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ASSIGNMENT ON:

Labor Union in the Garment Factories in Bangladesh

Spring 2011

Human Resource Management

Course Code: HRM 604

Submitted To:

Dr. Prof. Abu Saleh Md. Sohel-Uz-Zaman

School of Business, MBA

United International University

Submitted By:

Mohammad Masfiqur Rahman ID: 103113003

Mohammad Nazmul Hasan ID: 112072043

Easir Arefin ID: 112072039

Section: A

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Abstract
The working condition of the workers is not satisfactory in Bangladesh and
they suffer from low wage rate and poor safety measures. The labor unions
which have been established due this unsatisfactory condition could not
improve it either. The research is based on analyzing the current working
condition of the labors and also why the labor unions are failing to propose a
suitable solution. Both primary research and secondary research was done
for the paper. Workers were surveyed through a questionnaire and
interviews were taken. From the analysis it is found that the owners are not
concern about the work environment and the labor unions are failing due to
lack of skill of the union leaders and corruption. The literacy rate of the
workers also has an effect, since it is low. The industry as well as the country
might suffer if this persists.

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Chapter 1: Introduction
Bangladesh had entered the RMG industry in the late1970s. It was a
prospering sector to invest in and government considering the long team
economic benefit of the country as well as the opportunity this sector could
create for the country, the government waived many laws including labor
laws in favor of the garment factories in order to give the industry a chance
to flourish. The entry in the RMG industry was made right after the Liberation
War, when the economic development in the country was very slow and it
was going through a bad economic phase. According to the Bangladesh
Bureau of Statistics (1991), the growth rate of Bangladesh was over 4.75 per
cent from 1975-80, which however slowed down considerably to an average
of only around 3.8 percent in the 1980s. Both the poor economic condition
and the waived labor laws were responsible for creating an unsatisfactory
working condition for the workers. The workers were deprived of many
privileges, so that the industry could grow at the expense of the workers.

Today, the RMG sector accounts for more than 70 percent of the country’s
foreign earnings. The industry is in good shape but the workers are still
enduring the same treatment as before. The working conditions of many
garment factories are still unsatisfactory and sometimes the conditions are
life-threatening. As stated by Islam (2005, January 5) “The garment workers
of Bangladesh may be the most deprived labor force in the world”. The
minimum wage rate was $25 or Tk.1662 per month previously which
currently rose to only Tk.3000 or $45 per month in 2010, whereas the

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inflation rate has increases by much more than 80% in the past 5 to 10
years. The workers in the garment industry are deprived from a living wage.

So in response to the labor condition, a few labor unions were established,


but most of them were related to the political parties, favoring only the
workers belonging to that party and the numbers of independent labor
unions were very few.

The working conditions of the workers are still not improving even after the
introduction of the labor union. There is also a concern that labor unions are
failing due to corruption as many experts and journalist identified it as the
main reason behind the failure of the labor unions. Through this report I hope
to identify the reasons why the overall working conditions of the garment
factories are not improving.

Chapter 2: Background
Early during the Industrialization period it was soon understood, that there
will always be conflict of interest between the employers and the blue collar
labors. For the industry to flourish the workers interest in certain areas must
be overlooked. According to Marx (1867), a German philosopher and
economist, “Capital is dead labour, that, vampire-like, only lives by sucking
living labour, and lives the more, the more labour it suck…”, he also added
that interests of capital and the interests of the wage-labour are
‘diametrically’ opposed to each other. By capital he meant the government,
who owned all the assets, that is the factories, offices, etc of the country
according to socialism which was also suggested by Marx (1867) himself.
Concisely, an employer will always try to exploit the workers for their own
benefit.

Soon the workers began to feel that they need unite among themselves to
have a better bargaining power to communicate and negotiate their
problems with the employers. Thus the idea of a forming a labor union was
born.

Webb and Webb (1894) had described trade union as a ““a continuous
association of wage earners for the purpose of maintaining or improving the
conditions of their working lives”. Through a labor union, the labors can
bargain and ensure their status, rights, wages and demand. It is a worker’s

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right to be part of a labor union, and depending on their will they may or
may not be part of a labor union, as suggested by Crane and Matten (2007).

A labor union is formed as per the Trade Unions Act, 1926. According to the
act any group on organization whether temporary or permanent formed for
the purpose of regulating the relations between workers and employers is a
labor union.

In Bangladesh forming and joining a labor union is a constitutional right


according to the Constitution of People’s Republic of Bangladesh.
Considering the low wage rate and the poor working condition of the
employees labor unions where established in response to the working. Most
of the unions are limited to the public sector or state-controlled enterprises,
but trade unions in the private sector are practically banned.

