Industrial Relations

Submitted To:
Tasnuva Rahman Lecturer Faculty of Business Administration Eastern University

Submitted By:
Romana Akter Id: 081200117 Sec: 02 Bachelor of Business Administration

Eastern University

Introduction:

Industrial dispute has been touted as a major constraint in the economy of Bangladesh. While poor management and inadequate institutional factors were widely blamed for the high propensity of industrial dispute, formation of workers behavioral intention of industrial dispute has hardly been studied in the context of Bangladesh. As a former colony, after the independence Bangladesh adopted labor laws and policies that prevailed during colonial British era and the Pakistani period. However, the new government of Bangladesh declared a labor policy in 1972, which recommended reduction of trade union activities in welfare organizations. The right to strike and collective bargaining in the nationalized industries was prohibited for six months by a Presidential order in 1972. In 1973, the right to strike and lockout was also withdrawn by the Predicting Labor Unrest through the Lenses 25 Government. While these activities sowed the seed of distrust between workers and managers, considerable progresses have been made in the 21st century with the introduction of new Labor Law in 2006. Before the adoption of Labor Act of 2006, there were about 46 laws in force in Bangladesh encompassing labor and industrial sectors. However, Committee of Experts have pointed out that, there are still several restrictions on the right to strike. According to the Labor Act 2006, it requires three-quarters of the members of a workers organization to consent to a strike (sec. 211(1) and 227(c) of the Act). The Act also prohibits strikes for a period of three years from the date of commencement of production in a new establishment, or an establishment owned by foreigners (sec. 211(8) and 227 (c) of the Act). While it is quite understandable that, Government wanted to attract foreign investors by putting a protective clause, it certainly did not do enough to make sure that the foreigners are not exploiting this facility. The barriers that the Government had set up to in the frame of the Labor Act, 2006 might have also curtailed the option for workers of going for a strike as a reaction to industrial dispute.

Overview of the industry:

The success story of AMTRAnet GROUP goes back in the year 1995, when the management started their journey with one single garments unit. Now AMTRAnet GROUP is a pioneer in the Garments sector and export to premier buyers in USA and Europe. They are working for some renowned buyer like H&M, Carrefour, Hagger, Pull & Bear, NKD, Primark etc. They need all kind of fabric and yarn sources from China and Indonesia. AMTRAnet engaged in manufacturing & exporting of Dress Pant, Chino-Pant, Pre Cured Shirt & Plain & jacquard Sweater with Printing, Embroidery and Washing plant. As a result of their dedication and increased customer satisfaction by the end of the year 2000 they expanded gradually with 3 more garments manufacturing units. Within this period they also set-up one accessory and carton to strengthen their backward linkage support. To meet their customer continuous demand and to enter into the value added market by the year 2006 they expanded once gin and established Garment Export Village ltd (GEVL). GEVL is a ten storied building with 8 different manufacturing units- of them wrinkle free trouser unit, dress, shirt and trouser units, multi-gauge jacquard unit, in-house washing, painting, embroidery units and other auxiliary unit. Besides the large manufacturing facilities and long standing experience. Their strength also rely on high skilled human capital-professional operating team, quality control team, experience and young

energetic merchandising team members. Moreover they installed world-class brand machineries in garments factories.

Compliance Management System of AMTRAnet GROUP:

Effective implementation and monitoring the principles of management throughout the organization with compliant of the national & international law / legislation and standard to improve relation between employees and management

Objectives:
Meeting compliance with the country law & customers Code of Conduct (CoC). To compliance with social responsibility. Maintaining high standard of health, safety and environment. Knowing and meeting the applicable statutory and regulatory requirements. Providing necessary resources including knowledge and training to employees.

Focus of the Compliance Management System: Employment Policy:

Child Labor: Children are strictly prohibited to be employed.

Equal Treatment / No Discrimination: All employees have equal access to jobs. Compensation: Wages paid as per legally mandated minimum rates. Working Hours: working hours followed with the prevailing laws. Leave: Employees are entitled as per legally mandated leave. No Harassment or Abuse: Work environment free of harassment or abuse. Voluntary Employment: Forced labor, involuntary prison labor is not allowed. All workers are oriented before going to the workstation.

