Studies

The readymade garments (RMG) sector is the biggest foreign currency generating industry in Bangladesh, but this sector is faced with the challenge of mass cancellations of orders from buyers in the face of the COVID-19 pandemic, with more than one million garments sector workers already being dismissed. In this study, BIGD will identify the role of trade unions in negotiating the rights of RMG workers as the sector is experiencing the global crisis created by COVID-19.

Researchers: Maheen Sultan, Md Shanawez Hossain, Mohammad Sirajul Islam, Kabita Chowdhury, Sayada Jannatun Naim; Farah Huq

Timeline: April – June 2020

Status: Completed

Publications

• Report: Taka 5000 Crore Novel Corona Financial Stimulus Package For Export-Oriented Industries: RMG Trade Union Responses
• Report: COVID-19 Crisis Implications for the RMG Sector: Trade Union Responses – A Rapid Study
• Report: Summary Brief: COVID-19 Impact on RMG Sector and the Financial Stimulus Package: Trade Union Responses

Contact: Maheen Sultan; maheen.sultan@bracu.ac.bd

Context

The RMG industry in Bangladesh is facing a serious crisis because of COVID-19, with a virtual freeze on new business and the mass cancellation of existing orders. Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has been appealing to the buyers to continue ordering. BGMEA has formed task forces to monitor the situation, to collect information on order cancellation, and to work with the Government to provide support so that the industry can afford to pay the workers.

Some of the trade unions have asked for a shutdown of the factories, most of the others are working with government bodies and BGMEA to ensure that the factories remain open and people have jobs and salaries. In the face of the concerns raised by the trade unions and the RMG employers, on March 25th 2020 the Government announced a BDT 500 million stimulus package, of which the majority is allocated for workers’ wages and benefits. The finance ministry has unveiled the guideline for the disbursement of the stimulus package for the export-oriented sectors to protect them from the economic fallout of the global coronavirus pandemic. It is reported that the owners of export-oriented companies and factories can pay wages to their workers for up to three months from the stimulus package (Daily Star 2.4.2020).

But, according to a report published by Penn State University’s Centre for Global Workers’ Rights and the Worker Rights Consortium (WRC), more than one million garment workers in Bangladesh have already been fired or furloughed, as a result of order cancellations and the failure of buyers to pay for those cancellations. According to the report, the factories surveyed mentioned that 98% of their buyers refused to contribute to the cost of paying partial wages to furloughed workers, required by law, and 72% of furloughed workers were sent home without pay. Meanwhile, 97% of buyers refused to contribute to the severance pay expenses of dismissed workers, also a legal entitlement in Bangladesh. It found that four out of five workers were dismissed without their severance pay. Although this report has been challenged by BKMEA, it acknowledges possible problems and their severity.

There is a possibility that the smaller factories and subcontracting factories will close down and workers will be let go, with or without the guarantee of getting jobs back. It is not clear whether they will be paid their due in either case.

In this study, BIGD will identify the role of trade unions in negotiating the rights of RMG workers as the sector is experiencing the global crisis created by COVID-19.

This study is relevant to SDG 3 (Good Health and Well-Being) and SDG 8 (Decent Work and Economic Growth), particularly to ensure healthy lives and promote well-being for all at all ages, as well as to promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all..

Research Questions

1. Trade Unions:
   1. What effect is COVID-19 having on employment in the RMG sector and how are Trade Union leaders negotiating to safeguard worker interests?
   2. What is the role of the TU leaders in
      1. safeguarding occupational health and safety of workers in factories still operating during COVID-19
      2. ensuring job security and layoffs and termination according to the Labour Law for factories that are closing
      3. Ensuring smooth, swift and equitable distribution of the GOB stimulus package benefits to factories and workers
2. RMG workers: how has the COVID-19 crisis affected the job security, payment of wages and benefits and occupational health and safety for those still working
3. Management of RMG factories/industries: how is factory management coping with the COVID-19 effect on cancellation of export orders in terms of ensuring safety, security and wages and benefits of their workers

Method and Sample Size

BIGD has access to a number of useful contacts from several projects and academic programs as listed below:

1. In partnership with FES Bangladesh, BIGD runs a cross-sectoral education program for trade unions, called the Academy of Work.
2. Through this program, BIGD has contacts with 50 mid-level trade union leaders. BIGD also has contacts with women trade union leaders through the Countering Backlash
3. BIGD runs a Post Graduate Diploma in Knitwear Industry Management (PGD-KIM) program under the government’s SEIP program, through which BIGD has a contact database of the mid-level RMG and knitwear Trainees and their industry supervisors.
4. Database of respondents of ECHOTEX baseline and endline surveys
5. Database of Post-Rana Plaza Volkswagen Foundation survey respondents
6. Gender and Social Transformation (GST) team’s media tracking of trade Union activities in the RMG sector

In-depth qualitative interviews were conducted with 20 trade union leaders – 10 female and 10 male – between April 11 and 18, 2020 Representatives from plant-based unions as well as national federations were present in the sample size. Secondary data was also collected from research reports, newspapers and other printed & digital sources, while a review of the announcement and guidelines for financial stimulus package was conducted.

Phase 1 (March 2020)

The first phase of the interviews have taken place and the survey findings were shared in a webinar. A summary brief and full report have also been published, the latter focusing on the overall crisis mitigation from the lens of Trade Union leaders.

Phases 2 (May-June 2020)

1. 1. Follow-up phone interview with 20 mid-level managers in RMG sector: 10 female and 10 male
   2. Phone Survey of 600 RMG workers using tablets for data entry. We will interview both female and male workers from three categories of factories (depending on the size of the factory)and focus on issues such as whether they are working, whether they moved, whether they received wages and their future expectations

Findings and Recommendations

Trade Union’s believed that RMG workers were in a high-risk position, burdened by the mental pressure of providing for their families in the wake of rampant job insecurity and financial suffering caused by unpaid wages, layoffs and exposure to infection. The trade unions themselves had played an active role in negotiating with owners, associations, and the government to ensure workers’ salaries and job security and OHS; although they were experiencing difficulties in communicating, mobilizing and carrying out protests in lockdown circumstance, they were adjusting to mobilizing digitally. Trade Unions believed that the BDT 500 million stimulus package from the government was a timely initiative to lessen uncertainty about workers’ wage payments; but they criticized it for leaving workers’ inclusion at owner’s discretion, questioning the adequacy of the amount, and also doubting owners’ dependency on the government stimulus. The respondents also criticized the package for not being designed on the principle of greatest need and for there not being an explicit role of trade unions behind the formulation & declaration of the stimulus package. The respondents also pointed out a number of loopholes in the package design.

Millions of RMG workers are going to be affected economically by the COVID-19 crisis. Majority of these workers are female, coming from poor socioeconomic backgrounds, and mostly working at a low wage in garments factories predominantly producing low-priced garments. Historically, the garments workers have been often denied their rightful benefits. RMG is the most important industry for Bangladesh, as a result, the industry leaders can negotiate for support with the government in crisis situations like this. But it is extremely important that the poor and vulnerable workers get the fair share of the support package. Our research will provide useful insights into whether this is happening and what role different stakeholders are playing in the negotiation process.