Bangladesh stepped into the RMG industry in the year 1978. Since the labor
laws were waived by the government to give the industry a chance to grow,
the labors were deprived of many privileges. Now, more than three quarters
of Bangladesh’s export earnings come from the garment industry, which
began attracting foreign investors due to cheap labor and low conversion
cost, which is described by Crane and Matten (2007) as the race to the
bottom effect. The race to the bottom effect is when foreign investors look
for alternatives to reduce their cost by outsourcing it to the developing
countries; those developing countries usually have a competitive edge in
producing cheap labor and can offer the lowest price. In 2002, the industry
exported US$5 billion worth of products. The industry now employs more
than 3 million workers, 90% of whom are women.

As the industry developed itself and reached its full potential in the following
years, the working condition of the labors still remains unsatisfactory. The
labors in the garment factories have to work in life-threatening working
conditions. They are poorly paid, and are forced to do overtime. Many female
workers are denied maternity leave or flexible working hours, where as 85
percent of the workers are women.

Though many labor unions are formed in response to these problems, but
the improvement of the working conditions for the workers are still elusive.
The labor unions are mainly failing due to the labor union leaders, as
suggested by Ali and Andaleeb (2008, May 4). They write “it has been open
secret trade unions leaders are mostly corrupt”. They are mostly working for
the fulfillment of their personal interest.

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“The literacy rate of the workers is also adding up to the pressure, since it is
considerably poor, the workers are easily manipulated” as stated by Syed
Hamidul Karim, manager of Arunima Apparels Ltd, a sister concern of Rising
Group. He was interviewed regarding the research topic, he said that the
labor union leaders use the workers and call for strikes for serving the
leader’s personal interest; it is use as a weapon to threat the factory owners
to comply with the leader’s personal demands, this scenario persist in most
cases.

Chapter 3: Research questions and Hypothesis

RESEARCH QUESTIONS:

▪ Do the garment factories have labor unions?

▪ If not, do they need labor unions?

▪ What is the viewpoint of garment workers regarding labor


union?

▪ What is the employer’s perspective regarding labor union?

▪ Are the working conditions satisfactory?

▪ If not, what are the reasons behind the failure to improve the
working conditions?

▪ What kind of problems is faced by garment workers in their


workplaces?

▪ Can a labor union solve the difficulties in workplace faced by the


workers?

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▪ Does a labor union act as a communication link between the
workers and employers?

HYPOTHESIS

There are quite a few labor unions in the garment sector in Bangladesh that
are currently working for the welfare of the workers. Among them The
National Garment Workers Federation (NGWF), Bangladesh Independent
Garment Workers Union Federation (BIGUF) and Bangladesh Garment &
Industrial Workers Federation (BGIWF) are the ones that solely concern with
the garment industry.

The workers are constantly suffering from health hazards due to the poor
safety measures, and sometimes they even get killed for the risky structure
of the factories. Despite such risk and hard work the labors are mistreated
and poorly paid. If the workers try to stand up and protest against this
injustice they are fired and blacklisted so that they are not recruited by other
factories. A labor union is created so that the workers can negotiate with the
employers through their collective bargaining power and improve the
working condition. So considering the working condition in Bangladesh, labor
unions are very much needed.

Though being part of a labor union is a worker’s right and though it is not at
all illegal, many workers are scared of joining a labor union due to fear of
losing jobs, being victims of misbehavior in the hands of the employer or
getting blacklisted.

In the context of Bangladesh, it is often heard that the factory owners are
accusing labor union leaders for creating an aggressive attitude in the
workers’ mind for the leader’s personal interest. They also complain that
labor unions in garment factories do not collaborate with the workers in
many occasions and bargains more than is applicable.

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Chapter 4: Research Methodology
For this research paper both secondary and primary data were used. The
primary research consisted of analysis of data that was acquired by means of
a survey and interviews. The survey was planned for the workers in garment
factories through a questionnaire to find out the difficulties they face in their
workplace and also their views concerning labor union and whether
established labor unions are able to solve their read problems and defend
their rights. The worker were suppose to answer the questionnaire
themselves but due to the constraint that they could not read English and it
was also difficult finding suitable candidate for the questionnaire when it was
translated it Bengali, so instead of a questionnaire survey, thirty randomly

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chosen workers were interviewed separately and the questionnaire was filled
up according to their response.

A top management official of a garment factory was interviewed for the


research paper though initially, the interview was planned for the owner of a
garment factory. The interviewee Syed Hamidul Karim, manager of Arunima
Apparels Ltd. discussed different aspects regarding labor union and the
impact of having labor union in an organization. Since the interview with a
labor union leader could not be done due to some constrain a labor
committee member of the same factory was interviewed.

As for my secondary source for the research paper, most of the articles were
collected from the internet which included newspaper articles, journals and
research paper of other authors that was related to the research topic. Ideas
and concept from two books and a book review was also used in the
research paper.

