Chittagong University

Center for Business Administration

An Assignment
on
The Compliance Management of KDS Garments Industries
Limited
 Chapter -1
 Background of the study
The readymade garment (RMG) industry of Bangladesh commenced its journey in the late
1970s and within a short period of time emerged as an important player in the economy in
terms of export earnings, employment generation, and poverty alleviation and empowering of
women. Bangladesh exports its RMG products mainly to the United States of America (USA)
and the European Union (EU). Garments exports from Bangladesh have been growing at an
impressive rate in recent years. In 2007-08 alone, the garment export earned a record level of
US$10.7 billion in 2007-08. Moreover, it accounts for over 75 percent of the country’s total
export earnings, provides employment almost 5 million people, accounts for over 10 percent
of the country’s GDP, and contributes around 40% of its manufacturing output.

According to the WTO, Bangladesh is the fourth greatest exporter of clothing in the world, its
share being 4.8% of the total (data from 2011). In the fiscal year 2011-2012, the garment
sector accounted for 78.6% of Bangladeshi total exports (BGMEA, 2013), bringing 19 billion
dollars into the country and contributing to more than 13.5% of the total gross domestic
product. These numbers, a testimony of the importance of this sector for Bangladesh and its
citizen - 150 million of people - are certainly impressive; however, what is really astonishing
is the rate at which this industry has grown.

The prospects of RMG sector in Bangladesh not only depends on availability of cheap labor
and government’s liberal policy but also depends on compliance with codes of conduct.
Compliance means to comply with something or yield to the wishes of another. RMG sector
of Bangladesh needs to improve the factory working environment and various social issues
related to the industry. International buyers are very particular about compliance with codes
of conduct before placing any import order. Poor housekeeping and storage system,
ineffective monitoring and controlling system, disorganized production layout, lack of team–
based work, rented factory premises, narrow staircases, closed environment, insufficient light
and air, clean drinking water etc. are common practices in most of the RMG factories in
Bangladesh.

 Methodology of the study

The study has been conducted through collecting data from primary as well as secondary
sources.

 Primary sources of data:

 Conversation with the Manager, Sr. Executives and executives

 Interview with employees and workers

 Daily note maintenance.

  Secondary sources of data:

 Visiting the company website

 Analyzing several confidential reports

 Internet

 Limitations of the study

 Confidential information of high importance was not allowed to provide.

 Major constraint of the study is inadequate access to information that hampered the
scope of the analysis required for the study.

 Though all the employees were cooperative, but sometimes due to excessive workload
they were unable to provide sufficient time. So, a perfect analysis could not be made.
 Chapter -2
 Overview of KDS Garments Industries Limited
KDS group is a renowned group in the world’s fashion market. KDS has made its mark in the
readymade garments manufacturing in Bangladesh being the pioneer and one of the largest in
the country.

KDS Garments Industries Ltd. is a private limited company. This wing of the group is
actually comprised of 5 Apparel manufacturing companies which are: KDS Garment
Industries Limited, KDS Hi-Tec Garments BD Ltd, KDS Apparels Limited, KDS Fashion
Limited and HN Garments Limited. Within this division, there are sub divisions of Knit,
Woven, Jackets, Washing, Embroidery, Quilting and many others, which equips the Group to
be the provider of all kinds of apparel manufacturing solutions to any Apparels company
worldwide. It has a positive contribution to the economy of Bangladesh. They believe in
quality and time and highly emphasized in maintaining a concerted harmony in its working
process and its environment.

KDS Garments Industries Limited at a glance

Organization Name KDS Garments Industries Limited
Name of the Chairman Al-Haj Khalilur Rahman
Location 255, Nasirabad Industrial Area, Chittagong 4211, Bangladesh
Communication Media Telephone: 88031681240-04
Fax: 88031681398
Email: garment@kdsgroup.net
Website www.kdsgroup.net
Establishing Year September 11,1983
Initial Capital 1670000
Current Yearly Sales $106 million
Number of Full Time 10000 (male 3500;female 6500)
Employees
Production Capacity 40 million pieces per year
Quality Standards Internationally approved
Nature of Business Manufacturer and 100% export of readymade garments
accessories
Exported to USA, Germany, UK, France, and Spain markets
Annual Turnover US $102 million
Trade union Absent
Strategy Lower cost strategy in marketing niche
Mode of Transaction Letter of Credit
 Products provided by KDS Garments Industries Limited
 Men’s wear and Boy’s wear
 Women’s wear
 Shirting and underwear
 Sportswear and Work wear
 Circular knit Garments
 Flat knit Garments
 Foundation and Swimwear
 Children’s wear

