BGMEA calls for reconsideration of new labour ordinance, warns of risks to industry stability and investment

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has urged the interim government to review the recently approved Bangladesh Labour (Amendment) Ordinance 2025, warning that some of its provisions could destabilise the country's key export sector and deter foreign investment.

Speaking at an emergency press conference today (28 October) called in response to the approval, BGMEA President Mahmud Hasan Khan voiced strong reservations about the revised provisions on trade union formation in the ordinance, describing them as "imbalanced and impractical."

He noted that the decision to lower the threshold for forming trade unions could create conflict and disrupt production across the readymade garment sector, which remains the backbone of Bangladesh's export economy.

Briefing reporters, the BGMEA president highlighted that during extensive discussions in the Tripartite Consultative Committee (TCC) and the Working Committee, a balanced proposal was agreed upon – allowing trade unions to be formed with the consent of at least 50 workers in factories employing between 50 and 500 workers.

"But, this consensus was later overturned in an Advisory Council meeting, which unilaterally revised the threshold to 20-300 workers, dividing factories into five different categories," he added.

Calling the decision unrealistic, he argued, "If only 20 workers are allowed to form a union, individuals who are not directly involved in the industry may lead union activities, which will trigger internal conflict, instability, and disruption in production."

According to him, such a structure would erode investor confidence and discourage entrepreneurs from establishing or expanding factories.

The garment owners association also objected to the inclusion of "employees/officers" in the definition of "workers", saying this would blur distinctions between management and labour.

"This will create confusion in decision-making, disrupt responsibility distribution, and lead to serious management challenges," Mahmud Hasan said.

The BGMEA president also criticised what he described as procedural injustice, saying that many of the key decisions – earlier approved unanimously in the TCC and Working Committee meetings – were altered without discussion during the Advisory Council's final approval.

"This undermines the mutual trust among workers, entrepreneurs, and the government," he said.

Citing international practices, Mahmud noted that in India, a union can be formed with the consent of 10% of workers or at least 100 workers, and in Pakistan, 20% worker consent is required.

"This clearly shows that Bangladesh's new provision – allowing unions with only 20 workers – creates the weakest and most unstable structure in South Asia," he warned, adding that it sends a negative signal to foreign investors and could discourage future investment inflows.

At the conference, attended by representatives of major trade bodies, the president also raised other pressing issues such as LDC graduation and the recent increase in port charges at Chattogram. 

Mahmud said the country's export-oriented and manufacturing industries are facing an unprecedented set of challenges, both nationally and internationally. 

He warned that while Bangladesh's competitors have already adopted investment-friendly policies, technology upgrades, and labour law reforms, the current ordinance could set the country back.

"If such impractical laws are enforced, foreign investment will decline, exports will suffer, industrial unrest will rise, and the economy will weaken," he cautioned.

He urged the government to reconsider the approved ordinance in light of the industry's realities and the country's global competitiveness.

Responding to the shipping ministry's claim that port charges had not been raised in 40 years, the BGMEA chief said, "This needs clarification. Any abrupt fee hike will burden exporters struggling with high costs and low margins."

Mahmud urged the government to ensure a business-friendly environment, resolve the gas crisis, simplify customs and NBR procedures, improve logistics and infrastructure, and ensure access to low-cost financing.

Urging the government to push back LDC graduation, the BGMEA president said, "Until all necessary preparations are in place, we sincerely urge the authorities to extend Bangladesh's LDC graduation timeline by at least three more years to safeguard our competitiveness and ensure a smooth transition."