Workplace Environment of factory:

Floors are designed and allocated as per international compliance standard. Equipment and machineries are allocated with compliant. Space for employees is maintained as per standard in the floor. Work stations are properly ventilated. Floors are maintained neat and clean. Separate store for fabrics and accessories. All goods in the stores are properly labeled. Bin cards available.

Health & Safety:

Assured a safe and hygienic working environment. Appropriate and adequate personal safety equipment and clothing are provided. Employees are provided potable drinking water, hygiene toilets, & washing facilities. All electric appliances are maintained by qualified engineers and electricians.

 Noise and lights are maintained as per standard. Only trained and designated persons are handled chemicals and heavy materials. Available safety instructions and MSDS are provided near to the work station. Awareness programs are conducted with the employees periodically to aware H & S. Sufficient first-aid boxes are provided in the work station. A well equipped medical centre is provided with full time doctor and nurses.

Fire Safety:
Sufficient Fire extinguishers, automatic fire hydrant and other equipment are installed.

Workers are trained and wear identification badge. Aisles, exits and stairs are maintained free of obstructions and marked permanently by using color tiles.
Electronic fire alarm system in place. Smoke detector, public addressed (PA) system and

Emergency lights are installed. Every floor has separate evacuation plan. All employees are insured by a group insurance policy.

Security:
Company has won trained sufficient security guards for all factories. A written security policy has been established as per requirement of C-TPAT. All premises are secured by the Close Circuit TV Camera (CCTV Camera). Appropriate measures takes, such as secure premises to prevent entry, restricted access to the production facility by non-employees, authorized ID-cards and escorting of visitors while in the facility etc.

Workers Welfare:
Workers welfare committee formed in the factory. Welfare officer communicates with the committee. Committee meeting held in every month. Separate dining room for male and female. Separate pray/ religious room. Childcare room having trained babysitter.

Environmental Protection:
All factories of the group are compliant with national environmental legislation.

 A 250 M3 Effluent Treatment Plant (ETP) has been established in the factory to treat the effluent of the factory. A written policy has been introduced to manage and dispose the wastage.

Theoretical review with reference:

An industrial dispute may be defined as a conflict or difference of opinion between management and workers on the terms of employment. It is a disagreement between an employer and employees' representative; usually a trade union, over pay and other working conditions and can result in industrial actions. When an industrial dispute occurs, both the parties, that is the management and the workmen, try to pressurize each other. The management may resort to lockouts while the workers may resort to strikes, picketing or gheraos. As per Section 2(k) of Industrial Disputes Act,1947, an industrial dispute in defined as any dispute or difference between employers and employers, or between employers and workmen, or between workmen and which is connected with the employment or non-employment or the terms of employment or with the conditions of labor, of any person. This definition includes all the aspects of a dispute. It, not only includes the disagreement between employees and employers, but also emphasizes the difference of opinion between worker and worker. The disputes generally arise on account of poor wage structure or poor working conditions. This disagreement or difference could be on any matter concerning the workers individually or collectively. It must be connected with employment or non-employment with the conditions of labor. From the point of view of the employer, an industrial dispute resulting in stoppage of work means a stoppage of production. This results in increase in the average cost of production since fixed expenses continue to be incurred. It also leads to a fall in sales and the rate of turnover, leading to a fall in profits. The employer may also be liable to compensate his customers with whom he may have contracted for regular supply. Apart from the immediate economic effects, loss of prestige and credit, alienation of the labor force, and other non-economic, psychological and social consequences may also arise. Loss due to destruction of property, personal injury and physical intimidation or inconvenience also arises. For the employee, an industrial dispute entails loss of income. The regular income by way of wages and allowance ceases, and great hardship may be caused to the worker and his family. Employees also suffer from personal injury if they indulge into strikes n picketing; and the psychological and physical consequences of forced idleness. The threat of loss of employment in case of failure to settle the dispute advantageously, or the threat of reprisal action by employers also exists. Prolonged stoppages of work have also an adverse effect on the national productivity, national income. They cause wastage of national resources. Hatred may be generated resulting in political unrest and disrupting amicable social/industrial relations or community attitudes. (http://industrialrelations.naukrihub.com/industrial-disputes.html)

