Challenges and Prospects of Labour-Management Relations in the Export Oriented Ready-Made Garments (RMG) Industry: A Study in Bangladesh

Challenges and Prospects of Labour-Management Relations in the Export Oriented Ready-Made Garments (RMG) Industry: A Study in Bangladesh

Dr Mohammad Mainuddin Mollah¹, Md. Mainul Islam²

¹Associate Professor, Institute of Social Welfare and Research, University of Dhaka, Dhaka-1205.

²Principal Officer, Ansar-VDP Unnayan Bank, Head Office, Dhaka-1217.

DOI: https://dx.doi.org/10.47772/IJRISS.2024.806001

Received: 29 April 2024; Revised: 20 May 2024; Accepted: 24 May 2024; Published: 26 June 2024

ABSTRACT

The Ready-made Garments (RMG) industry is one of the most significant earning sectors in Bangladesh. It generates over 80% of the country’s total exports and provides employment opportunities for about 4.4 million people. However, the labor-management relations in this industry do not meet global standards. This research-based article focuses particularly on the labour-management relations in the RMG industry in Bangladesh. The study explains RMG workers employment and working conditions, the legal framework of labour-management relations, workers involvement with the trade unions and the existing dispute settlement and collective bargaining process in the RMG industry and their effectiveness Finally, the study finds out the opinions of the both workers and management on policy recommendations for ensuring labour-management relations in the RMG industry in Bangladesh.

Keywords: Bangladesh, Labour-management relations, Ready-Made Garment, Trade union.

BACKGROUND OF THE STUDY

A stable and harmonious labour-management relation is considered indispensable for the enhanced productivity and faster growth of economic development of a country. As an integral part of human centered management, sound human relationships and peaceful labour-management relation system can ensure employment security, develop employee skills, and encourage high working motivation, higher degree of worker commitment and participation, and most importantly high labour productivity (Ahmed, 1997). However, industries in Bangladesh face various challenges due to poor working conditions and inadequate labour-management relations. The weak industrial base and the lack of genuine democratic practices in Bangladesh have created an environment where the management easily persecutes workers and their leaders. Additionally, trade unions have become politicized, leading to rivalries within and between them. Moreover, the opportunism of trade union leaders, the absence of experienced leaders at the plant level, and unfavorable policies and laws relating to collective bargaining and trade union practices are also responsible for this situation (Faruque, 2009). One such industry in Bangladesh is the RMG sector. This industry has significantly contributed to the country’s export-oriented growth, employing four and a half million people directly and another one million in linkage industries, thereby supporting the livelihood of some ten million people. However, the existing laws governing labour rights and labour-management relations are not implemented appropriately, leading to further challenges in the sector.

The trade union movement in Bangladesh’s RMG industry is relatively weak. This can be attributed to workers’ substantial intimidation, which makes them afraid of losing their jobs if they show any sign of union activity. Unfortunately, the garment sector does not respect workers’ right to freedom of association and collective bargaining at the workplace. Although trade unions exist, they could be more effective in achieving their goals.

In 2013, the Bangladesh Labour Act of 2006 was amended to simplify the process of forming and operating trade unions (Government of Peoples Republic of Bangladesh, 2006; Government of Peoples Republic of Bangladesh, 2013) . This amendment was prompted by a tragic incident in April 2013, when a factory building collapsed and caused the death of over 1,132 garment workers (DOLEŽALOVÁ). As a result, there was an increased global demand for better labor rights and safety. The amended law now has provisions that improve labor-management relations, such as allowing the establishment of trade unions without informing factory owners. Additionally, it includes measures to resolve conflicts over legal financial rights through arbitration, ensure worker safety in their workplaces, mandate elections for workers’ participation committees, and implement compulsory group insurance policies (Government of Peoples Republic of Bangladesh, 2006; Government of Peoples Republic of Bangladesh, 2013).

RATIONALE OF THE STUDY

Labour unrest is a recurring issue in Bangladesh’s RMG sector. Unfortunately, employers disregard labour standards and workers’ rights, and leading to unfair labour practices. Forming a trade union is often resisted, including assault by hired hooligans, dismissal, and arrest that violate international labour standards and Codes of Conduct (ILO, 2003). It is essential to strengthen labour-management relations and raise labour standards to improve the situation. This can be achieved by ensuring job security, the right to form trade unions, improving wages, occupational health and safety and social security. In the garment industry, exporters of Bangladesh face significant challenge to maintain with international labour standards to maintain the quality of products and meet the expectations of the export market. Therefore, ensuring labour-management relations is an urgent need for the exporters and government of Bangladesh.

