Fix it quick or lose business | The Daily Star
12:54 AM, September 27, 2013 / LAST MODIFIED: 12:02 PM, September 27, 2013

Fix it quick or lose business

Say top apparel exporters

Police retreat during a clash with garment workers demanding an increase in minimum monthly salaries. The photo was taken yesterday in Shibu Market area of Fatullah, Narayanganj. Photo: Palash Khan Police retreat during a clash with garment workers demanding an increase in minimum monthly salaries. The photo was taken yesterday in Shibu Market area of Fatullah, Narayanganj. Photo: Palash Khan

When it comes to paying employees, the best policy is to settle the matter as quickly as possible, because it reduces a businessman's liability down the line, say country's top exporters.
The Daily Star has talked to four top apparel exporters on the recent tension between labour leaders and factory owners over the minimum wage.
The exporters want an amicable solution to the crisis, or else they fear western buyers might turn away from Bangladesh as they did in the case of Sri Lanka in the 1980s. At that time, western buyers switched to Bangladesh from the island nation as an alternative sourcing country for apparel products.
The exporters said a wage hike by Tk 600 would be too little for workers, while the demand for a minimum wage of Tk 8,000 is unrealistic. They said the issue has to be settled in a way that creates a win-win situation for both workers and owners.
The issue has come to the fore as garment workers continue to stage demonstrations in and around the capital. They have vandalised vehicles and factories in Dhaka and its outskirts, and blocked busy highways over the last six days, causing widespread disruption to vehicular movement.
Many factories in Gazipur, Dhaka and Savar have been shut for fear of violence.
“The crisis [centring the minimum wage] should be resolved immediately, as it will hamper the production further,” said MA Jabbar, managing director of DBL Group, one of the country's fast-growing apparel exporters.
DBL has directly exported garment products worth $170 million in 2012.
“Buyers are already looking for an alternative to Bangladesh like they did in the case of Sri Lanka in the 1980s. A delay in resolving the issue of the minimum wage would aggravate the crisis further,” said Jabbar.
He, however, said the policymakers must understand that all factories don't have the same capacity and high volume of exports.
“What I can offer to my employees, may not be possible for others to afford,” said the DBL boss.
David Hasnat, managing director of Viyella Tex Group, proposed that apparel factories should be categorised based on export volumes for setting the minimum wage for their workers.
“Grading of factories must be done immediately,” said Hasnat, whose company directly exported garment items worth $130 million in 2012.
Explaining his idea, Hasnat said factories with an export volume of $50 million or more a year could be put in A-category, those between $20 and $50 million in B-category, and the rest below $20 million in C-category. And the workers' wages should be determined accordingly, he said.
A worker of an A-category factory could be given a minimum wage of Tk 6,000 and one of B-category Tk 5,000 and one of C-category Tk 4,000, Hasnat suggested.
Sharif Zahir, managing director of Ananta Group, said there shouldn't be any delay in fixing the minimum wage. “It has to be decided as early as possible.”
Zahir said his company exported garment items worth $120 million in 2012.
In case of setting the minimum wage, the government could set targets for owners to achieve in phases after holding discussions with both workers and factory owners.
“The garment owners must know what would be the minimum wage after five years,” he said.
The workers must be protected from exploitations, but the ground reality and competitiveness must be taken into consideration before fixing the wage, said Zahir.
M Nasiruddin, managing director of Pacific Jeans, a Chittagong-based jeans maker, said this year proves to be very challenging for garment factory owners in Bangladesh.
Apart from the workers' demand for a wage hike, the owners are under pressure from buyers to ensure compliance in their factories, which need investment, he said.
The issue of fixing the minimum wage should be handled from a rational point of view, said Nasiruddin.
“All factories don't have the same capacity, and many of them cannot afford the same wage,” he said.
Bangladesh's garment industry exported apparel items worth more than $20 billion in fiscal 2012-13. The sector employs about four million workers, and 80 percent of them are women, mostly from rural areas.
In 2010, the minimum wage for a garment worker was fixed at Tk 3,000 a month from Tk 1,662.50 set in 2006.
In June, the labour and employment ministry set up a committee with factory owners, workers and government representatives to review wages in the garment sector. The committee is supposed to submit a report by December this year.

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