Chapter 5: Analysis and Findings


The analysis was done by surveying 30 garment workers. The overall result
of the respondents is discussed in this section. Among the 30 interviewee, 18
were women workers and the other 12 were men. The age range of most of
the workers, who are surveyed, is within 18-40 years and almost all of them
were working in the garment industry for more then 3 years. The
employment periods of the workers were the maximum in 5-10 year
category. For details please refer to the bar chart in the appendix.

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Among the workers who were interviewed only 7 workers were member of a
labor union, and 3 of them were not a member of a labor union but a labor
committee. A labor committee is like a labor union is essence, its sole
purpose is to protect the right and to improve the working condition of the
workers but they are deprived of some rights that a labor union enjoys. It is a
committee consisting of members from both the top management and the
workers. Most workers did not give any reasons for being part of a labor
union. Most of the workers who were not a member of any form of labor
union did not join the labor union mostly because it is of no use and they
were also not very interested to join. From their interview it seems they were
reluctant to join since most of thought it was quite unnecessary.

The difficulties that most workers faced in their work place were delay of
payment and unavailability of safety precaution, though many workers
complained that the wage scale is inappropriate compared to the work done.
The average wage rate is below the standard of a living wage, that is their
wage is so low that it is difficult for them to maintain their family life.

The workers who rarely faced problems say that most of the problems were
unavoidable and bound to happen in any organization. Problems they faces
apart from the delay in their payments are mainly disorder in the production
systems, which is more related to the efficiency and skill of the labors then
the fact that it is regarded as a employers’ fault. Personality clashes
between the workers themselves or the supervisor is also very common. The
more common types of problem that the workers face is difficulty in flexible
working hours and leave for personal reasons during peak production period,
or when significant number of workers are on leave.

Other than these problems, very few workers in the other two categories
faced unhealthy working condition and misbehavior by supervisor or
employer.

Only 2 of the respondent agree with that a labor union can improve the work
environment. They think so perhaps because they might have faced or have
heard people facing difficult situation where the intervention by a labor union
helped to improve the condition.

Eleven of the respondent disagrees and eight people strongly disagree


with the fact that a labor union can improve the working condition.
They think that labor union leaders only pursue their self interest they
have faced situation where the labor union failed to help them.

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The work environment. The following table will help to understand the
attitude of the workers and also relation between the attitude towards
labor union and the other two.

Labor Union 0.8000


Union Leader -0.9333
Work Environment 0.8778
Correlation (Labor Union and work -0.8798
Environment)
Correlation (Labor Union and union 0.7154
leader)

It can be seen from the table that the correlation between the attitude of
workers towards labor union and work environment is negative, that is they
are strongly negatively correlated. This implies that if the working condition
or the work environment which consist of all the factors such as having
better safety measure, healthy environment and supporting and
understanding employer is satisfactory to the worker than the need for going
to or forming a labor union is less. A satisfied worker will not be too willing to
join a labor union since it is not necessary for the worker to achieve his
personal interest. On the other hand unsatisfied workers would be willing
accept any help they can get from improving their working condition.

There is strong positive correlation between the attitude of the workers


towards labor union and that of the union leader. It is so because the
effectiveness of a union is judged by the efficiency of the union leader, who
is representing of the labor union. If the workers perceived that the union
leaders are not truthful to their cause, the workers will have a negative
attitude towards the leader as well labor union itself. Many experts feel that
the workers are manipulated by the union leaders for their own personal
interest and they are highly indulged in corruption.

The values in the above table are calculated by assigning different values
within a scale of -2 to +2 to the different questions in the questionnaire. The
questions are grouped together accordingly and the average of the grouped
questions is calculated to find the attitude of the workers regarding the
different aspects discussed above. For example The question in the
questionnaire “To what extent do you think a labor union leader collaborates
with its members?’ and “Do you think the labor union leaders are acting as a
good representative on your behalf?” are used to calculate the attitude of

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the workers towards union leaders. The options scaled with the most positive
option being +2 and the negative being -2. The average value of the answers
of the both questions is the value to represent the attitude of the workers.
The mean of all such values gives the overall attitude of the respondents.

Interviews
According to Syed Hamidul Karim, manager of Arunima Apparels Ltd, in
Bangladesh having a labor union in any organization has a more adverse
effect than positive ones. He believes that the union leaders are not well
educated in most cases and lacks the skill to negotiate with the employers to
achieve the best outcome for the workers. They are more concern about
their personal interest. He thinks that the way they handle any issues or
problems of the labors is better than having a labor union. The literacy rate
of the workers is also adding up to the pressure, since it is considerably poor,
the workers are easily manipulated. The strikes that are caused by the union
leaders are called only to pursue their own needs, these strikes are crippling
the overall garment industry, and the country is losing potential foreign
investors and income sources. All these factors are the reason for the failure
of a labor union in Bangladesh.

