RMG firms
are located mainly in three main cities: the capital city Dhaka, the port city Chittagong and the industrial
city Narayanganj. Bangladesh RMG firms vary in size and capacity.

Ready-made garments manufactured in Bangladesh are divided mainly into two broad categories: woven
and knit products.

The apparel manufacturers of Bangladesh export readymade knit and woven wear to 164 countries of the
world but major destinations European Union and USA account for more than 90% of the exports.

8.0 EXTENT OF IMPLEMENTATION OF LABOR LAWS IN THE INDUSTRY

8.1 CORE LABOR STANDARDS

The ILO’s standing over the context of international labor standard stems from its position as the definer
and “enforcer” of core labor standard throughout the world. “Core” labor standards are those considers so
basic and universal that according to the ILO “they apply to all people in all states – regardless of the level
of economic developments” the ILO defines four core labor standards according to eight fundamental
conventions. The major fundamental conventions are:

i) Freedom of association
ii) The effective recognition of the right to collective bargaining
iii) The elimination of all forms of compulsory or forced labor
iv) The effective abolition of child labor, including the worst forms of child labor, and
v) The elimination of discrimination with respect to employment and occupation.

8.2 BANGLADESH LABOR LAW 2006

17
Labors in Bangladesh had been waiting for a long time for a comprehensive and democratic labor law.
Previous labor laws were outdated, irrelevant and misleading. Before the Labor Law 2006, there 51 labor
laws of them 13 dates back to British period, 25 were formed when Bangladesh was part of Pakistan and
13 have been passes after Independence. A thorough review of the labor laws was required which included
present realities. More importantly a simplified labor law is required because previously among the
different laws one contradicted the other and implementations of the laws were difficult. The rationale
behind a new labor law as that it would simplify complexities of the earlier laws and its implementation can
be easier.

There have been several criticisms among workers and trade unions. Some of them include:

• Article 211 says laborers cannot striker or lock out in the new factories or foreign owned or joint
venture factories. Hence, owners can overlook logical demands of workers.
• Previously a fired worker could get his or her payment within two days; the new law increased it up to
thirty days. However, the law does recommend that the minimum wage bill will be revised every five
years.
• Article 100 says organization can extend work up to 10 hours. Though, after 8 hours, laborers will get
double payment for the rest 2 hours.
• If a factory owner done not provide 16 weeks of maternity leave and benefits, the owner will be fined
for 5000 taka. Indeed, it is profitable for the owners to pay the fine rather than several months of leave
and benefits.

8.3 EXTENT OF IMPLEMENTATION

Although, all the employers we interviewed assert that they follow all the labor laws, interview of
employees and secondary research from various articles and reports claim otherwise. Following is a list of
specific categories on which the implementation of labor laws was analyzed.

• Overtime work:

Overtime work represents one of the biggest problems. Overtime is forced, not optional; whenever factory
management decides, workers are bound to work extra
hours or lose their jobs. There is a common feeling of
deprivations and being cheated in terms of overtime pay.
Calculation of overtime is always considered fraudulent.
Workers have to accept the overtime work hours
calculated by the factory management. The workers’
impression of fraudulent practice is rooted in the fact that
when workers complete five extra hours work, the
official record book shows that they have worked only
two extra hours. This serves multiple purposes such
as apparently complying with local labor law, satisfying
foreign buyers about legitimate use of overtime and
most importantly cheating of workers’ hare- earned wage.

• Holidays and leaves:

18
In most of the garment factories, workers are forced to work 14 to 16 hours a day ignoring the labor law
that states a maximum of 10 hours per working day. Though officially Friday is supposed to be day off, in
practice most of the garment workers have to work on Friday. The workers do not get a weekly holiday or
even annual leave. The factory management does not compensate them with days off or overtime
payments. Moreover, garment workers are not aware of the legal provisions on annual leave and festival
leave with pay. If workers do not know the national labor laws concerning leave with pay, they may not
request the said leave. As a result, workers may lose their entitlement to annual leave with pay. Forced
retirement/retrenchment is a common practice in Bangladesh. Garment owners usually sack workers
without any particular reason.

• Child labor:

In August 1992 the US congress passed the Child Labor

Deterrence Act to ban the importation into the United
States of products manufactured using child labor. Also, a
memorandum of understanding on 4 July 1995 concerning
child labor in the Bangladeshi garment industry was
signed by the BGMEA, UNICEF and ILO. The BGMEA
responded by urging its member to remove under-
age workers from their workplaces in conformity with
the national Factory Act that set a minimum age for
employment for 14 years. In an ensuing climate of fear
and panic, abrupt dismissals of many thousands of child
workers began in 1993. It was reported that as many as
40000 to 50000 children were laid off. However, child
labors continue to work in several garment factories. For example, an estimated 200 to 300 under aged
children, some 11 years old or even younger are working at the Harvest Rich factory. These children are
routinely beaten, cheated of their wages by the factory management. Moreover, children are victims of
force overtime, excessive production goals and unhealthy working conditions. And one daring to ask for
their proper pay or that their most basic legal rights be respected can be attacked and fired. Before U.S
corporate monitors arrive for factory inspections, the children are either sent home, if there is time or
quickly hidden in the dirty bathrooms, the emergency stairwells or on the roof.