 All Bangladeshi labourers have the right to participate peacefully in public meetings or processions, subject to public interest, legal restrictions, and public health. Bangladeshi labourers also have the right to form trade unions to bargain with their employers and to exercise their rights. Article 38 of the Bangladesh Constitution ensures this right (Government of Peoples Republic of Bangladesh, 1972). In addition, Bangladesh’s commitment to promoting garment workers’ rights also involves national legislation and the ratification of several international treaties, mainly ILO Conventions. It has been reported that through the constitution, labour law and labour policy provide a favorable environment for labour-management relations. However, the scenario is different in practice. It is generally recognized that the present state of labour-management relations in the RMG industries in Bangladesh is not conducive to industrial investment and development. Without ensuring labour-management relations in the RMG, it is not possible to establish a secure and sustainable industry. This issue has attracted a lot of attention. Therefore, this study has attempted to assess the challenges and prospects of labour-management relations in Bangladesh’s RMG industries.

OBJECTIVES OF THE STUDY

The major objective of this study is to explore the challenges and prospects of labour-management relations in the export oriented RMG industry of Bangladesh. The specific objectives of the study are as follows:

1. to identify the employment and working conditions in the RMG industry of Bangladesh;
2. to explore the legal framework and actors in the labour-management relations system in the RMG industry;
3. to find out the collective bargaining and dispute settlement process in the RMG industry; and
4. finally, to provide suggestions for strengthening labour-management relations in the RMG industry of Bangladesh.

METHODOLOGY OF THE STUDY

Research Approach

The study method of the present research was a combination of field survey, FGD, observation and review of literature. Both the qualitative and quantitative data was collected in view of setting out the objectives of the study. The principal method of this study was the social survey method.

Study Area

To get representations from entire export oriented RMG industry of Bangladesh, using purposive sampling technique three major RMG intensive districts i.e., Dhaka, Narayanganj and Gazipur were chosen as the study area.

Population and Unit of Analysis of the Study

The respondents were divided into two groups; firstly, the RMG industry’s managements which include employers and management. Secondly, the RMG industry’s workers which include workers and trade union leaders in the study areas. Every single RMG worker and management was considered as the study unit of this research.

Sampling Procedure and Sample Size

To get representation from entire export oriented RMG industry of Bangladesh, using purposive sample technique, 15 RMG industries from three major RMG intensive districts i.e., Dhaka, Narayanganj and Gazipur were selected. Ten RMG workers both female and male (including one trade union leader) and two employers/management from each factory were selected, respectively. It is important to note that to collect relevant and reliable data for the greater understanding of the labour-management relations regarding RMG sectors in Bangladesh, at the time of fieldwork; the researcher purposively selected the respondents preferably from among the interested workers, trade union leaders, employers, and management in the three study areas.

Source and Technique of Data Collection

The study was designed based on both primary and secondary sources. For primary sources, a semi-structured interview, key informant interview and FGD checklist were adopted to collect quantitative and qualitative data from RMG workers and management concerning various aspects of labour-management relations in the RMG industry. Three FGDs were organized with RMG workers in the three study areas to get opinions and recommendations for strengthening labour-management relations. The semi-structured and key informant interview schedules and FGD checklist were finalized through pre-testing and primary field experiences in the study areas. The secondary sources included books, articles, and research reports. Moreover, annual reports and documents of the Ministry of Labour and Employment, Department of Labour, Department for the Inspection of Factory and Establishment, Bangladesh Garments Manufacturing and Exporters Association (BGMEA), and ILO were used for this study.

Data Analysis of the Study

Both quantitative and qualitative methods were used in the data analysis. The collected data was carefully edited to include all necessary information for this study. The emphasis was given to quantitative methods, and qualitative methods were used to supplement quantitative data. Simple statistical analysis was used to present and analyse the data, including central tendencies, dispersion, and frequency distribution. Besides, observations made by the researcher while the study areas were visited were also used in data analysis.

FINDINGS AND DISCUSSIONS

The present research attempts to understand and examine the factors affecting labour-management relations in the RMG sectors of Bangladesh. The study’s findings and discussions are presented under the following four sub-sections:

Employment and Working Condition in the RMG industry of Bangladesh.

In this sub-section previous working experience, major causes behind getting engaged in the RMG sector, recruitment process and medium of recruitment, current job category and occupational status, monthly wage and daily working hours, leave category and enjoying leave have been studied to understand the state of employment and working conditions as well as labour-management relations in the RMG industries.