They have introduced the idea of a labor committee due to the pressure from
foreign buyers and also seeing the need for a reporting channel so that the
workers can have a better work environment. He thinks in context of
Bangladesh it is the best possible solution for improving the working
conditions of the labors.

A labor committee is a group which is formed by people who are from the
top management of the organization and a few workers are in that
committee. The committee has regular weekly meeting where all the
different issues and complains of the workers are discussed and a possible
solution is prescribed. The only difference a committee has from labor union
is that it does not have the right to do unofficial meetings and also they are
deprived from having the right to call for strike.

A committee member, who is also a garment worker, was interviewed to


understand the functioning of the committee. The interviewee Laili Begum,
an operator said that the members of the committee is selected through a
voting process, the workers select the ones, who according to them would be
suitable for the role. The members are reelected after every two years; it is
done too avoid any form of biasness or corruption.

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The workers are encouraged to report to the committee about any problems
they face in the work place. If the workers wants to be anonymous while
reporting a problem, there is a complain box in the restrooms where the
workers can drop their complain letters in the box. The box is weekly
checked for any complains and suitable corrective actions are taken to
correct the issues.

Chapter 6: Recommendation
Steps should be taken by the workers, employers and authority to improve
the current condition of the labors. The labor unions can be more efficient if
all the stakeholders come together to diminish the causes of the failure to
improve the working condition of the workers such as corruption and lack of
knowledge of the workers and union leaders as well as of the owners. A
healthy democracy should be established in the country so that the labor can
enjoy their fundamental rights to form any trade union. The workers should
be trained so that the cost of related to inefficiency is minimized.

The union leaders should be more accountable to the workers. The decisions
taken by the union leaders should be made discussed and approved by the
workers. There should some kind of regulatory body, so that the workers can
take action again the union leaders if they are involved in corruption.

The employers can encourage the workers to discuss their problems directly
to them. They can form a committee with members consisting of both
workers and higher management officials to discuss different issues relating
to their problems. They can have an anonymous reporting system for the
labors, so that they present their problems to the authority directly.

The foreign buyers have a huge role to play to improve the working
conditions of the workers. They should not look for only cheap labors but also
quality and pay more to the factories, so that they can maintain a higher
wage rate. It would be possible if the developing countries form an
association and charge a fair price to the foreign buyers, so that they can
pay higher wage to the workers

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Chapter 7: Conclusion
The unsatisfactory working conditions of the labors still persist due to the
exploitation of the workers by both the labor union leaders as well as the
employers. The workers are still deprived from their rights and are suffering
from low wages and poor safety measures. There is no implication of any law
for protecting the rights of the labors in the RMG sector in Bangladesh.
Corruption and illiteracy of the workers are the main reasons for the failure
of labor unions, since they can be easily manipulated by the union leaders
for their own benefit.

If the factory owners and government does not take corrective measures to
improve the working condition of the workers then the country might lose its
most revenue earning sector. Recently, due to the increase in costs including
wage rate and constant occurrence of strikes many factories are shutting
down or acquired by foreign companies. If this persists in the long the
government might fail to earn any revenue from this once profitable sector.

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Chapter 8: Reference

Ali, A. N. M. A. & Andaleeb, Z. (2008, May 24). Say 'no' to corruption: Laws
relating to trade union needs amendment [Electronic Version]. The Daily
Star.

Bangladesh Institute of Labour Studies (2005). Labour market statistics:


Labour law. Retrieved on August 2, 2010 from http://www.bils-
bd.org/labour_law.html.

Crane, A. & Matten, D. (2007). Business ethics (2nd Ed.). New York: Oxford
University Press.

Islam, S. (2005, January 5). In Bangladesh, garment workers' payday not a


sure thing. The American Reporter. Retrieved August 1, 2010, from
http://www.brain- storming.info/article.php?ida=59

Marx, K. (2003). Das capital (Vol-1), (S. Moore & E. Aveling, Trans), (F.
Engels, Ed.). London, Great Britain : Lawrence and Wishart Ltd. (Original
work published in 1867).

Sinha, M. B. H. (2006, January 10). Garment strike in Bangladesh: Whose


responsibility, whose interests? Workers World. Retrieved August 2,
2010 from
http://www.workers.org/2006/world/bangladesh-0615/index.html

Webb, S. & Webb, B. P. (1920). The history of trade unionism (2nd Ed.) . New
York: Longmans, Green

(S. H. Karim , personal communication, July 21, 2010)

(L. Begum, personal communication, July 21, 2010)

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