• Gender discrimination:

Legal provisions demonstrate specific rules for the

employment such as Women shall have equal rights with
men in all spheres of the State and of public life. The law
prohibits discrimination; however, the government does not
strongly enforce laws aimed at eliminating discrimination.
Investigations have shown that many factories do not pay
some female operators the same wages as their male
counterpart, though they had the same years of service and
were doing the same job.

19
 • Health and safety measures:

In the law, under the heading of Health and Hygiene the

law articulates cleanliness; disposal of wastes and
effluents; ventilation and temperature; air pollutants;
overcrowding; lighting; drinking water; latrines and urinal;
fire safety; welfare. In many garment factories there is
no written policy or guidelines on safety and health, no
health education program. Managers and supervisors do not
know their responsibilities of safety and healthy. Safety
and health rules are not communicated to the workers. There
is no system in place to consult workers on safety and
health issues. There are usually no safety signs, posters or
notices at the workplace. Moreover, factories do not
keep record of work related accidents. One of the workers interviewed revealed that she missed a day to
go to the doctor, her manager then deducted two days’ pay and she lost her full attendance bonus. On
return she was told to do an extra eight hours of unpaid work to catch up with her target.

8.4 EFFECTIVENESS OF INDUSTRIAL INSPECTORS

While labor administration does exist in Bangladesh, they are neither efficient nor updated. An effective
labor administration system is necessary in order to maintain and strengthen a developed labor market in
the country. The government’s Factory Inspection Office under the directorate of labor is responsible for
overseeing if the factories have been built as per rules and if they have got the essential safety measures.
Enforcement by the Labor Ministry’s industrial inspectors is weak, due to both the low number of labor
inspectors and endemic corruption and inefficiency among inspectors. The Bangladesh Department of
Labor and Inspectorate of Factories said to be lacking ‘sufficient resources, staff and logistical support to
adequately perform the task of monitoring labor laws. There are allegations that garment producers keep
their garment factories outside labor inspection by bribing labor ministry officials.

9.0 LABOR RELATIONS PRACTICES IN THE INDUSTRY

The labor relations practices in the industry are very controversial. Poor labor relations have been
constantly reflected in some of the demonstrations of the highest form of class struggles over the past few
years.

9.1 TRADE UNION PROVISIONS UNDER LAW:

According to the rights of association with trade unions, the industry can be divided into two parts:

9.1.1 Factories outside the Export processing Zones (EPZs):

The Constitution provides for the right to form or join unions. There are many restrictions, however. Before
a union can be registered, 30 per cent of workers in an enterprise have to be members and the union can
be dissolved if its membership falls below this level.

20
Membership provisions: Membership in a union is restricted only to workers currently working at an
establishment, meaning that severance from employment also results in the end of a worker’s
membership in the union.
Right to strike not recognized: The right to strike is not specifically recognized in law. Three quarters of a
union’s members must agree to a strike before it can go ahead. The government can ban any strike if it
continues beyond 30 days (in which case it is referred to the Labor Court for adjudication), if it involves a
public service covered by the Essential Services Ordinance or if it is considered a threat to the national
interest. In this last case, the 1974 Special Powers Act can be used to detain trade unionists without
charge. The government may ban strikes for renewable periods of three months. Sentences of up to 14
years’ forced labor can be passed for offences such as "obstruction of transport".
Strikes are not allowed in new establishments either owned by foreign investors or established as joint-
ventures in collaboration with foreign investors for a period of three years from the date the establishment
begins commercial production.
Compulsory conciliation and court referral procedures: The labor law requires that parties to an industrial
dispute must follow procedures (such as request conciliation, serve notice of a strike or lock-out, or refer
the dispute to the Labor Court for settlement) within a specified period or the labor dispute will be
considered legally terminated. The issue or subject of an industrial dispute which is terminated in this
manner cannot be raised for a calendar year after such termination.

Collective bargaining limited: Only registered unions can engage in collective bargaining, and each union
must nominate representatives to a Collective Bargaining Authority committee, which is subject to
approval by the Registrar of Trade Unions. The National Pay and Wages Commission, whose
recommendations are binding, sets public sector workers’ pay levels and other benefits.

9.1.2 Factories in the EPZ:

The EPZ Trade Union and Industrial Relations Bill 2004 provided for the formation of trade unions in EPZs
from 1 November 2006.The law foresees the phased introduction of freedom of association, providing for a
different type of workers’ organization at each stage.
Stage one – Worker Representation and Welfare Committees: Until the end of October 2006, workers in
Bangladesh’s EPZs were still operating under the first stage of the law. They were only allowed to set up
Worker Representation and Welfare Committees (WRWC). The law requires all enterprises in the EPZ to
have one WRWC, whose elected representatives have the power to negotiate and sign collective
agreements on a limited set of topics but not to strike or organize demonstrations. However, workers
and labor activists in Bangladesh reported that in 2006 employers generally refused to enter negotiations
or sign an agreement with a WRWC.
Under the law, all WRWCs were supposed to cease to exist on 31 October 2006, unless the employer gave
an explicit agreement that the WRWC should continue
Stage two – Workers’ Associations: The second stage of the law provides that a trade union, referred to as
a Workers’ Association (WA) in the law, can be organized provided over 30 per cent of the workforce
requests that the association should be set up. More than 50 per cent of the workers in the factory must
vote affirmatively for the WA to be formed.
This was scheduled to start on 1 November 2006 but in practice there were significantly delays, notably
because the Bangladesh Export Processing Zone Authority (BEPZA) did not provide the necessary forms for

