Impact of trade union

on management in
Bangladesh
Introduction
From the starting of industrial economy trade union is the most
common figure in a country. Trade unions are the controller of the labor
force of an industry which works for the betterment of the country’s trade by
ensuring the right of the labor force. The economic importance of trade
unions in developing countries is not commensurate with the size of their
membership. The behavior of Bangladeshi trade unions is characterized by
political activism, and momentous strikes, called hartals there, have played
a crucial part in most political changes in this country. In Bangladesh, the
share of the active population concerned by unionization was officially
estimated between 3 and 4 % in 1992. However, this figure is largely
irrelevant for an evaluation of their power, as the urban population was only
about 18 % of the total Bangladeshi population in 1995, and virtually no
trade unions exist in the rural sector. Within the urbanite working population,
and especially in the formal sector, the picture is quite different. Almost 100
% of the workers and employees of the public sector are unionized, while one
out of six of the wage earners in the private formal sector are unionized. The
aim of this discussion is to provide a simple theoretical framework for
analyzing this dimension of trade union activity, and to test its main
implication in the case of Bangladesh.

Definition
Different scholars have defined a trade union in different ways. Sydney
and Beatrice Webb have defined a trade union as “a continuous association
of wage earners for the purpose of maintaining or improving the conditions
of their working lives”. A trade union is also called as a labor union. A labor
union is an organization of workers who have banned or unified together to
achieve common goals such as better working conditions. The trade union,
through its voluntary; bargains with the employer on behalf of the union
members and collective bargain with the employers. This may include the
negotiation of working conditions like wages, rules, time, job security etc. the
agreements are strictly negotiated by the union leader on behalf of the
whole trade union with the employers. In some cases non member workers
also bargain with the employer.
Causes of organizing trade unions
In earlier times when industry was on a small scale and the few
apprentice and craftsmen whom the master craftsmen employed usually
lived with him, conditions of employment and any grievances were easily
discussed individually or in small groups and quickly settled. Modern industry
is very difficult. It is organized on a large a scale, and the maintenance of the
close direct relation between employee and employer for the settling of
differences is difficult. The status and security which workers had in earlier
communities have gone and in their place they need the protection of trade
unions. Considerably, to answer the question why trade unions are
organized; we have to say that, it is created to bargain and ensure the
status, rights, wages and demands of workers of the modern world of
industry. Thus modern industrial policies are complex due to the expansion
on business; it is very much needed to have a group of people or volunteers
who actively work for the labor negotiations. So it is clear that trade unions
are growing rapidly in an economy because of the expansion of business and
economical growth.

Objectives
Today’s world is globalized. So businesses are also globalized. For this
globalization businesses are expanding rapidly for that reason the workforce
in the industries is increasing hugely. To maintain the whole work force alone
by the management is a very tough job. Trade unions are the only way to
manage, compliant, and control the labor force. Lots of objectives are there
to organize trade unions. From the workers point of view three important
objectives of trade union today are as follows:

1. To defend or improve the wages and working conditions of workers and

to bring about a change in the economic order.

2. To strengthen their (labor) bargaining power collectively to establish

and achieve all their rights.

3. To dully protect all other interest of the workers.

And from the management’s point of view the objectives as written:

1. To reduce the number of negotiation

 2. To specify work rules, disagreements and grievances to give the better
solution to workers claim.

3. To establish the efficient communication between the employers and

management to enforce the predictable standards.

4. To enhance the overall organizational effectiveness workers can also

be sometimes inspired to form and organize trade union.

In fact, objectives of a trade union are not defined; rather these are changing
according to the need of the economy and overall industry. When these
objectives are not settled then the rivals are started.