Causes of Industrial Disputes

The causes of industrial disputes can be broadly classified into two categories: economic and non-economic causes. The economic causes will include issues relating to compensation like wages, bonus, allowances, and conditions for work, working hours, leave and holidays without pay, unjust layoffs and retrenchments. The non economic factors will include victimization of workers, ill treatment by staff members, sympathetic strikes, political factors, indiscipline etc. Wages and allowances: Since the cost of living index is increasing, workers generally bargain for higher wages to meet the rising cost of living index and to increase their standards of living. In 2002, 21.4% of disputes were caused by demand of higher wages allowances. This percentage was 20.4% during 2003 and during 2004 increased up to 26.2%. In 2005, wages and allowances accounted for 21.8% of disputes.

Personnel and retrenchment: The personnel and retrenchment have also been an important factor which accounted for disputes. During the year 2002, disputes caused by personnel were 14.1% while those caused by retrenchment and layoffs were 2.2% and 0.4% respectively. In 2003, a similar trend could be seen, wherein 11.2% of the disputes were caused by personnel, while 2.4% and 0.6% of disputes were caused by retrenchment and layoffs. In year 2005, only 9.6% of the disputes were caused by personnel, and only 0.4% was caused by retrenchment.

Indiscipline and violence: From the given table, it is evident that the number of disputes caused by indiscipline has shown an increasing trend. In 2002, 29.9% of disputes were caused because of indiscipline, which rose up to 36.9% in 2003. Similarly in 2004 and 2005, 40.4% and 41.6% of disputes were caused due to indiscipline respectively. During the year 2003, indiscipline accounted for the highest percentage (36.9%) of the total time-loss of all disputes, followed by cause-groups wage and allowance and personnel with 20.4% and11.2% respectively. A similar trend was observed in 2004 where indiscipline accounted for 40.4% of disputes.

Bonus: Bonus has always been an important factor in industrial disputes. 6.7% of the disputes were because of bonus in 2002 and 2003 as compared to 3.5% and 3.6% in 2004 and 2005 respectively.

Leave and working hours: Leaves and working hours have not been so important causes of industrial disputes. During 2002, 0.5% of the disputes were because of leave and hours of work while this percentage increased to 1% in 2003. During 2004, only 0.4% of the disputes were because of leaves and working hours.

Miscellaneous: The miscellaneous factors include

Inter/Intra Union Rivalry Charter of Demands Work Load Standing orders/rules/service conditions/safety measures Non-implementation of agreements and awards etc.

(http://industrialrelations.naukrihub.com/causes-of-industrial-disputes.html)

Analysis of Industrial Disputes

The number of industrial disputes in country has shown slow but steady fall over the past ten years. In 1998, the total number of disputes was 1097 which fell by more than half to 440 in 2006.It is being estimated that this trend will continue in 2007 as well. To support this, only 45 cases of disputes have been recorded during the first four months of 2007. This significant decline is attributed to the serious attempts made by industries to improve industrial relations with their workers. However, a deeper look at the data reveals that the number of mandays (i.e., the industrial unit of production equal to the work one person can produce in a day) lost due to disputes has not come down as significantly. The country, on an average, lost 25.4 million mandays of work annually between 1998 and 2006, which might have affected its industrial output. More than 2.14 lakh mandays were lost due to work stoppages in 23 industrial disputes during January to March 2007. Though there has been a decline in the number of strikes, the country still witnessed some major strikes between 2004 and 2006, like those in Honda, Escorts, Apollo, and Skumars factories and in SBI bank.

On analyzing the data sector wise, it is clear that the private sector has witnessed greater number of disputes as compared to the public sector. In 2005, only 57 disputes were recorded in public sector which resulted in a wage loss of 79 Crores. In contrast to this, 399 disputes were recorded in the private sector. In the recent past, maximum number of disputes has been recorded in the manufacturing, agriculture and mining and quarrying industries.