21
applying to set up WAs. In new enterprises that start operations after 1 November 2006, workers are not
permitted to form an association for the first three months after the commencement of commercial
activities.
Only one federation can be formed per EPZ, and over 50 per cent of the registered WA in the zone must
vote to affiliate before a federation can be formed.
The BEPZA Executive Chairman also has almost unlimited authority to deregister a Workers’ Association,
should he determine that the WA has committed an "unfair practice", contravened any part of the WA’s
own constitution, violated any aspect of the EPZ Law, or failed to submit a report to him. Essentially, the
law has made illegal the right of workers to talk about unions in their workplaces or to engage in pressure
tactics to persuade recalcitrant employers to sign a collective agreement.
Finally, the law explicitly forbids any strikes in the EPZs until 31 October 2008.
9.2 TRADE UNION RIGHTS IN PRACTICE: THE REAL PICTURE
The trade union movement is relatively weak in RMG industry of Bangladesh. This is partly owing to the
multiplicity of trade unions and partly owing to the considerable intimidation imposed in practice,
especially workers’ fear of losing their jobs should they show any sign of union activity. The right to
freedom of association and to collective bargaining at the workplace is not respected in the garment
sector. Where unions do file applications for recognition, their registration is often delayed long beyond the
60 days foreseen by law.
9.2.1 List of Trade Unions in Bangladesh
There are 4 registered and at least 10 other unregistered trade unions and union federations in
Bangladesh. However, only a few are active. Given below is a list of some of the trade unions and union
federations:
• Bangladesh Free Trade Union Congress (BFTUC)
• Bangladesh Ganotantrik Sramik Federation
• Bangladesh Jatio Sramik League
• Bangladesh Jatiyo Sramik Jote
• Bangladesh Jatyatabadi Sramik Dal
• Bangladesh Labor Federation
• Bangladesh Mukto Sramik Federation (BMSF)
• Bangladesh Sanjukta Sramik Federation
• Bangladesh Trade Union Kendra
• Jatio Sramik Federation
• Jatyo Sramik League
• Samajtantrik Sramik Front
• Bangladesh Independent Garment Workers Union Federation (BIGUF)
• Bangladesh Garment & Industrial Workers Federation (BGIWF)
• National Garment Workers Federation (NGWF)
9.2.2 Backward Nature of Trade Unionism in the Industry

22
It goes without saying that the structure of ownership and management determines both the structure of
trade unions and the mechanisms for resolving industrial disputes. In the emerging formal private sector of
Bangladesh, particularly in the field of RMG industries, the owners, who generally tend to be patrimonial as
a class, still try to resolve industrial conflicts through autocratic and unilateral decisions. One reason for
this could be a historically sustained inbuilt authoritarianism in all spheres of Bangladesh’s entrepreneurial
class. The earlier dominance of the semi-feudal and large land owners has influenced the attitudes of most
of the industrialists of Bangladesh in their dealings with subordinates and workers.

Moreover, backward, docile and timid nature of the migrant rural women workers are the major constraints
forming labor unions and launching labor movements in the RMG sector. Because of overwhelming
majority of the rural migrants women, who have been socialized with traditional purdah system and
patriarchal values, the owners exploit these meek and docile workers absolutely.
Against such a backdrop, it is no wonder that most garment factory owners do not have a positive attitude
toward unionization in the RMG industries.

Workers who try to create a trade union are not protected before registration and are therefore often
persecuted by their employers, sometimes by violent means or with the help of the police. The names of
workers who apply for union registration are frequently passed on to employers who promptly transfer or
dismiss them, particularly in the textile sector. Even after registration, workers suspected of carrying out
trade union activities are regularly harassed. One popular ploy is to dismiss a worker for misconduct, as
they are then no longer entitled to become a trade union officer.
9.2.3 The Unionization Process and Owner’s Responses

Labor-management relations in the RMG industries are affected by a lack of mutual trust between union
leaders and owners. That is why union leaders always try to pursue their unionization process as secretly
as possible, while the garment factory owners always try to find out what the federations and garment
workers in respective factories are up to. In fact, most of the male federation leaders as well as female unit
union leaders whom we interviewed claimed that in order to remain informed of the activities of the
federations and their activists, most garment factory owners place people in crucial places both in the
factories and at the Directorate of Labor.

We had collected data from 28 unit unions to figure out at what stages and how the owners —according to
the federation and unit union leaders — came to know about the unionization processes. The table
summarizes the results:

23
Owners had employed agents’ provocateurs so that they could know beforehand which workers of their
factories were trying to form unit unions, in order to force those workers out from the factories before they
could even submit applications for registration to the office of the Registrar of Trade Unions. It was
important if they had to go for this kind of pre-emptive attack; they did so before the submission of the
application for registration, because once the application for registration was submitted, it would have
become not only more difficult for the owners to stop the process of unionization but any attempt to do so
could have also made them subject to legal prosecution for misconduct under Article 15 of the Industrial
Relations Ordinance, 1969. As Table 9 further reveals, the owners also had their informants in the office of
the Registrar of Trade Unions, who informed the owners as soon as they learned about the submission of
the applications for registration. In most cases, the owners then traced the office bearers who were
involved in the unionization process and tried to stop the process in various ways.