 Awards and recognition

The Garments sector of KDS group has earned 11 National Awards (President Gold Trophy)
from 1985 to 1998 for the highest exports of readymade apparels from Bangladesh. It has
also earned the following international awards and recognitions:

 Vendor Excellence Award - 2004 from Charming Shoppes, Inc. USA, Business
Innovative Director, Texas, USA
 Award of AMC USA 1998,1999 & 2000
 Award of KMART Apparels Corporation, USA 1998,1999 & 2000
 Award from Trade Leader Club, Spain 1992, 1993.
 Chapter -3
 Compliance management of KDS Garments Limited
Compliance is a package of events related to conformity & assurance of human rights, legal
rights, health & hygiene, safety and welfare & freedom of association of an employee within
the organization or the business. Human beings are working in the organization. They are
having many demands in their life. They should have their rights & privileges in their
working place within the particular time period, occasion & in the various intervals of their
work. Compliance confirms all these issues to get good production for the enterprise,
maintaining good & healthy inter personal relations within management & employees and
excellent working environment. Compliance is such an events elaborately prescribed in our
country labor Law 2006.

KDS Group maintains compliances in their every factory for the all employees. Here we are
discussing about KDS Garments on G4 Floor activities. Apparel has been finished from
cutting to packing here. In this floor about 350 workers are doing their job. All labors are
controlled by a manager.

 Working hours & allowance for overtime

According to Bangladesh Labor Law, no adult worker will ordinarily be required or

allowed to work in an establishment for more than eight hours in any day (Section
100).Also provided that- an adult worker may work in an establishment not exceeding ten
hours in any day. (Section 108)
Adult workers shall ordinarily be required or allowed to work in an establishment for
more than 48 hours in any week (Section 102). But an adult worker may work for more
than 48 hours in a week provided that the total hours of work of an adult worker shall not
exceed 60 hours in any week and on the average 56 hours per week in any year.
No women will, without her consent, be allowed to work in an establishment in between
10 pm and 6 am (Section 109).
When a worker works in an establishment for more than the prescribed hours in any day
or week, in that case he or she will get overtime allowance at the rate of twice of average
of his or her basic wages (Section 108)

In KDS Garments Industries Limited, any work after 8 hour is treated as overtime.
Maximum total working hours in a day are 10 hours and per week 60 hours.A worker
gets double of the basic as overtime allowance.
Overtime calculation: Basic ÷ 208 × 2 ×actual O.T. hours. Here, 208 means total working
hours in a month = (26 × 8 =208).No employee is allowed to work more than 10 hours a
day & 60 hours a week.In every seven days of week one day is off as weekly holiday.
 Wage And Benefit

In KDS Garments Industries Limited, the current monthly minimum wages is 5600.
Wages & salary breakdown is60% Basic and 40% allowances.

Incentives-
 Food allowance is tk 30
 Attendance bonus is 450 tk. for full attendance in the month 
 Provident subsidized
 Transportation facility is provided

Facilities-
 Employees and workers become permanent after four months provision period. All
permanent employees and workers are eligible to be a member of P.F. Every month
tk @8.33% of basic pay is deducted from each member and deposits the equal
amount to the fund.
 Two festival bonuses paid to every employee in a year equivalent to two basic
wages during two Eid festive.
 After completion of year if any employee who does not enjoy portion of earned
leave or leave not granted as per rules, the amount of that leave paid in cash.

 Leave policy & payment policy

According to Bangladesh Labor Law, employee leaves are of five types-

 Casual leave
Every worker will be entitled to casual leave with full wages for 10 (ten) days
in a calendar year. It will not be accumulated and carried forward to the
succeeding year (Section 115).

 Sick leave
Every worker will be entitled to sick leave with full wages for a total period of
14 (fourteen) days in a year. It will not be accumulated and carried forward to
the succeeding year (Section 116).