(http://industrialrelations.naukrihub.com/analysis-of-industrial-disputes.html)

Industrial relations among two parties:

According to the management their relationships with their workers for all the time are very moderate. Their workers can communicate with their management in a formal way. The management pays the wages per legally mandated minimum rates. The factory assured a safe and hygienic working environment. According to the workers of the factory there was a little bit conflict between management and workers in the earlier stages of their garment. They were not following the Code of Conduct given by the government. The workplace environment of the factory was not safe for the workers health. Working hours going in some cases over 24 hours in a row and forced overtime but the rates of the overtime are not paid. But now the relationship between the management and the workers in a very understanding level where both the parties try to fulfill their each other benefit.

Forms of conflict:
At first the conflict or the disagreement of the workers for the management system was covert conflict. The workers started to work in a slower space and also denied to share their view or thoughts with the management. The management failed to understand the covert conflict and imposed new new burdens to the workers. When the burdens given by the management was intolerable to the workers, they adopted sit down strike (overt conflict) where the workers cease to perform their duties but do not leave the work place. The situation went worse when a group of workers destroyed some expensive equipment of the factory. Then the management lock-outs or shutters down the factory for 2 to 3 days.

Parties involved in the conflict:

The management and the workers of the factory involved in the conflict. From the managements point of view they always try to solve the conflict with the workers but the workers try to acquire more over time payment from the management. This excessive want of payment will increase the expense of the factory. From the workers point of view they also try to solve the conflict with the management but they just want to achieve their human rights from the management.

Unfair labor practices:

Management: The management refused trade union in the factory and also if trade union
formed then they would choose the leader. They interfere in the workers choice which is forbidden in the labor law. Unions: The workers had broken some of the machineries of the factory. And also they sometimes lied to the management about their illness. According to the management the workers want to gain some extra money for their illness. But when the management wanted their medical certificate that time they failed to show that. There was some unwilling behavior from the workers.

Reasons of conflicts:
Institutional Causes: At first when the garments started its journey, it denied to accept trade
union in their factory. The management imposed that there couldnt be any trade union. If any trade union would be established than the management would decide the leaders of the union not the workers. Employment related causes: The amount wages of workers were not sufficient for the workers. So they worked overtime but overtime rates were not paid. Their working conditions are not safe for the workers health. There was not any fast- aid box for the workers.

Impact of conflict:
When the workers held sit down strike but a group of worker destroyed some machineries of the factory that time the management lock-outs the factory for 2 to 3 days. The owner faced a great lose because the worker destroyed the expensive machineries that they had imported. That time factorys production was zero and the management also did not paid their workers. For that conflict the reputation of the company was reduced in the market.

Role of trade union:

The main conflict was for the establishment of the trade union. During the period of conflict some people united for a solution. They discussed with their management for the betterment of both the parties. They represented the whole worker group. Now in the factory there is a trade union which discussed about incremental wages for the workers.

Conflict resolution process:

Management and union leaders later had a meeting to resolve the issue. A list of demands the trade union had submitted to the management. That time the management gave the assurance to the union that they will fulfill all the demands in next period of time. Surprisingly now the workers said that they have no bitterness for the management party.

Result of the conflict with Govt. interventions:

When the conflict arose in the factory and the workers did some destructive activities that time the management took the help of the government. The management said that they took the help of Govt. under industrial police who at first discussed with the workers. But when the workers denied and their aggressiveness was intolerable then the Govt. police bit the workers. Here the Govt. support the management group not the workers.

Conclusion:
It can therefore be concluded that the situation regarding workers conditions in the garment industry of Bangladesh are not different from the other countries workers. They need decent wages and humane working conditions. They need to know their rights and understand how to organize to realize those rights. At the first period of time there was a conflict between the management and the workers. The conflict that caused loses for both the parties but now considered as a sweet fruit which boots up their relationship. The management considers workers as their main component of their production.