We were informed by federations and/or unit level leaders that in the cases that the owners were not
informed beforehand of the unionization process, either the office bearers of the unit unions or the
federations bribed officials at the Registrar of Trade Unions, or the federations had such political backing
that the officials of the Registrar of Trade Unions did not dare to disclose the information to owners. The
general response of the owners, as described to us by the federation and unit union leaders, are discussed
below:

• Verbal threats
• Physical assault
• Threatening by hired musclemen
• Filing false criminal charges on the union leaders
• Bribing the union leaders
• Fulfilling some demands of the union
The majority of our respondent owners did not agree with the information provided above. Some owners
did not contradict the authenticity of the information, but claimed that they themselves never resorted to
any such activity.

The findings clearly show that owners used all sorts of possible methods to stop the unionization process,
and also to destroy, wherever they could, the unit unions. To achieve their goals, they first tried to employ
24
pressure tactics, including verbal threats, physical assault, and intimidation through hired musclemen. If
these pressure tactics failed to bear any fruit, they tried to stop the process simply by bribing influential
federation and/or unit union leaders. When that ploy did not work, they started filing criminal charges
against union leaders so that they could harass them with the help of the police. Since most of the unit
union leaders were female and also often poor, they could not withstand such pressure indefinitely. In the
end, many unit leaders left the factories. The unions, if constituted but not yet registered, ceased to exist.
In other cases, the owners simply dismissed union leaders. It was often quite easy for owners to dismiss
union leaders because many union leaders did not have proper appointment letters, and hence no proof
that they were working in a particular factory. If the unions were registered, the owners sometimes tried to
fire union leaders with packages of three months’ wage compensation. However, in some cases where the
unions were very strong and the general workers were united, the owners either declared a lock-out of the
factories or met, at least for the time being, some demands of the workers.

9.2.4 The Owners Speak in their Defense

Irrespective of their educational, socio-cultural and economic background, most of the garment factory
owners seem to have a very negative attitude toward the existing garment federations and their affiliated
unit unions. The root cause of this negative attitude seems to be grounded in their perceptions of trade
unionism which, again, emanates from what they have seen of the activities of the trade unions in the
public sector.

We have interviewed 5 owners of randomly selected factory situated inside and outside EPZs. According to
most of our respondent owners, the Bangladeshi entrepreneur involved in RMG industries at the moment
faces a few common labor-related problems. These are:

• lack of discipline among workers

• workers not committed to productivity
• illegal and unreasonable demands placed by representatives of garment workers
• an unfavorable labor code that specifies privileges but does not spell out duties of workers
• politicization of trade unions
• multiplicity of federations and unit level unions and consequent rivalries between them

Under these conditions, according to some of our respondent garment factory owners, the
situation is not yet ripe to allow full fledged unionism in a nascent industrial sector like RMG.
However, 2 of our respondent owners claimed that they would have no objection to unit unions if they were
formed independently, and not through what they called the instigation of outsiders or “professional trade
unionists”. But before these unions are formed, the workers must be properly educated
regarding existing labor laws, basic rights, and inalienable obligations so that they cannot
easily be manipulated by “professional unionists” with vested interests. These owners suggested
that NGOs might like to develop awareness-building programs for female garment workers which could
provide education about their legal rights.

Most of our respondent owners refuted the allegations of the federation and unit union leaders that they
resorted to all kinds of intimidation tactics to sabotage the unionization process in RMG industries. Rather,
they mentioned the preoccupation of the garment workers, and their high turnover rates as the two most
important factors hindering the process of unionization. As far as existing labor management relationships
in the garment industries are concerned, most of the owners indicated that they maintained contacts with
25
the general workers primarily through the floor supervisors and/or production managers. Only two owners
claimed that they sat with the workers in general meetings at least once a month. Two other owners
claimed that they always encouraged the general workers to come to them, with prior appointments,
whenever necessary.

ISSUE POSITIVE RESPONSE NEGATIVE RESPONSE

Should full-fledged trade 2 3
unionism be practices in the
industry?
Are union leaders harassed 0 5
inside the factory?
Do harassment practices 5 0
prevail in the industry?
Does effective 5 0
communication system exist
between workers and
managers?
Total number of respondents: 5

Regarding the linkage of wages with labor productivity, most garment factory owners opined that the RMG
industries’ capacity to pay the workers a minimum wage should be linked to their profitability, which,
again, depended on the prices of their products relative to material input prices, and on labor productivity
trends.

