Govt mulls allowing trade unions with 20 workers, industry leaders warn of disorder

Highlights:

• Proposal: Allow unions with 20 workers, not 20% threshold
• Up to five unions may be permitted per factory
• Reforms aim to ease union formation across all sectors
• Critics warn changes could destabilize factories, invite political interference
• Labour leaders stress need for fair elections, functioning CBAs
• Without registration, unions lack legal power under current law

The Ministry of Labour and Employment is considering a proposal to allow trade unions to be formed with just 20 workers, scrapping the current rules that require at least 20% of a factory's total workforce. The move comes amid growing calls to ease obstacles to workers' rights to association. 

The draft reform, currently under review, also proposes raising the cap on the number of trade unions allowed in a single factory from three to five, according to ministry officials. 

They added that other rules related to union registration may also be simplified, and trade unions may be allowed in any sector, including non-profits.

However, the plan is already drawing criticism from industry leaders and experts, who warn the changes could invite disorder in the industrial sector, weaken management control, and provoke political interference.

The proposal was presented at a recent meeting of the Tripartite Consultative Council (TCC), which includes representatives from the government, employers, and workers. 

The matter is expected to be further discussed at the next TCC meeting scheduled for 31 July, as well as in the ministry's technical committee.

AHM Shafiquzzaman, secretary to the Ministry of Labour and Employment, confirmed the matter, saying, 'We will finalise the amendment in the next meeting, which will allow 20 workers of a factory to form a trade union, and permit up to five trade unions in a single factory.'"

A senior ministry official, requesting anonymity, said the Labour Reform Commission recommended replacing the percentage-based threshold with a number-based one. 

"This is supported by many international examples. If adopted, the change would allow unions in all sectors, including non-profits," added the official. 

According to Syed Sultan Uddin Ahmed, chief of the Labour Reform Commission, several Asian countries including India allow unions to be formed based on a minimum number of members. 

According to ILO's Better Work, there are opportunities to form trade unions based on numbers in several countries, where 7 to 20 workers can form a union in any factory.

Mohammad Mashooqur Rahman Sikder, joint secretary at the labour ministry, confirmed the reform process is underway, saying, "We are still in discussions, but the decision will be finalised soon."

Bangladesh once required 30% worker support to register a union – this was reduced to 20% in past reforms. As of now, Bangladesh has 9,937 registered trade unions, with 1,381 in the RMG sector. 

However, labour leaders claim fewer than 100 of these are active in the garment industry, and only around 40 enjoy collective bargaining status.

The ILO said it is in favour of the government initiative. In response to a question from The Business Standard, the ILO's Dhaka office said in an email that "freedom of association and collective bargaining are human rights and the foundation of sound industrial relations."

"The right of workers to organise does not automatically mean workers have the right to strike, nor that it will automatically lead to strikes. In fact, much unrest in Bangladesh occurs because workers do not have the right to organise, nor the right to bargain collectively," it reads.

The ILO also said, "Data and case studies from RMG factories in the Better Work Bangladesh Programme show that factories with functional Workers' Participation Committees or trade unions comparatively have less unrest or no unrest. Several protests by RMG workers have been staged by unorganised workers."

According to the ILO, the majority of countries establish minimum membership requirements based on a fixed number of persons, for example: Japan (2 members), Russia (3 members), Colombia (25 members), Peru (20 members for enterprise unions), Sri Lanka (7 members), Indonesia (10 members), and India (7 members).

On the other hand, Mali (20 members), Nepal (10 members), and Senegal (7 members) also have number-based trade union membership requirements.

A few countries set the requirement in percentage terms, e.g. Myanmar and the Philippines

Fear of instability

Factory owners and labour law experts fear that reducing the threshold so drastically could destabilise the industrial sector, particularly in the country's largest export earner – the readymade garment (RMG) industry.

"If only 20 workers can form a union, and up to five such unions are allowed in one factory, how will the management deal with constant demands?" asked Advocate Jafrul Hasan Sharif, who was involved in earlier labour law revisions. 

"This opens the door to factionalism and political interference," added Sharif.

Fazlee Shamim Ehsan, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said the ILO may be pushing this, but it won't help workers in the long run. 

"If a union of 20 workers in a 5,000-worker factory makes demands, it will only increase tension and discontent," he said, citing the example of Cambodia, where similar reforms were adopted under pressure but ultimately backfired.

Babul Akhter, general secretary of the Bangladesh Garment and Industrial Workers Federation (BGIWF), warned, "This may lead to a rise in politically affiliated unions inside factories. Instead of protecting workers, it could create fresh divisions."

Simply having more unions won't help without functioning CBA 

While some labour leaders have welcomed the initiative, others believe the registration process should be simplified and union elections be held fairly and regularly to make unions effective custodians of workers' rights. 

Joly Talukder, vice president of the Garment Workers Trade Union Centre, said, "There should be rights so that any number of workers can organise freely. We view this move positively if implemented sincerely."

Taslima Akhter, president of Bangladesh Garment Sramik Sanghati and a member of the TCC, said, "The proposal came up at the TCC meeting and we supported it. The owners, however, strongly objected."

Internationally, percentage-based threshold for union formation is not considered favourable and ILO had also recommended shifting to a fixed-number formula. But such a major deviation from existing practice should be backed by necessary amendments to some provisions of the labour act, such as those related to trade union registration and election processes, rights advocates suggest.

"Under the labour act, simply forming a union is not enough; obtaining official registration is essential for the union to function legally," Advocate AKM Nasim, former president, Bangladesh Labour Court Bar Association, earlier said, stating "significant obstacles" during registration from the Department of Labour.

Moreover, he pointed out that workers who organize unions often face retaliation from employers and even dismissal with little or no remedy from the labour office.

Holding regular trade union elections also remains an issue as a higher court ruling requires the labour office to monitor elections to all the unions, which proved problematic given the strength of the labour department and several thousand unions. 

To address this issue, the Labour Reform Commission recommended that unions should be allowed to hold elections independently with minimum oversight of the labour office.

"If not, isolated amendments may fail to ensure effective exercise of the right to association due to inconsistencies of the relevant sections of the law," Advocate Nasim said in an interview with Economic Intelligence Bangladesh, a TBS research publication.    

One member of the Labour Reform Commission, speaking anonymously, argued that reforming the election and function of collective bargaining agents (CBAs) may be more important than simply allowing more unions.

"Without an effective CBA election, even a large union is powerless. And if the CBA's work is blocked by other unions, it leads to deadlock. The law must define their scope clearly," the official said.