History
The history of trade union movement in Bangladesh date back to early
19 century when modern industrial concept entered into the sub-Indian
th

continent. Like many other movement, the trade union movement also was
similar in India Bangladesh. The number of trade unions which was 411,
increased into 1174 in 1971 after the bloody liberation war and the
independence of Bangladesh. Bangladesh Trade Union Kendra (BTUC) which
was backed by the socialist party, it was nationalized after the war of
liberation. Awami league got the governing power and changed the
constitutions of trade union. From that very day political influence was
imposed on the trade unions of Bangladesh. Democratic functions which
were backed in the 60’s were changing by the aggression of ruling party
men. Unions were forcibly captured. Political, administrative and managerial
influences make it difficult to work independently for trade unions. From
1975-1983, 217 factories were privatized. For that reason there was no
influence of trade union on those. But after all systems, outsiders influence
has made alive the trade unions. The jute and cotton sectors, which were
nationalized in 1971, in the wake of the struggle for independence, and then
privatized to some extent in the 1980s, are the most unionized sectors.
Unions are also important in the transport sector and in various services. As
emphasized by Pencavel (1995), among others, unions in developing
countries get their power from their privileged relationship with political
parties and in many cases with the government. The Bangladeshi trade
unions are no exception, and are well known for their lobbying the
government rather than acting vis-à-vis the private sector. The influence of
unions goes beyond the standard reach of industrial relations, and extends
to the political arena. All the political parties, even the smallest ones, exert
some control over a trade union. The three main political parties have their
own trade union federation, which accounts for 64 % of the unionized
workers. The unions have played an active role in most major political events
of this country, like the massive demonstrations (hartals) that brought
General Ershad down in 1990, or those which pushed the democratically
elected government of Begum Khaleda Zia to resign in 1996. According to
the World Bank (2001), an average of 21 full working days was lost annually
due to hartals in the 1980s, and an average of 47 full working days per year
in the 1990s. This report estimates that about 5 % of GDP is lost on average
in the 1990s. Since independence of Bangladesh, no major development took
place in the history of labor legislation till the enactment of the Bangladesh
Labor Act, 2006. The Bangladesh Labor Act, 2006 is a major and
comprehensive enactment regarding industrial relation system-- partly as a
response to demand of stakeholders for improving regulatory framework on
trade union and partly by demand for codification of existing labor laws in
order to avoid overlapping and inconsistencies. It brought some significant
changes in industrial relation system. However, the Act has not been able to
bring the desired changed due to its in-built weaknesses, suspension of
many labor rights under state of emergency and lack of institutional capacity
to implement the laws. Still in today’s era the trade union of Bangladesh is
captured by the power parties of different interested arena.

Limitations
Bangladesh is still known as a third world country. Though it is a poor
developing country, in this country Trade Unions have a lot of unavoidable
problems. Some of those are discussed below:

1. Lack of consciousness: The major numbers of members of trade

union are not actually completely aware about their legal rights and
duties. That is the reason they don’t know the favorable characteristics
of trade unions. That is why in Bangladesh trade unions are not strong
enough to complete the need of the economy.

2. Lack of Unity: trade union is actually a unity of the labor force for
assuring their need. But in Bangladesh trade unions are separated for
political influence. It is a shock that only for difference in political view,
every industry has at least three major parts of a single union.

3. Lack of knowledge: In our country the level of workers is not

properly educated. They don’t have enough knowledge about their
 rights and duties. In this case trade union could be helpful very much
to develop workers KSA, but the whole level of workers is lack in
knowledge. That is why they don’t feel the need or contribution of
trade unions; again trade unions are banged here.

4. Political influence: The most powerful and deep affecting barrier for
the growth of trade union of Bangladesh is its political environment.
Most of the trade unions of Bangladesh are not free from the political
influence. Political leaders use the trade unions for illegal purposes. For
this the actual environment of trade union is not seen in Bangladesh.
In Bangladesh, trade unions work a part of political parties not as a
free right saving association.

5. Division of trade union: Bangladesh is a country where every

organization has more trade unions in name only. Those unions are
driven by the political leaders of various political parties. So a huge
verity of problem arises in the organizations. The overall productivity
got down. Moreover trade union cannot play its role perfectly. That is
why disputes are created and more division are created under different
political wings.

Impact of trade union on management

Every association has impacts in management. Trade union has both
positive and negative impacts on management.