9.2.5 The Role of Labor Unions in Ensuring Labor Rights

The trade unions of Bangladesh are ineffective in the application of their objectives. The leaders of the
trade unions are corrupt; making it is impossible for the trade union leaders to do some welfare for the
general labor. This is due to the fact that almost all the CBA leaders have an open secret understanding
with the owners of the establishments, which lead them to the uninterrupted corruption and irregularity.
The CBA leaders seldom see the interests of the labor. The monthly subscriptions given by the labor are
not used for their welfare. It is just used for the personal purpose of the leaders of the trade unions. Due to
pressures from the trade union leaders, the workers are working hard, but they are not getting
remuneration accordingly.
Many female unit union members are happy with the idea of delegating their right to negotiate to the
federation leaders. In fact, this has remained the most controversial aspect of federation unit union
relations. On the one hand, most female garment workers feel technically too weak to negotiate, both
individually and through their unit unions, because owners are often quite autocratic and patrimonial in
handling industrial disputes. Female garment workers thus welcome the intervention of federation leaders
on their behalf in disputes with the management, both in bipartite negotiations and extended conciliation,
as well as compulsory adjudication. On the other hand, many female garment workers and unit union
leaders confessed to the author that they are apprehensive about some male middle-class federation
leaders, who might be pursuing their own interests rather than pursuing the interests of the female
garment workers and their unit unions. Some garment factory owners have labeled some federation
leaders as “trade unionist brokers” who “milk” both sides — the RMG workers and/or their unit unions and
the owners — in the name of solving industrial disputes. According to them, in times of industrial conflicts,
some of these federation leaders take money from the owners to “buy off” the prospective male
26
troublemakers among the garment workers (interestingly, most of the owners have confessed to the
author that it is much easier to bribe a male leader than a female one). At the same time, they also try to
squeeze money from mostly female workers by promising them protection from harassment from
members of the law enforcing agencies or the hired musclemen of the owner.

Reasons for corruption in trade unions

• The labor of Bangladesh is mostly illiterate. It makes them insecure and weak to fight against the
corruption and ill practices.
• Most of the laborers of Bangladesh do not know that, specifically for them, there is a law in
Bangladesh named Bangladesh Labor Act, 2006. For the ignorance of trade union laws they cannot
fight against the violation of their rights.
• Section 187 of the Bangladesh Labor Act, 2006 provides “no President, General Secretary, or
Treasurer of any trade union shall be transferred from one district to another without his consent”.
This section is a great weapon, which is manipulated by trade union leaders. By abusing this
provision trade union leaders have the opportunity to stay in the same establishment and be
connected with the local politics.
• In the third world countries most of the laborers are so poor even they cannot live their lives hand to
mouth. CBA leaders give them job in an industry requesting the owners with their influential powers.
Usually, the labor gets the job by the CBA and never dares to speak against the leaders though he
does many violation of trade union right of the labor.
• The owners always want the labor to work hard and gain profit. So, they use the trade union leaders
as a weapon. When the labor gets heavy workload but does not get the expected remunerations,
they usually go to the trade union leaders for the assurance of justice. In this situation the CBA
leaders never speak on behalf of the labor as by then they have already taken the bribe from the
owners to not fight for the labor right.
• The Bangladesh Labor Act provides that the inspectors will have the right to inspect the trade union
activities, but inspectors seldom go to do it. Even if they go, the trade union leaders bribe them so
that they never speak against the irregularities of the trade union.
• Lack of experienced and educated leaders among the labor is another reason of malpractice and
corruption.

ONSEQUENCES OF POOR LABOR RELATIONS AND VIOLATION OF LABOR LAWS

The low minimum wage set by government and violation of labor laws on top of that have compelled the
garments factory workers to look for ways to stand up for themselves. Their urge of join unions is further
thwarted by the restricted legal provisions and threats from the employer. The rest is history. Past is the
witness of several strikes and vandalism attacks led by thousands of garments workers and union leaders
to protect their rights. Loss of lives, destruction of valuable property and above all tarnished reputation of
the industry in front of the international buyers-all these have threatened the existence of the country’s
economic lifeline, the industry itself.

POORLY
LOW
RESTRICTED
VIOLATION
GAP
EMPLOYER’S
URGEBETWEEN
OFWAGE
LABOR
OF
CONSTRUCTED
TRADE
LABOR
NEGATIVE
RECEIVED
SET
TO JOIN
UNION
BYUNIONS
LAWS
ATTITUDE
MINIMUM
LAWS
AND
TOWARDS
EXPRESSION
EXPECTED
WAGE
UNIONS
POLICY
WAGE AND
OF POOR
AND
GRIEVANCE
GRIEVANCE:
BENEFITS
PROCEDURES
STRIKESAND
AND
QUALITY OF WORK LIFE
VANDALISM

27
We have analyzed 15 incidents of strikes and vandalism by the garments workers in Dhaka and its
outskirts. These incidents took place between January 2006 and May 23, 2010. The sources of the
information are various daily newspapers- The Daily Star, Financial Express, etc. There were two important
findings:
The turmoil is more prevalent in the knit sector rather than the woven sector: Sweater is the
fastest growing segment within the garment industry, growing over 30 per cent a year in the last five
years. Sweater factories are to blame for festering labor unrest in the country's US$11 billion garment
industry, as four out of five violent wage protests had their origins there. According to a report published in
daily star in May 26, 2009: 16 out of the last 20 violent unrests in the garment factories had their
origins in sweater plants.

Source: Government’s factory Inspection department.

The department also found that 15 per cent of 825 garment factories it surveyed between January and May
don't pay wages in time. At least eight of them don't pay the basic minimum wage of Tk1662.50 per
month. (Source- The Daily Star, Wednesday May 26 2010).