Having experience provides an added advantage in securing a job and negotiating for higher pay in any organization. The present study found that out of 150 workers, most (48.67 percent) were unemployed or had no previous work experience. They were engaged mostly in household work (30.67 percent) and as students (18.00 percent). Of the workers with past work experience, 23.33 percent, 12.67 percent, and 4.67 percent were previously engaged as housekeeper servant, labourer and in small business, respectively. Besides, a considerable number of workers (10.67 percent) were previously engaged in sewing/tailoring activities.

One major aspect of employment and working conditions is determining the significant causes of engagement in the RMG sector. Table-2 presents the causes and most of them referred to poverty and low-level family income (39.33 percent), to be established as self-sufficient and self-dependent member in the society (36.67 percent), increasing economic solvency (35.33 percent), providing financial support for family (29.33 percent), and incapability of parents to continue the study (21.33 percent). The garment industry in Bangladesh has created employment opportunities for women, creating a new group of industrial workers (Kibria, 2001). Evidence shows that extreme poverty and male unemployment contributed to women engaging in the RMG sector (Mahtab, 2003).

Table-2: Major Causes Behind Getting Engaged in the RMG Sector

*More than one answer was possible

On the other hand, regarding recruitment procedures, most of them i.e., out of the total (150), more than 32 percent RMG workers were recruited through the search of their own, while 12 percent got the job through direct recruitment by the employer. In Bangladesh, the garment industry is considered a formal sector, but the recruitment process is primarily informal. In Bangladesh, job insecurity is more prevalent in the RMG industry than in other employment sectors. Millions of garment workers risk losing their jobs and benefits without a contract or appointment letter (Majumder and Begum, 2006). It is mentionable that out of the 150 RMG workers, 70.00 percent were appointed only on contractual basis, whereas only 30.00 percent were working on a permanent basis. Although this contractual strategy helps to control high turnover rates, the study found that female garment workers have a lower turnover rate than their male counterparts. On the other hand, skilled and experienced workers change their jobs frequently (Bangladesh Garments and Manufacturing Exporting Association, 2014). The Bangladesh Labor Law of 2006 regulates employment standards in Bangladesh, requiring written employment contracts for workers in industrial and commercial establishments. As per section 5 of the Bangladesh Labour Act, 2006, every employer must provide a formal appointment letter (Government of Peoples Republic of Bangladesh, 2006).

The employment and working conditions of the workers may also vary across job category and status. The study found that most of the lower-paid workers are employed as operators (40.67 percent), sewing helpers (14.00 percent), cutting helpers (12.00 percent), finishing helpers (6.67 percent), folding (4.67 percent), and iron men (3.33 percent) in the current job sector. Moreover, a considerable number of workers were found to be engaged as cutting master/cutter (9.33 percent), quality controller (7.33 percent), and supervisor (2.00 percent) in higher-paid and management positions. It is also remarkable that most of the higher paid RMG workers (60.71 percent) were employed on permanent basis.

Despite laws mandating a minimum wage, Bangladeshi garment workers often endure long hours for meagre compensation. Bangladesh offers one of the world’s lowest garment wages (Ahamed, 2011). The average monthly income of the RMG workers in the study areas is BDT 6460. Most of the workers (40.67 percent) of the study areas belong to the income of BDT 6000 -75000, while only 10 percent workers get BDT. 9000-10500. According to section 100 of the Bangladesh Labour Act 2006, adult workers shall be required or allowed to work at most 8 hours a day in an establishment (Government of Peoples Republic of Bangladesh, 2006). But it was found that garments workers normally work for 13-14 hours a day. Out of 150 RMG workers, 31.33 percent worked 8 hours daily, and the rest worked more than 8 hours daily (Please see table-03).

Table-3: Distribution of Workers According to Monthly Wage and Daily Working Hours

*Within bracket shows the percentage.

**Average monthly income of the RMG workers is BDT 6460.

According to the Bangladesh Labour Act of 2006, workers are entitled to several types of leave. But RMG workers are deprived of legally approved leave facilities that adversely affect their efficiency, productivity, and commitment to work. Such long hours working without a holiday or break make workers sick and exhausted. In this regard, one can barely expect high quality of work, efficiency, or high productivity. Regarding existing leave facilities enjoyed by the RMG workers, out of 150 workers, a large number of workers responded positively about the presence of different facilities like festival leave (100 percent), maternity leave (55.33 percent) and weekly holidays (46.67 percent) but they expressed that the leave facilities are not provided frequently. In this regard for casual leave, about 36.00 percent can enjoy this opportunity, on the other hand 32.67 percent and 12.67 percent of workers mentioned that they had opportunity to enjoy unpaid leave and paid leave, respectively. It is also mentionable that most of the workers (83.33 percent) are not allowed sick leave/medical leave during their illness period (Please see Table 4).