 Festive holidays
Every worker will be allowed 11 (eleven) days festival holidays with full
wages in a year. A worker may be required to work on a festival holiday but 2
(two) days additional compensatory holidays with full wages & a substitute
holiday shall be provided (Section 118)

 Annual Leave
Every adult worker who has completed a period of one year continuous
service in the establishment will be allowed leave & it calculated at the rate of
 01 day for every 18 days of work (Section 117). Only Earned leave can carry
forward to the succeeding year. Any leave applied for by a worker but refused
by his employer shall be added to the credit of such worker.

 Maternity Leave
According to section 45&46, Employers are liable to provide maternity
benefits to the employee who has completed at least 6 months of service with
the employer by the date of confinement. Every woman employed in any
establishment shall be entitled to the payment of maternity benefit:
 08 weeks (2 month) preceding the tentative date of her delivery.
 08 weeks (2 month) immediately following the said of her delivery.

In KDS Garments Industries Limited, There are 3 types of leaves are provided to the
employee in a year.
 Festival holiday- 6 days with full pay.
 Casual and sick leave- 10 days with full pay.
 Earned leave- 4 days with full pay.

The leave system for workers is good here. KDS Garments Industries provides One (1)
day monthly leave. Sick facility is good. Sick time salary is continued.

 Health and Hygiene issues

According to Bangladesh Labor Law 2006, all the floors, windows, and other work
rooms of the factory must be kept in clean and free from effluvia arising from any
drain, privy or other nuisance in every week. All the walls, inside partitions, all
ceilings, tops of rooms, and walls, side and tops or passages must be painted or
varnished, be repainted or re varnished at least once in every three years, and where
they are painted or varnished and have smooth imperious surface, be cleaned at least
once in every fourteenth months, or kept white- washed or color-washed and the
white-washing or color washing shall be carried out at least once in every fourteen
months. Ventilation and temperature will secure to workers for reasonable conditions
of comfort and prevent injury to health. Effective arrangements shall be made in every
establishment for disposal of wastes and effluents, humidity of the air should be
artificially increased, and the water used for the purpose shall be taken from a public
supply, or other source of drinking water, or shall be effectively purified before it is
so used. Work-rooms shall be kept clean on both the outer and inner surfaces and free
from obstruction as far as possible. A sufficient supply of wholesome drinking water
marked ‘Drinking water’ in Bangla shall be ensured. Separate latrine and urinal for
male and female that shall be adequately lighted and ventilated, and maintained in a
clean and sanitary condition at all times. Employer should provide, at convenient
places, sufficient number of dust beans and spittoons which shall be maintained in a
clean and hygienic condition.

In KDS garments, maximum hygienic conditions of above are fulfilled properly. But
the medical facility is only primary treatments & primary medicines.
 Safety issues

In KDS Garments Industries Limited, following machines are used-

 Two needle
 Over lock
 Plain machine
 Flat lock
 Heal seal machine

While working workers are provided following safety tools-

 Cap
 Musk
 Id card
 Uniform
 Fire extinguisher
 Emergency staircase
 Keep legs on pedal

According to Md. Asgar Ali (Assistant Manager of KDS Garments), this garments
industry provides 100% safety.

 Welfare issues

In KDS Garments Industries Limited, a separate welfare officer is appointed to ensure the
welfare of the employees. His job responsibilities are-
 To do accomplishment of welfare for workers
 To manage holidays for workers
 To do test of recruited workers and then fixed their designation.
 To see worker’s file
 To keep cleanliness of floor by cleaner
 To give instruction for safety and negotiation of conflicts

 Working Environment

KDS Garments Industries Limited is absorbing modern garments technologies. All kinds
of modern garments industry facilities are present there. They decorate their office as
open office system. The working environment is medium. There exist friendly labor
manager relationships. The conflicts among employees are solved & reduced by
motivation & training. They follow standard procedures to take disciplinary actions as per
labor law 2006. Inappropriate on-job behaviors & dishonesty is been taken here seriously
as disciplinary problem. They take oral warning, written warning, and suspension as
disciplinary action.
 Facilities that are provided to workers

 Less overtime.
 Good behaviors by supervisor.
 Good medical facility
 Rest room facility
 Less work pressure
 New learning from workplace
 Immediate treatment facility
 Having late opportunity only for two days
 Workers get bonus for not taking any leave in a month
 Child care room facility
 Maternity benefit

 Promotion, demotion, transfer and absenteeism

KDS Garments Industries Limited evaluates its employee’s performance for promotion.
The evaluation process depends on annual confidential reports (ACR) of employees and
officers, productivity, skills, experience and other criteria. If an employee can continue
his job in a position with satisfaction, then the KDS Garments made a promotion of that
employee. Moreover, annual confidential report (ACR) is the considerable factor in case
of promotion. Here, there is no demotion system. Employees are transferred from one
department to another department for organizational benefit as well as for employee’s
benefit. Here, all employees have an identity card. They have to punch it for entrance &
exit. In this way absenteeism is counted.