Six root causes led to the protests: Our analysis revealed the following 6 root causes of protest: The
workers had multiple reasons behind each of the incidents. The frequency of the 6 root causes in the 15
incidents is plotted in the graph below. The two red bars represent the two primary root causes.

1. Wage cuts: When the global recession led to shrinking apparel demand, many RMG factory owners
unscrupulously resorted to wage cutting practices. Since the beginning of the global recession late
last year, some 200 sweater factories have cut rates by 20-30 per cent. The situation has become
very explosive. The workers who used to earn as high as Tk12,000 are now being paid at Tk7,000,
despite toiling same amount of hours

28
2. Demand for pay raise: This has been one of the primary reasons of Country Wage(US
wave of fierce class struggle in the Bangladesh garment industry over cents) /hr
the last five years. As inflation rose and cost of living rose to almost
unaffordable heights, the minimum wage policy has done little to Banglade 22
alleviate the pain workers go through in matching income and sh
expense. A recent global survey of the world’s garment industries by Cambodi 33
the US-based consulting house, the Jassin-O’Rourke Group, shows the a
following wage disparity shown in the table. It, however, pointed out
that if productivity is considered, Bangladesh lags behind as Pakistan 37
productivity here is only 42 per cent compared to more than 70 per
Vietnam 38
cent in China and around 60 per cent in India. Productivity is not only
the worker’s responsibility; it depends on uninterrupted and well- Sri Lanka 43
managed production flows which are designed and implemented by
the managers and entrepreneurs,’ said a top official of another Indonesi 44
Europe-based buying house. a

India 51
3. Demand for wage payments in arrears: There were 7 incidents in
which workers protested demanding their pay that had been in China 86
arrears for 2 to 3 months. According to the labor law, every worker
should be paid his or her wages within the 7th of the following month. Philippin 107
The so-called “Good” factories pay the wages on the 7th day of the es
following month. But many factories pay the wages at 10 or 15 day of Malaysia 118
the following month.

4. Demand to shorten working hours: According to law and international standards, women should
not be made to work after 8 pm but, at times, they are asked to work until 10 pm or 11 pm.
Sometimes they even work the whole night.

5. Demand for perks and other benefits: These include demands for raise of attendance bonus,
demands for meals during overtime, etc.

6. Demand for the dismissal of supervisor: Ill treatment and harassment by supervisor is
prevalent in the industry. Lack of proper grievance procedures made workers come out in the
streets demanding dismissal of such supervisors.

29
 11.0 CONCLUSION

The salient points that emerge from the foregoing discussion are: 1) in Bangladesh, industrial conflicts in
the private sector, particularly in the RMG industries, have so far been resolved through autocratic and
unilateral decisions of garment factory owners; 2) there has not been a healthy growth of trade unionism
from within the RMG industries, 4) labor laws are generally observed by a significant number of employers
in the garment industries, and in some cases the laws themselves have become outdated and hence
inadequate.

Therefore, for many of Bangladeshi garment factory owners, being competitive has so far meant being
“cost effective”, mainly by lowering labor standards and taking advantage of opportunities for low-wage
employment due to the abundance of a young female labor force. As a consequence of their economic
priorities, many of them have become virulently anti-trade union because, according to them, as “market
distorting entities” trade unions would not only raise production costs and create industrial disorder, they
would also eventually offset Bangladesh’s comparative advantage by dismantling the low-wage
employment structure of the female labor force.

Contrary to their arguments, there is also clear correlation between unionization and productivity. In an
example from the industrializing economies, Standing has found that in Malaysia the unions have
contributed both to productivity enhancement and a narrowing of the gender gap in wages (Standing,
1990). Unionization and on-the-job training can also be helpful in checking high labor turnover in the RMG
industries. There is evidence from Malaysia that unionized firms had working environments that
encouraged trained workers to stay and to undertake further training and productivity improvement
(Standing). With this example in mind, it can be argued that the time has now come for the garment
factory owners in Bangladesh to look at the issue of unionism from a different angle.

30
APPENDIX

31
 INTERVIEW WITH EMPLOYERS

Company profiles:

Shanta Garments - Shanta Garments Ltd. is a sister

concern of Shanta Group, based in Bangladesh with
sustained goodwill and expertise in exports oriented
ready-made garment manufacturing. It principally
focuses on producing woven tops and bottoms, and has
a production capacity of about 15000-18000 units,
depending on the style. It is located in the Export Processing Zone (EPZ) area.

SF Fashions- Located in Narayanganj; SF Fashions produces shorts,

trousers and skirts for export. It operates its divisions according to the
various lines of garments it produces.

Goldstar Group of Companies- Established in 1992, Goldstar

Group of Industries produces and exports high quality apparels to
mainly US and European markets.

Opex & Sinha Textile Group- One of the major players in the RMG sector,
Opex & Sinha Group has been producing export-oriented products from their
Narayanganj based factory for over several years. Recently, the company was at
the receiving end of some bad publicity due to worker strikes, clashes with
security guards and the resulting injuries to employees.

Floret Fashion Wears (Pvt.) Ltd. - It is a 100% export

oriented garments manufacturing Industry, started its
operation in the year 1997. With hard work, sincerity and
commitment "Floret fashions wears (Pvt.) Ltd." has earned
its remarkable goodwill & reputation in the market and expanded successfully
day by day. This factory is located at 315/B, Tejgaon Industrial area. Mainly our
products are children wear. Its employees are regularly updated and provided
with training, as the company believes continuous improvement.