Table-4: Distribution of Workers According to Leave Category and Enjoying of Leave

*Within bracket shows the percentage.

The Legal Framework and Actors in the Labour-Management Relations system in the RMG Industry

The Constitution of Bangladesh lays out the fundamental legal framework for creating worker and employer organizations. To be registered, a trade union must have at least 20% of the total number of workers employed in any establishment or group of establishments where it is established as a member (Government of Peoples Republic of Bangladesh, 2006; Government of Peoples Republic of Bangladesh, 2013). The Ready-Made Garments (RMG) sector would benefit from a more substantial presence of trade unions. Although more than three hundred unions already represent garment workers, there is still room for improvement in unionization among workers. In the RMG, most trade unions operate outside of the factories, so more participation from general workers is required. The reduced membership of trade unions in these sectors can be attributed to various factors, including inadequate enforcement of labor laws, restrictive legal provisions, and the prevalence of contract labor. On the other hand, 20 per cent of workers’ signatures for forming trade unions are still mandatory. The government’s argument regarding 20% representation is to ensure discipline in the industries, whereas to workers’ rights entities, it is a restriction and violation of the ILO Conventions 87 (Freedom of Association) and 98 (Right to Organize and Collective Bargaining) (Khan, 2013). Consequently, many workers in factories are reluctant to join unions due to the fear of losing their jobs, although the present study found that only 13.33 per cent of the RMG workers are members of unions, on the other hand most of them (86.67 percent) are not involved in trade union activities, which is the basic organization to establish legal and socio-economic rights of workers (Please see Table 5).

Table-5: Distribution of Workers by Involvement with Trade Unions

The present study also investigated the relations between co-workers and management with RMG workers to understand labour-management relations. Out of the 150 workers, about 36.67 percent and 11.33 percent reported that the behavior of the co-workers and management was very good, while 32.67 percent and 22.67 percent workers reported that the behavior of the co-workers and management was good respectively. Besides, 21.33 percent and 42.67 percent of workers opined that the behavior of the co-workers and management was not so good. On the other hand, about 6.67 percent and 18 percent reported that the behavior of the co-workers and management was bad, while only 2.67 percent and 5.33 percent workers reported that the behavior of the co-workers and management was very bad respectively (Please see Table-6).

Table-6: Relations with the Co-Workers and Management/ Employers with Workers

*Within bracket shows the percentage.

Situations of Collective Bargaining and Dispute Settlement Process in the RMG Industry

Collective bargaining is an essential process in resolving industrial disputes. Sections 209 and 210 of the Bangladesh Labour Act state that collective bargaining is the first step in dispute resolution. For collective bargaining to be effective, a registered trade union must be available in the relevant trade or establishment/industry. Under the Act, there is a legal requirement to register collective agreements. If there is only one trade union in an enterprise with at least 20% of workers employed as its members, then that trade union is declared the enterprise’s Collective Bargaining Agent (CBA). If there are multiple registered trade unions in an enterprise, then all workers employed in that enterprise elect one of the trade unions as CBA through a secret ballot. The tenure of the CBA is two years, and it is responsible for representing and negotiating on behalf of all workers in the enterprise during that time (Government of Peoples Republic of Bangladesh, 2006; Government of Peoples Republic of Bangladesh, 2013). In the present study, a total of 30 factory managers and 150 workers were interviewed. One notable feature of the findings (Please see Table-7) of the study is that according to both management and workers, a significant proportion of the code of conducts do abide by the requirements of labour standards related to collective bargaining and dispute settlement, although the level of compliance indicated by the workers is somewhat less than that claimed by the management. Numerous factors contribute to the weakened bargaining position of industrial workers in the RMG sector. The available information suggests that frequent attempts by employers and ruling parties to bribe or victimize Collective Bargaining Agreement (CBA) leaders have rendered the collective bargaining tool highly ineffective.

Table-7: Responses of Managements and Workers Regarding Collective Bargaining and Dispute Settlement Practices in the RMG Sectors

*Within bracket shows the percentage.

