The amendment to the Labor Act of 2013 has gone into effect in Bangladesh, which makes safety committees at factories with at least 50 employees compulsory and also establishes a welfare fund for injured workers.
The promised ruling for the labor law amendment was published in Dhaka on Wednesday.
“The law was enacted, but it could not come into force. This is the rule to implement the law,” Dr. Ahsan H. Mansur, executive director of the Policy Research Institute in Dhaka, explained. The labor law enacted in 2006 was amended in 2013, after the collapse of the eight-story Rana Plaza building, in which more than 1,133 workers were killed.
“No one has had a chance to study it properly just yet. Substantive discussions about it will actually begin in the next week,” he told WWD.
These discussions will take on an international dimension as well since a U.S. delegation led by Michael Delaney, assistant U.S. trade representative for South and Central Asia, (USTR), will visit Bangladesh from Saturday to Wednesday.
The delegation is expected to focus on the efforts by the government of Bangladesh and other Bangladeshi institutions in support of the Sustainability Compact and the Generalized System of Preferences (GSP) Action Plan, which was revoked in 2013.
Progress in ensuring the rights and safety of labor has been one of the important agenda items to reinstate the GSP facility for Bangladesh.
Others members of the delegation include Michael O’Donovan, director for Labor Affairs, Office of the USTR; Bruce Levine, office director, Democracy, Human Rights and Labor (DRL), State Department, and Jennifer Goodyear, international relations officer, International Labor Affairs Bureau (ILAB), Department of Labor (USDOL).
The visiting team is expected to meet with government officials, employers, workers, trade unions, the International Labor Organization, the Alliance on Bangladesh Worker Safety, the Accord for Fire and Building Safety in Bangladesh and other organizations during their trip as well as visit the Bangladesh Export Processing Zone Authority in Chittagong.
Although reactions to the ruling have been muted so far, there is a general sense of relief in the industry that the amendment can now be implemented.
According to industry analysts, the labor law amendment has clarified a few things, including issues related to safety committees at factories, which are being seen by global brands and retailers as crucial to ensure safety for workers. The safety committees will be compulsory in a factory with at least 50 workers, with a minimum of six and a maximum of 12 members on the committee; these members would be representatives from both owners and workers.
A question raised earlier by the International Labor Organization (ILO) and the Rana Plaza Coordination Committee about funds to ensure compensation to workers in case of any disasters or eventualities in the future has also been addressed with the announcement of a welfare fund to which the owners of garment-exporting factories would contribute 0.03 percent of their export value.
Half of this amount would be kept for the welfare fund and the other half to handle emergency situations.
The issue of festival allowance has been causing confusion in recent months with protests and calls for payments of the bonus before workers go on Eid holidays. The question of the amount of payment as well as the workers who are eligible for the bonus has caused unrest among workers and factory owners. According to the amendment, the agreed amount of festival bonus will be one month basic wage to be paid to every worker who has finished a year on the job. The workers will get two festival bonuses a year.
“We have been trying to make the best balance; this time has been spent in getting the opinions and get agreements on all matters of importance,” said a senior government official, who requested anonymity.
Mansur said that while the rule is on paper, how freely labor will be allowed to form committees remains to be seen, and will require “a great deal of adjustment from factory owners as well as responsibility on the part of labor.”
“There is a fundamental difference between the politics in the U.S. and in Bangladesh. Many of the unions in public sector enterprises here were extensions of political parties. This is a genuine concern and if it is not understood in the right context the entire industry can start shutting down. It has to be handled carefully,” he said, adding that communication would be an important part of the road ahead.