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The business case for trade unions

Chaumtoli Huq
THE state minister for labour was quoted recently as saying that too many trade unions are bad for the garment sector. In a workforce of 4 million workers, the garment sector only has 200 registered unions, of which the bulk of those were registered in the last year. So there is no evidence to support the minister's statement. We sadly do know from experience that an unregulated industry, which fails to see all workers from the factory floor up to middle level managers as key partners to this industry's growth, is harmful for the owners and workers.
This is a curious public statement from a high ranking government official in light of the suspension of Generalised Systems Preference (GSP) for trade, which allows countries like Bangladesh to export to US markets at a duty free or preferential rate. One of the factors for GSP is for the country to demonstrate a genuine commitment to workers' rights, including the ability to form trade unions. Similarly, the European Union's Sustainable Compact with Bangladesh reflects a desire to see increased unionisation in the garment sector. For a government that is so reliant on funds from this industry, which totaled $21 billion in 2012-2013, it is surprising that the government fails to see how improved labour management relations are better for its own political and economic interests. Instead, both garment owners and government respond reflexively against unions thinking that they are giving up powers to workers, when they gain so much more in the process.
Instead of expending resources to prevent unionisation, the government should take a proactive effort to remove any and all obstacles to unionisation, and the BGMEA as the trade association in this industry should take a public stand against owners who prevent unions. Facilitating unions and empowering workers can only serve to enhance the image of an industry that is in dire need of improvements.
In many ways, employers benefit from unions in that they have one entity to deal with when they need to bargain with workers. Unions were formed to equalise the bargaining power between employer and workers, but in practice, they serve to maintain industrial peace and minimise industrial disruptions. Ultimately, workers give up the right to strike
and seek redress for their grievances through a collective bargaining process that helps employers to maintain day-to-day functions of their business. Stability is particularly critical in the highly competitive export oriented garment industry where owners need to meet stria deadlines, and cannot afford production delays. While workers surely benefit in this process, employers also have much to gain from unions. In the absence of a mechanism to redress basic grievances, workers have no choice but to demand their rights in the street. In the last year, much of the grievances from workers concerned wages, and routine faaory level disputes. Failure to address these disputes in a systemic way forces workers take their grievances to the street. If they do this for routine matters, it only aeates disruptions for the employer.
Unions also can make faaories attractive to buyers and investors. They will be assured that the presence of a union or a mechanism allowing for workers to have a voice most likely will minimise
any disruption in production. It is a way that a sophisticated owner can market him/herself in the highly competitive global market. Consumers have said they would be willing to pay more if they were guaranteed that workers were being paid fair wages. Garment owners can stand out from their competitors and can attraa business by demonstrating best labour-management practices, especially after Rana Plaza, where brands are concerned with their reputation.
Yet, owners are often opposed to unions in their faaories for shortsighted reasons, which is due to a lack of training on best labour-management practices. Owners see unions as intruders in their homes versus a potential value-added to their business. This mindset is in part due to the origins of this industry that grew exponentially with minimal regulations and no opportunities to understand best practices in labour-management Comments against unions only serve to harm the industry at this critical juncture of its growth when there is
increased scrutiny on the seaor from the international community. Owners should build an image of collaboration and partnership with their workforce, not one of control and competition. It is not always the case that all parties will benefit from an issue, but here, trade unions benefit both managers and workers in the industry.
The writer Is an American Institute for Bangladesh Studies (AIBS) Research Fellow examining the garment industry. She Is also the editor of www.lawatthemarglns.com Follow her on twitter @lawatmargins