Employer Interview Questions

Name of the Company: Shanta Garments (in EPZ)

Q1. Does the company abide by the labor laws?

Yes, it does. It strictly abides by the laws applicable for garments in the EPZ.

Q2. Is there trade (labor) unions existing within the company’s

employees?

No there is no trade union. The worker’s association (WA) in EPZ is there to

represent the interests of the garments workers in EPZ. 15 members from each
company are selected and they are registered in WA as the representatives of
the rest.

Q4. Do the union leaders face ill treatment and harassment? Do you
agree that such practices are prevalent in the industry?

I do agree that such practices do agree but we do not support or entertain any of
these.

Q5. What problems might the company face if it does have trade
unions?

The workers might take undue advantage if allowed to have full-fledged trade
unions. Frankly speaking, no employer will be able to run factories profitably if
there are trade unions. For example, the minimum wage rate is $20, we provide
here $ 30, even then they nag about wages. Workers need to be properly trained
regarding issues of professional collective bargaining. Then I would have no
problem with unions.

Q7. What harm to the reputation does a company face from outside
buyers if it does not implement trade unions?

Outside buyers want assurance that the workers are able to represent
themselves to the management. This is done so by the WA. Therefore, the
foreign customers have no complaints.

Q8. What differences exist between unionized and non-unionized

companies?

I believe there is little difference because we pay our workers as much as any
other company in the industry.

Q9. Are disruptions to production caused as a result of union impacts?

No disruptions, thankfully, so far.
 Employer Interview Questions

Name of the Company: FS Fashions, Narayanganj

Q1. Does the company abide by the labor laws?

It does.

Q2. Is there trade (labor) unions existing within the company’s

employees?

No there are no trade unions. One person of each line (a line consists of a
number of machines) is selected and the entire line representative talk to the
management about their problems and demands every month.

Q4. Do the union leaders face ill treatment and harassment? Do you
agree that such practices are prevalent in the industry?

I do agree that such practices do agree but we do not support or entertain any of
these.

Q5. What problems might the company face if it does have trade
unions?

Trade unions in our country might do more harm than good. They might often
become the means for a clever few politically inspired people to do their bidding
rather than voice employee rights. In fact, that is what has been happening in
our country in other areas.

Q7. What harm to the reputation does a company face from outside
buyers if it does not implement trade unions?

Outside organizations are often concerned about the rights of labor within the
companies in our country as we are often labeled as a source of cheap labor.
However, we have employee associations within our country who can present
the rights and demands of the workers to management. So, we have not faced
any pressure from outside organizations regarding this matter. And buyers are
usually satisfied with this information as well. They are principally interested in
cost and time issues.

Q8. What differences exist between unionized and non-unionized

companies?
All workers, regardless of union membership status, are paid a standard rate,
often more than that including overtime. So, little difference exists regarding
this.

Q9. Are disruptions to production caused as a result of union impacts?

Last week, employees gathered in a strike with some demands regarding wage
increase and behavior of 3 supervisors. Their demands were fulfilled and the 3
supervisors were dismissed.

Employer Interview Questions

Name of the Company: Goldstar Group of Companies

Q1. Does the company abide by the labor laws?

Yes of course.

Q2. Is there trade (labor) unions existing within the company’s

employees?

No there is no trade unions because the workers of the company have not
demanded so.

Q3. If not, then who is the labor representative?

There is a workers participation committee who represents the labor problems.

The main form of problems is basically physical and verbal abuse by the factory
supervisors of the workers. I have a kind of open door policy here. The
representatives can come and talk to senior HR managers about their problems
with prior appointment.

Q4. Do the union leaders face ill treatment and harassment? Do you
agree that such practices are prevalent in the industry?

I do agree that such practices do agree and some supervisors may resent such
leaders due to fear of strikes but we see to it that no harassments are inflicted
on the leaders.

Q5. What problems might the company face if it does have trade
unions?

As we know, garments workers frequently cause many problems to production

such as strikes. If there are representative bodies, they will put up further
obstruction in an organized way. Also, they may create political affiliations and
use it as leverage when bargaining.

Q6. What problems might the company face if it does not have trade
unions?

Often foreign bodies regard a lack of unions as an indication of low labor rights.
But that can be countered with worker associations.

Q7. What harm to the reputation does a company face from outside
buyers if it does not implement trade unions?

Outside buyers want assurance that the workers are able to represent
themselves to the management. This is done so by the worker participation
committee. Therefore, the foreign customers have little complaints.

Q8. What differences exist between unionized and non-unionized

companies?

I believe there is little difference because we pay our workers as much as any
other company in the industry.

Q9. Are disruptions to production caused as a result of union impacts?

No disruptions, thankfully, so far.

Employer Interview Questions

Name of the Company: Opex & Sinha Textile Group

Q1. Does the company abide by the labor laws?

Every company has to abide by the labor laws.

Q2. Is there trade (labor) unions existing within the company’s

employees?

No formal unions.

Q3. If not, then who is the labor representative?

There is an association that acts the purpose of trade unions.

Q4. What is the impact of trade (labor) unions in the company? (Both
beneficial and problematic)
Outside trade unions have spread rumors about our company to defame our
image. So far, beneficial aspects of trade unions are yet to be seen.

