Fuller trade unionism may be counter-productive
The closure of the Adamjee Jute Mills in Bangladesh is a good example of how trade unions can destroy an industry, the worlds largest jute mill
Md Harunur Rashid
angladesh earned $34.24bn from exports, registering around 9.72% growth from the previous year and readymade garment industry has generated $28.09bn exports with a 10.21% growth, according to Export Promotion Bureau in the fiscal year 2015-16. But the countrys export sector has been facing critical juncture after Rana Plaza factory building collapse in Dhaka. Instantly the United State suspended GSP for Bangladeshi export and created pressure for trade union in all factories as a prerequisite for revival of the tariff free access facility.
The United States will take no responsibility for the consequences of their demands. Although Prime Minister Sheikh Hasina requested to the US Secretary of State John Kerry for giving back GSP facility during the latters visit on 29 August, he did not positively responded.
The closure of the Adamjee Jute Mills in Bangladesh is a good example of how trade unions can destroy an industry, the worlds largest jute mill. Now the garment owners often refer the consequence of unionization in factories to Adamjee Jute Mills. The jute sector at the time of independence contributed 87 per cent of the export merchandise. Adamjees success encouraged other industrialists to venture into the trade and earned the nickname, Dundee of the East. Thousands from around Bangladesh would come here looking for work. Trade unions are considered responsible for the failure of jute mills. The demand for jute products are once again on the rise. Can we establish a new mill like that now?
This has been the unhappy history of many companies that have gone out of business. The union leaders block restructuring and protect workers associated with the unions, preventing modernization. The union becomes a device to protect jobs not to protect workers from abuse or to promote their longer term interests. In fact, the objectives of a trade union are varied and ever-changing according to the need of the economy and the overall industry. When these objectives are not settled, the overall productivity goes down because of unrest.
However, the rate of unionisation has increased in the RMG sector. According to the labour ministry, a total of 326 trade unions have been registered with the Directorate of Labour since 2013 after the Rana Plaza incident. Since 2012, there were a total of 138 trade unions in the sector, which stood at 464 till August 25, 2015. All the developing countries trade unions were influenced politically, but they used politics to create a better solution.
There are more opportunities for global retailers in Bangladesh now. The garment workers minimum wage is now between $70 and $100 (new wage structure for readymade garment workers at BDT 5,300 at entry-level) which is the second lowest in the world after Myanmar whereas the average wage for a Chinese garment worker is $500 per month.
Moreover, the vast advantage is China is slowly leaving the industry due to continuous labour shortage and rising minimum wages. A wide gap in minimum wage is also found within some Asian countries. For example, in Philippine, Indonesia and China, the highest minimum wage could be almost twice as high as the lowest minimum wage in the country. On the other side, the minimum wage in the United States was $7.5/hour in 2015, meaning a workers monthly minimum wage is no less than $1,200. In Bangladesh the last increase to the minimum wage was in 2013 following the Rana Plaza collapse. Yet the countrys trade union leader is given pressure on importer countries like US and EU for price hike? Answer is no because they dont have enough knowledge about this issue.
Another matter of sorrow is US and EU buyers have cut prices still now, a great concern for the sector as the production cost has increased manifold due to safety upgrade. But exporters are urging the buyers to increase the prices but they do not pay heed. In the event, the suspension of GSP to Bangladesh has both a signal value and a potential loss from the longer term perspective. Although the US presidential candidate Donald Trump said quality of shirt made in Bangladesh is good.
Trade unions are not actually completely aware about the employees legal rights and duties. Bangladesh is a country where every organization has more trade unions in the name only. In fact, in most cases, trade union leaders have close connections with local and national political leaders and even with the factory owners for whom they act as agents. They wanted constructive trade unions formed by the factory workers but didnt want to see the unions being politicised. Trade union leaders are always divided by their own interests similar to that of our political parties and always try to subdue the factory owners. The workers of Bangladesh dont have enough knowledge about the rights and duties.
Since 80 per cent of the apparel workers are female and as a result of their submissive and timid nature, the formation of trade unions and launching labour movements still remain a major constraint as they do not have any past experience. In fact, most of the apparel workers are illiterate and do not have proper knowledge about workers rights and labour laws. Most of the apparel factories do not practice HR and IR activities, which is why workers are not aware of their rights and responsibilities and fall easy prey to the so-called trade union leaders. Too much of political influence, lack of consciousness, lack of proper grievance procedure and lack of unity are the major reasons behind trade union failure in Bangladesh.
Sometimes over enthusiastic mid-level management beguile the top level management to show their gratification towards owners ignoring worker rights which in turn causes labour unrest. For that reason, they fail to defend the interest of both parties and are biased. In addition to that, the wage structure determined by the minimum wage board is not based on minimum daily life requirement of a worker. Consequently, there is a huge gap between income and expenditure of a worker which is why they are forced to live a life of poverty. Communication gap between mid-level management and workers leads to catastrophic upheaval in the apparel sector which could be solved in its initial stages simply through negotiations between workers and the mid-level management.
Another reason for fear behind the formation of trade union is mistrust between employees and employers. Employers believe trade unions will bring nothing but destruction and vandalism or the closing down of factories. We also have bitter history of contrary belief that employees have that they are being deprived of their rights and only trade unions can guarantee their rights. The hypocritical attitude of the owners is frustrating when we see them opposing trade unions while at the same time not being serious about the effectiveness of participating committees.
In addition to that, it can be said, psychologically workers always feel that they are being denied their entitled facilities. Both parties have their own justifications. The formation of a trade union by the owner is not mandatory but to form participation committee is mandatory as per the labour law. Any workplace related issue can be solved through negotiations using the participation committee. Of course, the factory owners have to be honest and vigilant about their effectiveness and make the workers aware of their rights and responsibilities.
In Bangladesh EPZ, there is no trade union; therefore, no labour unrest occurs there. It is absolutely true no conflict, no unfair means, and no strikes in productivity and the growth of the overall economy. Which one is better like trade union or not trade union or single trade union for single enterprise like Japan? Bangladesh government should find out the better option for all export earning sector which dramatically contribute to GDP (gross domestic product).
The writer is Assistant Deputy Secretary, BKMEA. Email: [email protected]
