COMMENT BY JILL TUCKER, LABOUR RIGHTS ADVOCATE: The announcement late last year of a 9 per cent annual wage increase for Bangladeshi garment workers has been met with cautious optimism. It is a significant acknowledgment of the contributions made by the millions employed in the ready-made garment (RMG) sector, which serves as the backbone of Bangladesh's economy.

However, while this wage rise is a step forward, it is neither sufficient nor sustainable in the long term without formalised mechanisms for ensuring fair wages.

Relying on sporadic adjustments to wages, driven by the sort of violent protests we have seen in recent months, is a short-sighted and reactionary approach that fails to address the root causes of discontent. 

When such protests occur, it is vital to examine the systemic issues underlying them. Lower wages are in the case of Bangladesh’s garment industry, quite clearly a symptom of deeper structural problems within that demand thorough investigation and long-term solutions.

In Bangladesh's garment industry, wages are typically determined through a combination of government directives, industry negotiations, and market conditions. The government plays a central role by setting a legal minimum wage, which is reviewed periodically, often under pressure from labour unions and international advocacy groups. These minimum wages are meant to ensure a basic standard of living but are regularly criticised as insufficient given inflation and living costs.

Employers, however, often adhere to this baseline, rarely offering wages above the minimum unless workers possess specialised skills. Factors such as factory size, export contracts, and buyer demands also influence wage levels. International brands, as significant clients, may exert pressure for compliance with fair labour standards.

Labour unions and worker protests occasionally push for higher wages, but union activities are often restricted, limiting their influence. Ultimately, the wage-setting process reflects a delicate balance between profitability for manufacturers and the socio-economic realities of the workforce.

ILO Conventions as a solution?

Bangladesh has ratified 36 ILO conventions, including eight of the ten fundamental ones. Notably absent from this list, however, are the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98). These two conventions form the bedrock of workers’ rights globally, establishing the framework for workers to organize and negotiate collectively for better wages and working conditions.

ILO Convention 87 guarantees workers and employers the right to form and join organisations of their own choosing without prior authorisation. This freedom is essential for empowering workers to voice their concerns and advocate for fair wages and better working conditions.

In Bangladesh, however, unionisation in the garment sector remains fraught with challenges. Workers often face intimidation, dismissal, or even physical harm when attempting to organise. The lack of legal safeguards under Convention 87 exacerbates this situation, leaving workers vulnerable and unable to effectively negotiate with employers.

ILO Convention 98 complements Convention 87 by focusing on collective bargaining rights. It obligates member states to promote voluntary negotiations between employers and workers’ organisations to determine terms and conditions of employment. Ratifying Convention 98 would provide a legal framework for collective bargaining in Bangladesh, offering workers a formalised path to negotiate for fair wages. 

Currently, the absence of robust collective bargaining mechanisms means that wage increases, such as the recent 9 per cent hike, are often dictated by government panels under pressure from both workers and factory owners, rather than through worker-employer negotiations.

Ratifying and implementing these conventions would represent a significant step forward for Bangladesh. It would not only align the country with international labour standards but also provide a structured mechanism to address wage disputes and other labour grievances. For the millions of garment workers who form the backbone of Bangladesh’s economy, these conventions offer the promise of dignity, security, and a fair share of the wealth they help create.

Dealing with unions is not merely a matter of compliance; it presents significant challenges for management. Negotiations with unions can be time-consuming and labour-intensive, requiring skills beyond those necessary for managing production. While these processes can be challenging, they also provide an opportunity to build respectful relationships with workers, which can enhance productivity and profitability in the long term. Recognising and honouring Conventions 87 and 98 is as much about fostering collaborative workplace dynamics as it is about labour rights.

Challenges in Ratifying ILO Conventions

While the benefits of ratifying Conventions 87 and 98 are clear, challenges remain. Employers and factory owners often resist these conventions, fearing that strong unions could lead to increased labour costs and reduced competitiveness. Additionally, our government has been reluctant to take steps that might upset powerful industry stakeholders or jeopardise the country’s standing as a low-cost manufacturing hub.

However, I believe the fear of reduced competitiveness is short-sighted. Numerous studies have shown that improved labour conditions can lead to higher productivity, reduced turnover, and enhanced reputations for both factories and the nation as a whole. Moreover, adopting these conventions would send a strong signal to global brands and consumers that Bangladesh is committed to ethical labour practices, potentially attracting higher-value orders and long-term investments.

It is crucial to acknowledge that the successful implementation of Conventions 87 and 98 relies heavily on the support of buyers. Unfortunately, there is no ILO convention specifically addressing purchasing practices, despite their integral role in labour rights compliance. Most brands commit to supporting freedom of association in their Codes of Conduct; however, they often fall short of ensuring fair negotiations with suppliers to uphold these conventions. The role of brands in enabling fair labour practices should not only be a commitment in principle but also a visible practice. Brands must align their purchasing behaviours to support suppliers, who often face substantial challenges in engaging workers and adhering to labour standards.

Of course, the discussion on fair wages cannot be separated from the purchasing practices of global brands. These brands wield immense power in the supply chain, often dictating prices, payment terms, and order volumes. In their quest for low production costs, many brands impose unsustainably low unit prices on suppliers.

For example, brands frequently delay payments or demand price reductions, leaving suppliers with little financial room to accommodate wage increases. These practices illustrate the need for systemic changes in how brands operate.

Expecting factory owners to bear the full cost of wage increases is neither fair nor sustainable. A collaborative approach is essential, involving brands, factory owners, workers, and policymakers. The government can play a crucial role by ratifying ILO Conventions 87 and 98, creating the legal framework necessary for collective bargaining and worker organisation.

But brands must also adopt responsible purchasing practices that enable fair wages, while factory owners should invest in improving labour conditions and productivity.

We must all play our part in making ours a fairer, modern and more stable industry which is attractive to international investors.