Industrial Relations in Bangladesh Lecture 8

1. Industrial Relations in Bangladesh Lecture 8 Human Resource Practices in BD HRM 430

2. IR & ER • Industrial Relations – The study of the employment relationship. It is the interaction of people and organisations at work. • It involves employees and their unions, employers and their associations and governments and the industrial tribunals that make regulations governing the employment relationship. • Employment Relations – the arrangements made by employers and employees about the overall work conditions and situations. E.g. pay, OH&S, leave, benefits etc. • The focus of ER is more on workplace relations than the traditional IR emphasis on institutions and the making of rules governing the employer – employee relationship. Bray et al. 2005; Dessler 2004

3. Emergence of IR & HR • Emergence of IR can be traced back since the beginning of 17th century in UK, when craftsman organised and went for negotiation with their employers regarding wage related issues. • Gradually, workers collective voice started raising across all over the world, specially in the industrialised nations. • HRM emerged as a result of educationists’, researchers’, and management practitioners’ study on shaping the IR issues and harmonising the employer-employee relationship. • Misconception exists that IR supports employees and HR supports employers. Why? Bray et al. 2005

4. IR Components • Three major components of any industrial relation system: • Employer – organisation, management, employer association. • E.g. CBI, FBCCI, ACCI, etc. • Employee – union, worker, employee, labourer. • E.g. WRWC, ACTU, SKOP, AFL-CIO, etc. • Government / Monitoring Body – the government, federal, state, law and legislation. • E.g. WorkChoices legislation, ILO, any particular government Bray et al. 2005

5. IR Bargaining • Collective bargaining – the process whereby workers organise collectively and bargain with employers regarding the work related issues. • E.g. labour union of the mining industry is bargaining with the government for pay rise. • Enterprise bargaining – an employer and a trade union acting on behalf of employees involved in a particular organisation, or an employer and the employees acting for themselves in a particular organisation. • E.g. labourers and their representatives are bargaining with a particular employer for pay rise. • Individual bargaining – a bargaining between a particular employee with his/her employer. • E.g. individual labour is bargaining with his employer for pay rise. Bray et al. 2005; Bamber et al. 2004

6. The Recent Global Union Trend • The union participation is decreasing rapidly since last decade: • Industrial shift – manufacturing to service • Occupational shift – labour intensive to knowledge based • Employment – students, migrants, female, minority, part-time, casual, contract • Government policies – hostile laws and regulations • Managerial prerogative -Anti-collectivist strict managerial practice, government’s support • Unions themselves – societal perspective, unions’ own mistakes Holland 1999, p.63

7. Bangladeshi Trade Unions • Sramik Karmachari Oykeya Parisad (SKOP) – Peak body • Workers Representation and Welfare Committee (WRWC) • Jatiya Sramik Federation Bangladesh (JSFB) • Jatiya Sramik Federation (JSF) • Jatiya Sramik League (JSL) • Bangladesh Jatiyatabadi Sramik (BJSD) • Bangladesh Sanjukta Sramik Federation (BSSF) • Bangladesh Trade Union Kendra (BTUK) • Bangladesh Labour Federation (BLF) • Bangladesh Free Trade Union Congress (BFTUC) • Bangladesh Sramik Federation (BSF) • Bangladesh Mukta Sramik Federation (BMSF) • Bangladesh Jatiya Sramik Federation (BJSF) • Bangladesh Jatiya Sramik Jote (BJSJ) Global Union Research Network 2005

8. Union Participation in Bangladesh • In 2002, Bangladesh's total workforce consisted of approximately 58 million workers. • Only 1.8 million belonged to unions, most of which were affiliated with political parties. • A slow 5% growth rate has been observed (in 2004). • There are no reliable labour statistics for the large informal sector, in which the vast majority (75 to 80 percent) of economically active people work. • Union involvement is strongest in the state owned organisations and lowest in the private organisation. Zero participation in multinational and foreign organisations. Fair Labor Association 2004; Global Union Research Network 2005

9. Union Trend in Bangladesh • Union members / representatives and leaders are not industry / IR / ER experts and they often do not have formal education. • Professionals, educated and young graduates tend to avoid union membership. • Union structure is too much bureaucratic and complex. A broken chain of command can also be seen. Global Union Research Network 2005

10. Employers Association • Federation of Bangladeshi Chamber of Commerce and Industries (FBCCI) – Peak Body • Metropolitan Chamber of Commerce & Industry (MCCA) • Bangladesh Employers Federation (BEF) • Bangladesh Garments Manufacturing and Exporters Association (BGMEA) • Bangladesh Textile Mills Association (BTMA) • Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) • Bangladesh Jute Mills Association (BJMA) • Bangladesh Finished Leather, Leathergoods and Footwear Exporters Association Global Union Research Network 2005

11. Employers Association • Very powerful bodies to regulate and monitor industrial development of Bangladesh. • 80% of the employers are covered by these associations. • A significant number of industries are covered by these industries. • 85% of the managerial employees are covered by these associations. • Almost free from political influences. Global Union Research Network 2005