 Some Problems in KDS Garments

KDS Garments Ltd. have many facilities for their employees but in some cases they are not
fulfilling some compliance issues. Those issues are –

 KDS doesn’t maintain labor law properly.

 There is no trade union.
 Safety tools are not much.
 Health facilities have given only primary treatment.
 Reward system is not proper.
 Salary range is very poor for workers.
 Chapter -4

 Current situation of compliance management in Bangladesh garments

industry

The garment industry of Bangladesh has been the key export division and a main source of
foreign exchange for the last 25 year & workers are the driving force of it, so we should think
about their safety to protect them from unexpected accidents. Although Bangladesh Garment
Industry is in good condition, the workers do not get better facilities. In the companies of
Bangladesh the wage rate is comparatively lower than the higher work load of workers. There
has lots of discrimination in wages fixation and other facilities between male & female
workers. Workers don’t get any training program about health and fire safety that’s why lack
of awareness among the workers and the owners. They also face many health related problem
like Asthma, Eye problems, Skin problem, back pain, headaches. In garments industry of
Bangladesh there have no recreation facilities for workers. Sexual harassment by lineman,
supervisor and manager to the female workers.Pure water is not available for drinking and
washing for workers. Most of garments have no baby care center for female workers. It is
found that most of the garment industries do not use safety sign according to the ILO
Conventions. Many routes are blocked by storage materials. Many garment industries does
not have fire and smoke alarm systems. Fire in a Bangladesh factory is likely to spread
quickly because the principle of Compartmentalization isn’t practiced. All garments owner
must maintain the Labor Law 2006 and establish the better environment for their workers.

 Conclusion and Recommendations

 Conclusion
KDS Garments Industries Limited is the largest export oriented garments manufacturing
company in Bangladesh. They believe in quality and time and highly emphasized in
maintaining a concerted harmony in its working process and its environment. KDS Garments
Industry Ltd. has a strong and labor friendly environment. KDS tries to maintain all health
and safety issues, legal rights, working time and benefits which are related to compliance.
The overall situation of Compliance Management in KDS Garments Ltd is satisfactory. All of
the employees are satisfied with their works because the KDS Garments Ltd believes in
dynamism. The overall environment of the Garments is modern and dynamic.
  Recommendations
KDS Garments Ltd is the most flourishing garments sector in Bangladesh and it would be
imperative that each and every issue related to improvement of compliance management for
their employees is strictly followed to survive in the global market. Owner and manager of
KDS Garments Ltd must emphasize on employment condition, working conditions, salary
structure and reward system and occupational safety and health management. KDS can
arrange some safety campaigns for creating awareness. Company must arrange a training for
fire fighting. Company also ensure the recreation facility for workers. Moreover, regular
practice of compliance codes of conduct can bring higher price of products, lower labor
unrest, less worker turnover rate, highest worker morality, highest productivity and product
quality, smooth industrial relation as well as global image and reputation.

Questionnaire on
“KDS Garments Industries Limited”
KDS Garments limited (KDS) is one of the leading apparel exporters in global
market and it has own the confidence of the same in turns of quality, price and
delivery.

G-4 Floor activities:-We are doing internship at KDS garments at G-4 floor.
Apparel has been finished from cutting to packing here. In this floor about 350
workers are doing their job. All labors are controlled by a manager.
Interview session:-

Md. Asgar Ali

Assistant Manager

1) Job responsibility:-
a) Find out the problem of Cutting, Sewing and Finishing and give them
instruction to solve.
b) To do retrenchment of the worker if he think.

2) When do you absence then who take yours responsibility?

 Md. Abdul Hasan
Production Executive.
3) What types of problems you usually face and how do you solve that?
Problems:-
 Target achievement.
 Low quality of sewing.
 Quarrel of workers.
 Less presence of workers in the floor.
Solution:-

 Encourage the workers to achieve the target goal of production.

