New wages for RMG workers come into effect from Nov 1; FBCCI president asks owners to quit business if they fail to implement it

By AKM Moinuddin

Dhaka, Jul 29 (UNB) – The minimum wage for entry-level workers in the country’s lucrative yet besieged readymade garment (RMG) sector has been raised to Tk 3000 per month, almost double the existing Tk 1662.5.
Although news of the increase had been leaked as early as Tuesday, the government formally revealed the much-anticipated new wage structure for the sector, fixing Tk 9300 as the maximum and Tk 3000 as the minimum a worker can earn in a month. The government announced the new pay structure will be effective from November 1, 2010.
The government-formulated pay structure stipulates Tk 2500 as an acceptable wage during any probation period a worker may have to serve, an increase of more than 108% over the previous probation period wage of Tk 1200, set in 2006.
Interestingly, although government expressed its optimism that the new pay scale would be implemented within three months, the owners of the over 4500 factories in which the workers are employed were hesitant about committing to the new pay scale within the given timeframe.
Labour and Employment Minister Khandaker Mosharraf Hossain unveiled the recommended wage structure at a crowded press conference in his ministry’s conference room, where representatives of all the parties involved in the wage board were present.
Before the formal announcement, the minister held a marathon meeting with the leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), the two most powerful trade bodies in the industry, with the aim of reaching an amicable conclusion.
In their initial reactions, BGMEA President Abdus Salam Murshedy and BKMEA President AKM Selim Osman both said they would ‘try’ to implement the recommended wage structure.
However, FBCCI president AK Azad came out more forcefully in favour of the rise, saying: “It will have to be implemented. Those who don’t want to implement it should give up this business and look for a new one.”
Azad noted that the decision had been reached through consensus, and so there should be no impediment to its implementation.
BGMEA president Murshedy said they would soon meet with the Prime Minister, as they have a number of demands including uninterrupted supply of gas and electricity for their factories to operate at fuller capacity, and improved banking facilities.
Murshedy admitted the new wage rate is ‘reasonable’ in the context of the global scenario, he evaded a question on its implementation, merely saying they would ‘try their best’.
At one point, he even suggested all owners might not be able to follow the new wage structure, but that they would be ‘encouraged to do so’.
Permanent member of the Wage Board Habibur Rahman Siraj reiterated that the decision was underpinned by consensus. “There is no relation between the implementation of the decision and demands of owners.”
Workers leader Shirin Akhter said they would give their formal reaction in 2 weeks, when the final draft would be sent for a gazette notification to be brought out, after further evaluation and modification.
According to the recommended wage structure, a Grade 1 worker will be entitled to Tk 9300 (against the existing Tk 5140), while a Grade 2 worker will get Tk 7200 (currently Tk 3840); Grade 3 workers will get Tk 4120 (currently Tk 2449); Grade 4 workers Tk 3763 (currently Tk 2250.10); for Grade 5 workers, Tk 3455 (currently Tk 2046); for Grade 6 workers Tk 3210 (currently Tk 1851) and the lowest Grade 7 workers will get Tk 3000 (against the current Tk 1662.50).
Announcing the new wage structure, Minister Mosharraf said the workers would be availing the benefit from November 1.
Replying to a question he said: “The next 14 days from tomorrow is a notice period. All parties will have the right to give their opinions on the draft and then it will be sent to BG Press for gazette notification.”
He said the government is reviewing wage levels in 36 labor-intensive sectors. “If we fix Tk 5000 as the minimum wage in the RMG sector, the process of reviewing other sectors might get hampered.” He urged the workers to accept the new wage structure.
The Wage Board formed to formulate a new wage structure for the sector earlier finalized the draft and placed it before the government on Tuesday.
All the representatives of different stakeholders on the Wage Board, except the owners’ representatives, signed the draft. Apparently, the owners placed a few conditions from their side and reportedly pressured the Labour minister to give them more time.
Finally however, the owners did sign the draft, after being provided with three months to implement the new pay structure.
On the other hand, the Bangladesh Garments Textile Workers Federation and the Samajtantrik Sramik Front have denounced the newly-set minimum wage of Tk 3000, terming it ‘unjust’.
The government on January 13 this year formed the Wage Board headed by District and Sessions Judge Iktedar Ahmed, to recommend an acceptable minimum wage for the garment sector, in the aftermath of brooding unrest in RMG units across the country. The board held 13 meetings before finalizing the draft wage structure.
Bangladesh’s apparel industry earns $12.5 billion, almost 80 per cent of the country’s entire export earnings annually, and the industry employs 3.5 million workers, mostly women.
END/UNB/AKM