Employers warn of unrest if unions form with 20 workers

Private sector employers have voiced concern over proposed changes to labour law that would allow a trade union to be formed if 20 workers agree, instead of the current requirement of 20 percent of a factory's workforce.

Owners, under the banner of Bangladesh Employers Federation (BEF) that represents a large chunk of the private sector employers, said yesterday that lowering the threshold could deter investment, spark disputes, reduce productivity and encourage multiple paper-based unions in a single factory.

According to the federation, the minimum requirement for forming a union should be linked to the size of the workforce.

At an event at the Metropolitan Chamber of Commerce and Industry (MCCI) in Gulshan area of Dhaka, BEF President Fazlee Shamim Ehsan said allowing unions with just 20 workers could lead to "opportunistic activities", damaging industrial relations.

On August 26, the draft amendments were discussed at the 89th meeting of the Tripartite Consultative Council, which includes representatives from government, industry and labour.

Ehsan said employers had adopted a constructive stance at that meeting but some proposals remained deeply worrying.

He pointed out that export-oriented industries, especially the readymade garment sector, are already under intense scrutiny from international buyers.

"If the new amendments create instability, it may disrupt production and timely order delivery. Our competitiveness in the global market would then weaken further," said Ehsan, who is also the managing director of Fatullah Apparels Ltd.

He said that in light of the new reciprocal tariffs and revised duty structures by the US, any added instability could drive buyers to shift orders elsewhere, placing the country's exports at greater risk.

The BEF president added that over-simplifying union registration could undermine foreign direct investment (FDI).

"Investors always seek a stable, predictable, and risk-free environment. If they believe industries may repeatedly fall into labour disputes, they will choose alternative destinations," he said.

"Labour law reform is a continuous process," said Ehsan. "It must align with international standards but also reflect the socio-economic realities of Bangladesh."

MCCI President Kamran T Rahman echoed a similar view. "We can certainly accept ILO [International Labour Organization] standards in both letter and spirit, but that does not mean copying everything word for word," he said.

"What is good for Belgium may not apply to Bangladesh at this point. We aim to reach the level of Germany, but our socio-economic conditions are not yet comparable," added Rahman.

Bangladesh has a workforce of about 6.5 crore. Around 1.2 crore are in formal jobs, while most remain in the informal sector.

"Current labour laws mainly regulate the formal sector and do not directly cover informal workers; other laws offer only partial or indirect protection," he said.

The MCCI president said, "So, overly rigid labour laws could discourage both local and foreign investors, at a time when our economy must create jobs for 20 to 22 lakh new entrants each year amid inadequate employment opportunities. If that happens, our domestic labour market will fail to expand further. This is an issue we must keep in mind."

Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said, "If a foreign investor hears that trade unions can be formed with just 20 workers in Bangladesh, they may hesitate to invest or even mention our country."

He noted that in Vietnam, there is only one trade union per industry, tightly controlled at the highest level, yet workers retain rights. "We should not push our country toward a fragmented system like Cambodia."

Hatem said his association formally registered its objections in a note of dissent when the government signalled it might act unilaterally.

"Even responsible worker leaders do not support unions forming with just 20 members," he claimed.