Sweater Factory Wages (Translated New Law) and a Brief Analysis

(Translation of The Government Gazette on Sweater Factory Minimum Wage [1])

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Government of the People’s Republic of Bangladesh

Ministry of Labor and Employment

Subsection-6

No. 40.0000.016.32.021.13 (part-2)/160

Notice

Date: 1 December 2014

 

Subject: Guidelines for Garment Sweater Factory Worker Wages According to the “Piece Rate” System.

In view of the demands of the workers and factory owners, followed by the unanimous agreement of workers, owners, factory management and other relevant stakeholders of sweater factories, the below mentioned method of piece rate wage payment are to followed:

1. The floor-in-charge of a factory will collect the initial opinion of the workers; these mid level management officials will then come into consultation with the upper/high level factory management to establish a “piece rate” wage.
2. Pay slips must accompany the wages when delivered based on piece rate. The pay slip will have a breakdown calculation of the wage based on piece rate.
3. If any objection is brought forward by anyone over the wage based on piece rate for a particular style then that matter will be brought forward to the administration which it will be reviewed and resolved accordingly.
4. The owner will fulfill any deficit in wages of workers for less work, as per their grade according to the minimum wage 2013.
5. During lean seasons/off peak seasons, if the worker attends all his/her working days full time, but still earns less than the minimum wage 2013 in his/her piece rate calculation, then the factory owner must pay the workers whichever wage is higher between piece rate and minimum wage 2013’s relevant grade’s wage.
6. If the factory has no work during some seasons, then the factory owner must pay the basic of the worker’s relevant grade according to the minimum wage 2013.
7. Whether the piece rate wage guideline is being implemented or not will be monitored by the Department of Inspection for Factories and Establishments.

Undersigned,

Mikail Shipar, Secretary, Secretariate of the People’s Republic of Bangladesh.

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Analysis of The New Piece Rate Structure as Proposed by the Government for the BGMEA

Sweater made in Bangladesh

Sweater made in Bangladesh

Bangladesh Secretariate

Bangladesh Secretariate

A 12 member committee formed The Labour Ministry, has finalised the much awaited and demanded sweater factory wage reforms on 1 December 2014. The policy came forward after identifying problems in setting up a wage structure of this complex segment of the garment sector of Bangladesh. The aim of this policy would be to resolve prevailing disputes over payment, workers-grades and other benefit-related issues.

While workers of the Sweater Factories will follow the usual Bangladesh Labour Law, and will refer to the Minimum Wage 2013, they will additionally be supported by this new set of directives to determine their wages in accordance with the tradition of piece rate for sweater factories.

A major concern of workers previously have been the re-fixation of the piece rate in accordance to the increase of minimum wage. Moreover, they demanded pay during off peak seasons when there is little or no work for these workers.

As per the new directives, the workers will convey their measure of the style and the appropriate piece rate for it to the mid level managers (line in charge or supervisors), who then will discuss the proposals with the higher level managers to finalize a suitable piece rate. Previously, only the owner has full authority in deciding the piece rates. Moreover, the piece rate should be decided upon once a sample work is completed for a style.

Although Sweater Factory workers earn less fixed income than t-shirt, shirt, trousers or other garment factory workers as the greater production these Sweater Factory workers can come up with, the more units means more money (multiplied due to piece rate). However, these factories are highly dependent on seasons, and two to three months every year they suffer from lean periods where there is little or no work, leaving workers jobless and in disarray. This matter has been checked in the new gazette, where it has been written that in terms of less work workers will have their wages adjusted by the owner according to at least the minimum wage 2013’s equivalent grade (usually grade 6), and be paid according to whichever is higher between minimum wage 2013 and piece rate wage. However, if there is no production at all, the owner shall still be bound to give his/her workers at least the basic wage according to the worker’s grade; thus eliminating the tradition of “no work no pay” which resulted in workers not getting any pay during off peak seasons.

With further reforms towards ensuring workplace accountability, the government has included monitoring of the implementation of its laws.

However, the gazette still does not provide any specific custom solution for sweater factories in the matter of its overtime payment, which was a crucial demand of workers in sweater factories in Bangladesh which employes nearly a million workers.

RISE Society

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[1] Is an unofficial translation into English from the Official Bangla Gazette (given in the DOWNLOADS box)

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Posted in Garment Worker Issues
2 comments on “Sweater Factory Wages (Translated New Law) and a Brief Analysis
  1. Shamsheer Ali says:

    Hope these rules will be followed. And the advisers of the oqners do not show them a way out.

  2. […] On the backdrop of such calamities, Bangladesh came up with an amendment of the Bangladesh Labour Act 2006 (amendment 2013), and a fresh new (and controversial) minimum wage 2013 as well as an EPZ minimum wage 2013. Heavily criticized and contested, these new minimum wages came about after a lot of struggle and bloodshed, with workers asking for an 8000BDT minimum wage which would be according to their minimum subsistence demands in the current prices of commodities in the country. Although following the declaration of minimum wages, a poor display of implementation has been observed since then specially across factories outside the export processing zones, there still has been yet another attempt to advance the cause of workers in the form of the much awaited wage guideline 2014 of the Sweater factories of Bangladesh. […]

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