Recommendations for Ensuring Labour-Management Relations in the RMG Sectors

The Bangladesh government introduced the National Labour Policy in 2012 to ensure that workers have access to safe and healthy working conditions and other fundamental rights. In 2013 and 2018, some changes were made to the Bangladesh Labour Law of 2006, which have had a positive impact on the relationship between workers and management and improved workers’ welfare, social security, and safety. These changes have also made it easier for trade unions and collective bargaining agents to operate, thus ensuring better compliance with labour standards (Government of Peoples Republic of Bangladesh, 2006; Government of Peoples Republic of Bangladesh, 2013; Government of Peoples Republic of Bangladesh, 2018). This study also aims to gather the opinions of RMG workers on legislations, policies, and programs at both macro and micro levels to ensure their welfare and labour-management relations. The study found that a hundred per cent of workers recommended increasing monthly wages and provided appointment letters to ensure labour-management relations in the RMG sectors. The RMG sector has a significant positive impact on poverty reduction and the incomes of the poor, which is reflected in the industry’s increased employment and contribution to the national economy (Islam, Rakib and Adnan, 2016; Rakib and Adnan, 2015; Razzaue, Eusuf and Shamannay, 2007). Therefore, addressing poverty and improving labour management relations in Bangladesh’s RMG industry is crucial for sustainable development. Poverty issues in Bangladesh are intertwined with the bargaining power of workers in sectors like the RMG industry and the broader national income per capita. Although Bangladesh’s poverty rate declined to 18.7 percent in 2023 from 40.0 percent in 2005 (Government of the People’s Republic of Bangladesh, 2023), most RMG workers continue to live in poverty. These workers typically have limited bargaining power due to a lack of education, job insecurity, and ineffective trade union practices. As a result, they may be unable to negotiate for higher wages and better working conditions, trapping them in poverty. Further, this inequality exacerbates poverty and limits opportunities for upward mobility for the poorest segments of society. Addressing poverty and increasing the income of workers in the RMG industry in Bangladesh requires a multi-faceted approach and a comprehensive plan involving multiple stakeholders and strategies that not only focus on increasing wages and bargaining power in sectors like RMG but also tackle broader issues related to income inequality, social protection, access to essential services, and economic resilience. Policies aimed at promoting inclusive growth, investing in skills development programs for RMG workers to increase their earning potential, providing education on labour rights, strengthening social safety nets, and fostering sustainable economic development are essential to addressing these interconnected challenges, overcoming poverty, and increasing the income of RMG workers in Bangladesh  (Islam, Rakib and Adnan, 2016; Razzaue, Eusuf and Shamannay, 2007; Zaidi, Reaz and Barbour, 2015). This might involve collaborating with RMG factory owners, government agencies, NGOs, and international organizations to set and enforce minimum wage standards to achieve sustainable improvements in workers’ income and poverty reduction. In addition, mechanisms for monitoring and evaluating the effectiveness of poverty alleviation efforts in the RMG sector, focusing on measuring improvements in income levels, living standards, and overall well-being of workers and their families, need to be established.

Besides, a remarkable number of workers emphasized reducing working hours/fixing the specific working hours (88.00 percent), practical initiatives to reduce fire and building collapse (86.67 percent), providing treatment facilities (78.67 percent), fair treatment by the employer (75.33 percent), to start tiffin facilities (73.33 percent), implementation of labour laws and policy (74.67 percent), improving work environment (68.00 percent), improvement of the working conditions (66.00 percent), providing transport facilities (63.33 percent), arranging residential facilities (60.67 percent), increase maternity benefits up to six months (59.33 percent), rights to form and participate in trade union (53.33 percent), regular wage payment (49.33 percent), providing different types of leave/holidays when entitled/due (48.67 percent), and ensuring sound and harmonious industrial relations (43.33 percent) to develop the status of labour-management relations in the RMG sectors in Bangladesh (Please see Table-8).

Table-8: Recommendations for Ensuring Labour-Management Relations in the RMG Sector

*More than one answers possible

LIMITATIONS OF THE STUDY

The study was conducted on only one hundred fifty RMG workers and thirty employers/management from three districts in Bangladesh. So, it is not possible to generalize the entire labour-management relations of RMG workers in Bangladesh based on the results obtained. Further, the respondents, especially RMG workers, were not very aware of the importance of this study. Besides, trade union leaders and employers were not cooperative in sharing information related to labour-management relations in the RMG sector.

CONCLUSION

Finally, we want to say that to fully contribute to Bangladesh’s goal of becoming an upper middle-income country of the world by 2031, the RMG industry now needs to ensure sound labour-management relations, labour welfare facilities and better working life of the garment workers. Otherwise, it will remain beyond reach. The workers should be considered as human beings not as workers or machines of production. Though after the tragedy of Rana Plaza, the situation has been changed surprisingly, yet we will have to take a long-term effective plan for the development of the workers’ lives whose hard working stands behind the success of our RMG industry, so that they can have the facilities needed for a standard life to lead it meaningfully. Findings of the study suggest that the condition of garment worker is not as unsteady as often portrayed. Immediate and appropriate interventions both at the macro and micro levels are, therefore, necessary to improve the status of labour-management relations in garment industries of Bangladesh.

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