Industrial Relations in Bangladesh: Human Resource Practices in BD

Industrial Relations in Bangladesh
Lecture 8
Human Resource Practices in BD

HRM 430
© Faisol Chowdhury 1
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 2

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 3

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 4

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 5

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 6

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 7

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 Uni 8

on Research Network 2005
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.

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

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.

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 12

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.
13
 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.

 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.

 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.

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.

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.

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.

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)

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?

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.

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?

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 24

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 25

Too Difficult to Handle Union Representative?
26
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?
27
 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?
28
 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?
29
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 30
Overview
31
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.
32
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.
33
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
34

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Industrial Relations in Bangladesh

Human Resource Practices in BD

 Industrial Relations – The study of the employment relationship. It

 It involves employees and their unions, employers and their

 Employment Relations – the arrangements made by employers and

 The focus of ER is more on workplace relations than the traditional

Bray et al. 2005; Dessler 2004 2

 Emergence of IR can be traced back since the beginning of 17th

 Gradually, workers collective voice started raising across all over

 HRM emerged as a result of educationists’, researchers’, and

 Misconception exists that IR supports employees and HR supports

Bray et al. 2005 3

 Three major components of any industrial relation system:

 Employer – organisation, management, employer association.

 Employee – union, worker, employee, labourer.

 Government / Monitoring Body – the government, federal,

Bray et al. 2005 4

 Collective bargaining – the process whereby workers organise

 Enterprise bargaining – an employer and a trade union acting on behalf of

 Individual bargaining – a bargaining between a particular employee with

Bray et al. 2005; Bamber et al. 2004 5

 The union participation is decreasing rapidly since last decade:

 Industrial shift – manufacturing to service

Holland 1999, p.63 6

 Sramik Karmachari Oykeya Parisad (SKOP) – Peak body

Global Union Research Network 2005 7

 In 2002, Bangladesh's total workforce consisted of approximately

 Only 1.8 million belonged to unions, most of which were affiliated

 A slow 5% growth rate has been observed (in 2004).

 There are no reliable labour statistics for the large informal

 Union involvement is strongest in the state owned organisations

Fair Labor Association 2004; Global Uni 8

 Union members / representatives and leaders are not industry /

 Professionals, educated and young graduates tend to avoid

 Union structure is too much bureaucratic and complex. A broken

Global Union Research Network 2005 9

 Federation of Bangladeshi Chamber of Commerce and Industries

Global Union Research Network 2005 10

 Very powerful bodies to regulate and monitor industrial

 80% of the employers are covered by these associations.

 A significant number of industries are covered by these

 85% of the managerial employees are covered by these

 Almost free from political influences.

Global Union Research Network 2005 11

 Bangladesh has ratified seven of the eight fundamental ILO

 In 1972 Bangladesh ratified both fundamental ILO Conventions

 Freedom of Association and Protection of the Right to

 Right to Organise and Collective Bargaining (Convention 98).

Fair Labor Association 2004 12

 Determining the role of the Bangladeshi government in

 In one hand the government regulates the union movement very

 International pressures from ILO, ICFTU, developed countries’

 When Bangladesh ratified the International Covenant on

 The reservation indicated that there would be some limitations

 The Constitution of Bangladesh provides for the right to form

Fair Labor Association 2004 14

 Bangladeshi labour law requires a workplace to have 30% union

 Prior to official registration, which signifies state recognition of the

 The ILO's Committee of Experts on the Application of

Fair Labor Association 2004 15

 According to the International Confederation of Free Trade

 In this environment, employers persecute organisers of fledgling

 Moreover, the government takes measures to ensure that the