12. Freedom of Association in Bangladesh (continue) • Bangladesh has ratified seven of the eight fundamental ILO conventions. • In 1972 Bangladesh ratified both fundamental ILO Conventions concerning: • Freedom of Association and Protection of the Right to Organise (Convention 87) • Right to Organise and Collective Bargaining (Convention 98). Fair Labor Association 2004

13. Government Involvement in IR in BD • Determining the role of the Bangladeshi government in monitoring and controlling IR issues is somewhat difficult and paradoxical. • In one hand the government regulates the union movement very strictly by implementing legislations to ban union’s freedom of CB and organising, on the other hand the government says that employees are free to join unions and CB. • International pressures from ILO, ICFTU, developed countries’ (USA, UK, AU etc) interference into local and national issues put the government into a sensitive position while monitoring and controlling IR issues.

14. Freedom of Association in Bangladesh (continue) • When Bangladesh ratified the International Covenant on Economic, Social and Cultural Rights (ICESCR), it entered a reservation on articles 7 and 8, which guarantee the right of everyone to form trade unions and join the trade union of their choice. • The reservation indicated that there would be some limitations placed on workers' freedom of association. • The Constitution of Bangladesh provides for the right to form associations or unions, subject to any "reasonable" restrictions imposed by law in the interests of morality or public order. Fair Labor Association 2004

15. Freedom of Association in Bangladesh (continue) • Bangladeshi labour law requires a workplace to have 30% union participation before a union can be registered, and a union may be dissolved if membership falls below this level. • Prior to official registration, which signifies state recognition of the trade union, a union may not function. • The ILO's Committee of Experts on the Application of Conventions and Recommendations (CEACR) considers that such requirements severely restrict workers' ability to form organisations of their own choosing and has requested that the government amend these provisions. Fair Labor Association 2004

16. Freedom of Association in Bangladesh (continue) • According to the International Confederation of Free Trade Unions (ICFTU), In Bangladesh, workers who try to establish a trade union are not protected by law before they have registered their union. • In this environment, employers persecute organisers of fledgling unions, sometimes by violent means or with the help of the police. • Moreover, the government takes measures to ensure that the number of participating workers does not increase to the 30% minimum level. • In many cases, particularly in the textile sector, the government passes the names of workers who apply for union registration on to employers, who dismiss the workers. Fair Labor Association 2004

17. Collective Bargaining in Bangladesh (continue) • In Bangladesh, collective bargaining by workers is legal on the condition that their unions are legally registered as collective bargaining agents. • Collective bargaining occurs occasionally in large public / private enterprises. E.g. WASA, PDB, jute sector etc. • In areas of high unemployment, workers often do not practice collective bargaining, due to concerns over job security. • Collective bargaining in small private enterprises generally does not occur. Fair Labor Association 2004

18. Right to Strike in BD • Strikes are common in Bangladesh and are recognised in the Industrial Relations Ordinance of 1969 as a legitimate avenue for addressing unresolved grievances. • Nevertheless, the ILO Committee of Experts has asked the government to amend several provisions of the IR ordinance that restrict workers' right to defend their economic interests through strikes. • There are three provisions. Fair Labor Association 2004

19. Right to Strike in BD (continue) • These provisions include: • The necessity for three-quarters of the members of a workers' organisation to consent to a strike • The government's power to prohibit a strike if it lasts more than 30 days or to prohibit a strike at any time if it is considered prejudicial to the national interest • The penalties (which include imprisonment) that may be imposed if workers participate in an industrial action that is deemed by the government to be unlawful. Fair Labor Association 2004

20. BD Labour Law – Freedom of Association • Current Bangladeshi Labor Law Dealing with Freedom of Association : • Bangladesh Export Processing Zones Authority Act No. XXXVI of 1980, amended by Ordinance No. XLIX, of 1984 and Ordinance NO. LII of 1988. • Bangladesh Private Export Processing Zones Act 1996 (Act No. XX of 1996) • The Industrial Relations Ordinance, 1969 (XXIII of 1969) Fair Labor Association 2004

21. Freedom of Association in EPZ • The BEPZA Act provides that the government may exempt an EPZ from as many as 16 laws,11 including the Industrial Relations Ordinance (IRO). • The government declared, in accordance with the BEPZA Act, the IRO is not applicable in the EPZs. • The declaration effectively suspended the rights of workers in EPZs to freedom of association and collective bargaining. • The Industrial Relations Department (IRD) in each EPZ supervises the Instructions' implementation, which includes the settlement of disputes and handling of grievances. • How effective the IRD is in resolving industrial disputes? Fair Labor Association 2004

22. ILO & EPZ • ILO reiterated that workers may not be denied the fundamental right to organise, since it constitutes a serious violation of the ILO conventions. • Therefore, the ILO has urged the government of Bangladesh to take measures to ensure that workers in EPZs are able to exercise their legal rights to organise and bargain collectively. • In turn, the Bangladeshi government claims that the restrictions on trade unions in EPZs are ‘temporary measures’ that are necessary to protect investment and employment. • The government justifies its policy by pointing out that workers in these zones enjoy better facilities and service conditions than workers in other industrial sectors. Fair Labor Association 2004

