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Labour unrest hangover in garment industry

Factories reopening in Gazipur, some still shut in Ashulia

BGMEA writes to US apparel body for price raise after wage hike


FE REPORT | November 14, 2023 00:00:00


Bangladesh's apparel apex body wrote to the American Apparel and Footwear Association (AAFA) for readjusting garment prices commensurate with the enhanced worker wages amid industrial action.

Meanwhile, sources said, factories in Gazipur began reopening with violent labour protests dissipating while majority of closed units in Ashulia hub remained under a shutdown.

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) in a letter to AAFA president and CEO Stephen Lamar made the call on November 08, a day after the government announced Tk 12,500 as minimum monthly wage for an entry-level garment worker.

"To ensure uninterrupted and smoother operation in the industry, it is important that prices of all goods which will be shipped from 1 December 2023 are duly adjusted/up-charged covering the increment in wage component," BGMEA president Farouqe Hassan said in the letter.

Furthermore, from now onward, all the business negotiations and deals will have to be made adhering to the new minimum-wage policy, he noted in the communication with buyers' body in the single-largest export market.

"Therefore, I would humbly request you to kindly pursue the AAFA membership, to collaborate with their Bangladeshi suppliers with due empathy and consideration," the letter reads.

The labour ministry set the new minimum wage at Tk 12,500 as the gross salary for grade-seven workers in a 56.25-percent increase in the gross wage with a 63.41-percent rise in the basic.

The new minimum wage came at a time when the global economy is passing through an unprecedented situation, so does Bangladesh's economy, the apparel-makers' association points out to underpin their request.

"The RMG industry in Bangladesh is feeling the heat of this crisis, especially with soaring inflation all our input costs have increased significantly, including of fuel, gas, electricity, transportation, etc. From the first of July this year the Bangladesh Bank has increased interest rates which made trade and investment finance more costly."

The implementation of the new wage structure would exert a huge financial impact on the factories, he said, adding that this will be challenging for many of the factories to implement the new wage structure in the current economic and financial circumstances.

However, "ensuring decent living of the workers also is a top priority for us, as well as for global brands and retailers".

"Since we have accepted the new minimum wage, we will ensure implementation of it, and we need your support in terms of responsible purchasing practice," BGMEA says in the letter.

Earlier on October 13, in a letter to Prime Minister Sheikh Hasina, a total of 15 US brands and retailers requested a transparent minimum wage review that involves all stakeholders and that does not lead to any retaliation.

The brands include Adidas, Gap Inc, Under Armour, Patagonia, Burton, Hugo Boss, Abercrombie & Fitch, Amer Sports, AEO Inc, Levi Strauss & Co, lululemon, SanMar, KMD Brands, PVH Corp and Puma.

In the letter, they acknowledged that apparel brands and retailers sourcing in Bangladesh have a role to play in enabling the recommendations and expressed commitment to implementing responsible purchasing practices to fulfill that role.

Meantime, a good number of closed garment factories resumed their operations Monday after remaining shut for several days following labour unrest on demand for wage hike.

Asked about the latest developments, the BGMEA president said all units but three-a unit of Standard group, Tushuka and Shadhin-- in Konabari and Kashimpur areas reopened the same day.

"Factory authorities of those three units are in talks with their respective workers and would reopen if they (workers) want to work shortly," he said.

Some factories have resumed operation in Ashulia and the rest 99 units would also resume operation within a couple of days if situation improves and workers want to rejoin, he further noted.

There was no report of labour protests or work abstention on Monday.

Earlier, a total of 130 factories in Ashulia, Gazipur, Mirpur and Uttara-- were closed sine die in accordance with labour-law provision 13 (1) last Saturday while some of them had announced closure since last Thursday (November 09) after workers clashed with police on a key highway and ransacked Tusuka, a top garment-manufacturing unit, along with a dozen other factories.

Of the closed units, 59 factories were at Ashulia, 25 at Konabari and one at Uttara.

The country's largest foreign-currency-earning sector had witnessed labour protests since October 23 after apparel makers proposed Tk 10,400 as minimum monthly wage against workers' demand for Tk 23,000.

Hundreds of garment factories remained closed for a couple of days since then and reopened on November 04 after the state minister for labour assured announcement of new wage on November 07.

The government announced Tk 12,500 as minimum monthly wage on November 07 that again sparked labour protests rejecting the new hike-in an additional spur to opposition blockade and troubles over polls.

Meantime, a total of four workers died-three during the clashes between workers and polices and one in a factory fire-during the two-week-long orgy of labour demonstrations.

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