Q5. What problems might the company face if it does have trade
unions?

None.

Q6. What problems might the company face if it does not have trade
unions?

So far we have faced no problems because we do not have a trade union.

However, if the workers demand so, we will think about it.

Q7. What harm to the reputation does a company face from outside
buyers if it does not implement trade unions?

As said above, unions are of concern mainly to foreign buyers as they feel
workers’ rights are not being represented if unions are not present. However,
this misconception is cleared in detailed personal meetings and examination of
relevant documents.

Q9. Are disruptions to production caused as a result of union impacts?

There have been a few major disruptions, but mainly due to personal grievances
rather than union impacts. Also, activities of outsiders and politically motivated
people caused strikes that led to little image problems of the company. But
those situations have been resolved peacefully in the end.

Employer Interview Questions

Name of the Company Floret Fashion Wears (Pvt.) Ltd

Q1. Does the company abide by the labor laws?

Yes.

Q2. Is there trade (labor) unions existing within the company’s

employees?

No.

Q3. If not, then who is the labor representative?

There is a workers participation committee who represents the labor problems.
But it does not need to be active that much because we take care of our
workers.

Q4. What is the impact of trade (labor) unions in the company? (Both
beneficial and problematic)

Q5. What problems might the company face if it does have trade
unions?

As we know, garments workers frequently cause many problems to production

such as strikes. If there are representative bodies, they will put up further
obstruction in an organized way. Also, they may create political affiliations and
use it as leverage when bargaining.

Q6. What problems might the company face if it does not have trade
unions?

So far we have faced no problems because we do not have a trade union.

However, if the workers demand so, we will think about it.

Q7. What harm to the reputation does a company face from outside
buyers if it does not implement trade unions?

It might face image problems at first but after clarification of the situation with
appropriate documents and such, those are resolved.

Q8. What differences exist between unionized and non-unionized

companies?

We pay one of the highest rates in the industry, so are far better off than most
unionized and non-unionized companies both.

Q9. Are disruptions to production caused as a result of union impacts?

None.
 Employee Survey Questionnaire

PLEASE NOTE THAT THIS IS THE TRANSLATED VERSION OF THE ORIGINAL

QUESTIONNAIRE WHICH WAS IN BANGLA. FOR RESPONDENTS WHO COULD NOT
READ OR WRITE, WE HELPED THEM FILL IT UP. THE ADDITIONAL COMMENTS FOR
EACH RESPONSE WERE DULY NOTED DOWN AND USED DURING DATA ANALYSIS.

We, the students of IBA, are conducting a research on the ‘Labor Management
Relations and the Extent of the Application of Labor Laws in Bangladesh’,
especially in the RMG sector. As a part of our research, we are conducting this
survey on the employees of RMG industries to obtain their perspective on the
issue. Your cooperation would be appreciated in this regard.

Q1. Age:

<15 15-25 25-30 30-40 40>

Q2. Do you know about the specific labor laws?

_______Yes
_______No

Q3. If yes, do you think the current labor laws are appropriate in
preserving labor rights?

_______Yes
_______No

Q4. Do you feel the company abides by the labor laws?

_______Yes
_______No

Q5. If yes, to what extent does a company follow labor laws in the
following specific regions?

Criterion Excellent Good Satisfactory Poor

Overtime Work
Child Labor
Equal Employment
Holidays and Leaves
Health and safety
measures
Q6. Does the company have an employee trade union?

_______Yes
_______No

Q7. If yes, then to what extent does the union prove effective in
preserving employee rights and benefits?

Excellent Good Satisfactory Poor

Q8. If you do not belong to a trade union, do you belong to any other
worker associations? Please specify.

_______Yes (Please specify-

_______________________________________________________)
_______No

Q9. If yes, then to what extent does the association prove effective in
preserving employee rights and benefits?

Excellent Good Satisfactory Poor

Q10. Does the company encourage or discourage the forming of trade

unions?

Highly Slightly Neutral Highly

Encouragin Encouraging Discouraging
g

Q11. If the company discourages trade unions, please specify the

means it takes to do so.

Q12. In the absence of trade unions, do you seek assistance from other
outside associations for help regarding employee rights?

_______Yes (Please specify-

_______________________________________________________)
_______No

Q13. Do you feel a trade union is necessary in order to appropriately

look after labor rights?
_______Yes
_______No
-Thank you for your cooperation and time-
REFERENCES

Standing, G. (1990)Do Unions Impede or Accelerate Structural Adjustment?

IndustrialVersus Company Unions in an Industrialising Labour Market,Working
Paper No. 47, World Employment Programme Research, ILO, Geneva.

Global Wage Report 2008 / 09,Minimum wages and collective bargainingTowards

policy coherence, Geneva, International Labour Offi ce, 2008

Newspapers:

The daily independent Bangladesh

The daily star
The Financial Express

Links:

http://survey07.ituc-csi.org/getcountry.php?IDCountry=BGD&IDLang=EN
http://www.sacw.net/article889.html
http://www.nosweat.org.uk/story/2009/02/02/interview-struggle-bangladeshi-
garment-workers
http://bdnews24.com/details.php?id=159888&cid=2
www.ilo.org