In his famous book The Tipping Point, Malcolm Gladwell set out the factors that cause a sudden change of attitudes, whether it is a shoe style, a flu epidemic, or a shift in social attitudes.
I suggest that such a shift is taking place among the RMG workers for three reasons:
- There is an increase in the number of labour leaders supporting active efforts at improving worker conditions.
- The workers have seen that mass groups can force change -- they see this going on all around them.
- Finally, the workers see that the nation is changing and the oppression of the factory owners and the industrial police is weakening.
The attitude of the workers is changing and their demands must be dealt with if peace and prosperity are to come to the RMG sector. These are the three conditions that Gladwell would say causes a tipping point. In this case the tipping point is the RMG workers' change of attitude demanding their own rights, and rejecting the past ways by which they were suppressed.
It is urgent to resolve the labour issues in the garment sector. The future of the economy over the next four years depends on a reasonable level of RMG exports. Exports from the RMG sector are currently declining in dollar terms (10% per annum), placing growing pressure on the balance of payments.
Remittances may continue at a high level and a substantial volume of loans may become available, but the total is not likely to increase steadily over the next four years. Without strong export growth one must be seriously concerned at the consequences for the magnitude of the level of GDP and employment. There are optimistic forecasts on paper, but the reality is quite different.
The official figures for GDP are certainly too high. Government expenditures are curtailed; exports are declining; imports of capital goods are declining; imports of industrial raw materials are declining. Power use is declining. Investment is certainly declining. Real wages are declining. Company after company is in trouble. Major business groups are under investigation with probable negative impact on production and profits. Is this consistent with 5%+ growth of GDP? Certainly not.
There is considerable labour conflict between the workers and the factory owners. The workers are experiencing a declining standard of living as their incomes are not increasing and prices are rising.
Furthermore, the workers have seen that by joining together and applying forceful demands as a group, many people have been successful in bringing about change in their circumstances. With so many factories, trouble in one would naturally infect one nearby.
In the previous government, the industrial police were quick and brutal to stop strikes or worker demonstrations. This harsh treatment by the police is unlikely to return any time soon. Thus the epidemic of labour incidents will continue.
The factory owners tried to buy the workers off by accepting their initial demands. When the workers got all that they asked for, they asked for more. But studying the agreement reached, the Joint Declaration, one sees that this is a handful of sand. There are more promises, but no path to implementation.
Studying the agreement reached, the Joint Declaration, one sees that this is a handful of sand. There are more promises, but no path to implementation
Dealing with disputes
The workers’ protests forced an attempt to find a solution. The effort of the interim government, titled: Joint Declaration of workers and owners’ representatives in presence of honorable advisory council, sets out 18 points.
We will discuss these points briefly and then set out what is a useful practical approach to the RMG workers’ immediate situation. The thinking and effort behind the 18 points is a big step towards the destruction of the RMG industry -- or at least shrinking it by 50% -- and the consequent decline of the economy.
Unless the interim government deals with this issue in a realistic way, the only path forward is to go back to shooting and beating the workers into submission. The brave youth of Bangladesh would take no more. How about the workers who have stood up for their rights for fair treatment?
The Joint Declaration largely takes no action on five important issues, the solutions of which are obvious:
#2 Pay the minimum wages agreed to in December 2023
#4 Wages must be paid that are due to workers
#7 Withdrawal of cases against workers for participating in wage movements
#12 Stopping and reversing unlawful retrenchment of workers
#5 Stopping the unlawful blacklisting of workers
In these five points of the Joint Declaration no real action is initiated; all are postponed or it has simply stated the abuse must stop. Has any action been taken on any of these issues?
Minimum wage #2
One assumes that factories have to pay the minimum wage established by the Wage Board. But many do not. Yet the Ministry of Labour allows some owners to not pay the required wage. For this violation of the law there is no punishment.
Is payment of the correct wage retroactive? Should interest be paid for the delay? The workers have certainly paid interest for the wages they did not receive since most need money, that they borrow from money lenders. Punishment is certainly justified: Full payment of wages not paid with a 50% addition to cover the abuse and interest.
Payment of arrears #4
What actions are planned to determine which factories are in arrears? Punishment is certainly needed for this abuse. How can the Ministry of Labour allow arrears without punishment? The punishment might be an additional 50% of arrears.
The case when a factory is closed by the owners must be covered. The spirit of the law is that the workers must be paid according to the agreements. Owners playing tricks must be prevented by the Ministry of Labour.
The points #2 and #4 require proper records of who is employed and how much they are actually paid. One way to manage this is to require factories to have contracts with banks to make the wage payments and issue pay slips based on the information the company supplies.
Unions and worker committees must work together to identify abuses by the factories. Cheating the worker of their legitimate pay cannot be acceptable. This covers all aspects of compensation including bonuses, leave, etc.
These five abuses of workers are an affront to any government that stands for human rights
Case withdrawal #7
No actionable plan is suggested. Review of all cases and classification of relevant cases must be completed. The benefit of the doubt must always go to the worker. Then cancel the cases and reinstate the worker. If they do not want to go back to work then assume they resign on a common date for all such cases. Require the owner to pay wages for the time illegally unemployed due to the case, plus a 50% penalty.
This should be done for all cases together. Just cancel all the cases and forget going through any court process. Otherwise, no progress will be made if one goes to the tribunal case by case. The interim government can do what it wants. The legal system exists only at the pleasure of the interim government.
Retrenchment #12
Again, no action plan; just nice words. Everyone terminated as retrenched will be rehired as of the date of retrenchment, full salary paid for the period out of work and 50% penalty. There seems to be no orderly process for retrenchment. An appropriate process following the law should be established for the Ministry of Labour to implement in the future.
Blacklisting #5
This is an illegal process. If there is going to be backlisting -- ie a statement that a worker is of poor work ability or dishonest -- then there has to be a quasi-judicial process to verify this. This would best be handled by the union representing the worker. But for the current blacklisted workers, they should be rehired, back salary paid with a 50% penalty.
These five abuses of workers are an affront to any government that stands for human rights. The Ministry of Labour is clearly unfocussed and seems to be working on the side of the owners. A very strong secretary is needed who can implement corrections to achieve the five objectives listed above.
The workers actually receive almost nothing in this agreement. The Wage Board system, that always discriminated against them as an instrument of repression by the owners, continues. There is no real negotiation for the workers to assert their rights. The workers are excluded from the wage determination.
The oppression of the workers continues. The declaration does provide an opening for improvement and one hopes the Ministry of Labour will seize this opportunity to correct these problems.
Forrest Cookson is an economist who has served as the first president of AmCham and has been a consultant for the Bangladesh Bureau of Statistics.