 Show the good quality of sewing
 Negotiate and manage the quarrel of workers.
 Balance workers from one line to other line when less worker
presence in the floor.
4) Leave System??

=> Yearly 20 days.

5) Is KDS garments maintain labor law of Bangladesh?

 Don’t know.
6) Is there any trade union?

 No trade union.
7) Tell us about health, safety, and environment of KDS Garments?

 Health Facility is only primary treatment.

 Safety is 100%.
 Environment is medium.
8) What is Dissatisfaction of your job?

 All is ok.
9) What types of reward you achieved?

 No reward he gets in his 9 years job experience.

 When job responsibility increased then some remuneration has
given.
10) Tell us about your promotion history?

 9 years ago he started working from line supervisor and now he is

promoted in assistant manager of G-4 floor.

Md. Abdul Hasan

Production Executive

1) Job Responsibility:-
a)To solve the technical problem
b)To solve the Production problem
c) To solve theworkers problem
d) To see all problem after manager
e) To take full responsibility when manager absent

Kamrul Ahsan Chowdhurey

Welfare Officer

(1) JOB Responsibility:-

a) To do accomplishment of welfare for workers
b) To manage holiday for workers
 c) To do test recruitment workers then fixed their designation.
d) To see worker’s File.
e) To keep cleanliness of floor by cleaner
f) To give instruction for safety and negotiate of conflict.

2) Rewards-> No special reward.

3) Promotions->at first he was an assistant welfare then he has been
got promotion for welfare officer.
4) Leave--> yearly 20 days

Mohammad Farid
Line Supervisor

1) Job responsibility
 Line setting
 Follow up to the workers
 Check the product quality
 Compliance (Rules, discipline, quality, production, team work)
2) Facilities

 Less facility
 Yearly 20 days
3) Reward

 Reward on target fill-up.

4) Promotion

 Helper to line supervisor.

5) Satisfaction on job

 Satisfy
6) Medical facilities

 Get primary treatment from doctor

 Get primary medicine
 Worker (disguise name)

(1) How are the facilities provided by KDS garments?

 He is more satisfied for remaining less overtime.
 His supervisor behavior is so much better.
 Medical facility well
 Having rest room facility
 work pressure less
 Having more new learning workplace
 To manage immediate treatment
 Having late opportunity only for two days
 Worker get bonus if he don’t take any leave in a month.

(2) How are the systems of leave?

 Monthly 1 day
 Sick facility good
 Sick time salary continuing
 Leave system well

(3) Do you get bonus at the time of festival?

 Yes, the bonus procedure is (1/3 of main salary).This bonus is
available since two times.

(4) Are you satisfied to stay here?

 Satisfied to do job here.
 Satisfy for getting salary in proper time. (Within 7 days at the end
of time).
 Having facility to keep child care room.
 Having maternity benefit.

(5) What types of extra benefit should be provided to you?

 To do increase Eid bonus.

(6) Tell me some problem about your garments?
 No any problem.
 Treatment facilities are less.

 Machine Name:-
a) Two needle
b) Over lock
c) Plain machine
d) Flat lock
e) Heal seal machine
 Safety Tools:-
a) Cap
b) Musk
c) Id card
d) Uniform
e) Fire extinguisher
f) Keep legs on pedal.

 Thousands gratitude to KDS garments authority for their

outstanding cooperation.
 Special thanks to Saiful Abedin sir (AGM, HR and ADMIN).
 Bibliography

http://www.kdsgroup.net/
http://www.bangladeshworkersafety.org./progress-impact/progress-reports
http://rmgbd.net/compliance-develop-in-bd-apparel-industry-significant-mashiur/
https://www.academia.edu/9538797/Compliance_Management_Practices_on_Rea
dymade_Garment_Industry_in_Bangladesh_An_Exclusive_Study
https://en.wikipedia.org/wiki/Bangladeshi_RMG_Sector
https://www.mckinsey.de/files/2011_McKinsey_Bangladesh.pdf
https://www.academia.edu/people/search?utf8=%E2%9C
%93&q=current+situation+of+compliance+management+in+garments+industry+in+
Bangladesh+in+2016
http://compliancectg.blogspot.com/2014/01/workers-welfare-fund-by-bgmea.html
http://documents.mx/search/?q=compliance+issue+in+Bangladesh

THE END