23. GSP • Bangladesh and USA signed a generalised system of preferences (GSP) agreement in 1991. • After it ended in 2001, USA extended it for another three years on the condition that Bangladesh allow trade unions to operate in EPZ. • The US government said that if Bangladesh did not end its suspension of labour laws in the EPZs and guarantee freedom of association, it would lose its eligibility for GSP benefits. • The Bangladeshi government issued a declaration in 2001 announcing the withdrawal, from January 1, 2004, of restrictions imposed on trade union rights in the EPZs. • How effective is that declaration? Fair Labor Association 2004

24. Are Trade Unions Necessary? • Two is better than one. • Employer generally holds the bargaining power. • Employers tend to exploit the employees and workers. • Employees should have the legitimate authority to decide right / wrong for themselves. • Better conflict resolution by the union people. • Being unionised and bargain collectively is the fundamental right of people. Combat 2004, p.132

25. Rio Tinto & BHP Billiton • Rio Tinto’s visible and aggressive proponent had managed to de-unionise 11,000 of its 16,000 employees by persuading a policy of introducing individual contracts. • BHP Billiton banned unionism in its workforce, since it thinks the company is sufficient to take care of its employees interests. But thousands of dispute cases on ER issues are awaiting settlements on AIRC. Haynes & Allan 2001, p.164

26. Too Difficult to Handle Union Representative?

27. Unions – welcome or unwelcome? • Are they too demandable? • Are these demands unjustified? • Do they have legal and fundamental rights to unite and bargain collectively? • Productivity – unionised or non-unionised workplace?

28. Unions – welcome or unwelcome? • Can unions go for strikes, absenteeism to meet their demands? • Can unions genuinely provide necessary and reasonable support to meet the interest of its members? • In this era of rapid growth, can we allow our workplaces to support unions and being in a centralised system?

29. Unions – welcome or unwelcome? • There is a growing need of HR to maintain the balance and harmony between the employer and the employee. • HR deals with ER, which is taking care of employee’s work related issues. • In that context, are trade unions necessary for the 21st century?

30. SQ Group – ETI Code Ethical Trading Initiative - • Freedom of association and the right to collective bargaining are respected. It is no way discouraged – either in writing, or verbally, or in action. • Workers, without distinction, have the right to join or form trade unions of their own choosing and to bargain collectively. • The employer adopts an open attitude towards the activities of trade unions and their organizational activities. • Where the right to freedom of association and collective bargaining is restricted under law, the employer facilitates, and does not hinder, the development of parallel means for independent and free association and bargaining. • Worker associations are not discriminated in terms of moral value or ideology. SQ Group 2001

31. Overview

32. References Bamber, G., Lansbury, R., & Wailes, N., (2004), International and Comparative Employment Relations, 4th ed., Allen & Unwin, Australia. Bray, M., Deery, S., Walsh, J., & Waring, P., (2005), Industrial Relations, 3rd ed., McGraw-Hill, Australia. Combat, G., (2004), ‘Celebrating our past, affirming our future: the place of unions in society’, Labor Essays, pp. 132 – 145. Dessler, G., Griffiths, J., Lloyd-Walker, B., (2004), Human Resource Management, 2nd ed., Pearson Education, Australia. Fair Labor Organisation, (2004), Annual public report 2004 - 2005, USA. [Online, retrieved on 30th March 2008], available at: http://www.fairlabor.org/2004report/freedom/bangladesh.html Global Union Research Network (GURN), 2005, Industrial Relations in Bangladesh, [online, retrieved on 2nd April 2008], available at: http://www.gurn.info/topic/wages/asia/main/bangladesh.pdf.

33. References (continue) Haynes, P., & Allan, M., (2001), ‘Partnership as Union Strategy: A preliminary evaluation’, Journal of Employee Relations, vol. 23, no. 2, pp. 164. [Online, retrieved on 14th May 2007, from UWS / ProQuest Global Database]. Holland, P., (1999), ‘Organising Works: Meeting the challenge of declining trade union membership’, International Employment Relations Review, vol. 5, no. 1, pp. 63. [Online, retrieved on 2nd September 2006 from UWS / ProQuest global database]. Rio Tinto (2008), Working for Us, [online, retrieved on 21st March 2008], available at:. http://www.riotinto.com/careers/working_for_us.asp SQ Group, (2001), Freedom of Association, [online, retrieved on 21st March 2008], available at:.http://www.sq-group.com/freeasso.html Stone, R., (2002), Human Resource Management, 4th ed., John Wiley & Sons, Australia.

34. Appendix • BEPZA – Bangladesh Export Processing Zone Authority • EPZ – Export Processing Zone • ICFTU – International Confederation of Free Trade Unions • ILO – International Labor Organization • IRD – Industrial Relations Department