Positive impacts:

• Trade union plays a major role in creating ideal working conditions. It

creates pressure on management to do a favorable roster for workers.

• Trade union always helps management to create better policies for

workers and to plan effective production targets.

• Labors are treated fairly, only then they will maintain the working
standard. Trade unions negotiate for the standard wage and benefits
with the management.
 • Trade union helps the management to make working environment
more active which increases the productivity as well as the profit.

• Political influence’s existence makes the trade union not to interfere in

management decisions.

• Trade union is hugely helping the management to cope with the

competition by motivating workers to produce more and implementing
management tactics.

Negative impacts:

• Trade unions creating more positions by the permission of

management and appointing more than need of workers. It’s creating
a surplus of manpower but not of productivity.

• Trade union of Bangladesh bargains more than they understand

because of the limitations of their knowledge. So it becomes difficult to
make any decision by consulting with the TU. If don’t consult then they
strike. It is the backend support of politics what is creating them more
powerful.

• Trade union is legal and it has the right to discuss with the
management. That is why TU think about its power. When they think
they have equal power of management then clashes are started.

• In companies labors are awarded for good work and threatened for bad
work. But if its punished then trade union interfere and don’t let to
happen the punishment. So it increases crime of the labors.

• Trade union leaders always try to save their interest first then the
labor. And it is always communicated that management body did the
wrong. So this unethical performance creates conflict between TU and
managerial body.

• For the power of politics trade union always dishonor the management.
They don’t listen to them; don’t obey orders even set their
compensations by their own. All is because of the sick environment of
politics of Bangladesh.
Present Scenario
Compared to the total labor force in the country, the number of trade
union members is very small. From 1,160 trade unions with a membership of
450,606 in 1971 trade unions had risen to 6,835 with a membership of
1,904,567 in 2004. The average membership of trade unions has declined
significantly. Trade union density is 1.12 per cent of the total labor force. The
presence of trade unions in the private export-oriented sectors such as RMG,
EPZs, shrimp exporting firms, finished leather and leather goods is very
weak. For instance, although there are more than 40 unions representing
garments workers, the level of unionization among workers is very poor.
Most trade unions in the RMG sector operate outside the factories and
therefore lack active participation of the general workers. A combination of
factors such as lack of enforcement of labor laws, inhibiting legal provisions,
and system of contract labor are responsible for reduced trade union
membership in these sectors. The workers belonging to government sectors,
educational institutions, health sector, private security services, confidential
staffs, workers in security printing press, ordinance factory, are still deprived
from the right to organize and do not have the freedom of collective
bargaining. Trade unionism in sectors such as nursing or rural electrification
is banned. Government and private owners also discourage trade unions in
cement factories, re-rolling mills etc. Furthermore, trade union leaders and
members are frequently intimidated and harassed by employers and security
forces.

Total number of Number of unions Number of

unions/federation included members
s
Categories
National 32 1,264 1,263,665
federation
Industrial 108 721 640,221
federation
Garments 15 80 50,149
federation
Basic union 5,242 - 2,069,614
Table 1 Total number of registered trade unions in Bangladesh up to
June, 2007
According to existing data, the number of organized trade union members
not affiliated to national federations is 715,114 and number of trade unions
not affiliated with National Federations is 3,968.

Suggestions
In the context of the world industry, Bangladesh is very younger. So it
should follow some measurements in order to increase its stability of
economy. In the light of Japanese and western trade union concept, some
suggestion or steps can be defined to improve and establish the real trade
union culture in Bangladesh. These steps must be taken in both public and
private sectors. These are as follows:

• Strengthening bilateral collective bargaining for solving problems

quickly and effectively.

• Multiplicity of trade union creates the rivals in a union. So it must be

reduced.

• Political involvement must be reduced. A trade union without the

control of politics only can be the way of all solution of the problems of
management and worker.

• Organization must support financially as trade unions support the

worker, it will change the motives of worker and will be more
productive for company.

• Workers are less knowledgeable, so training programs under trade

union should be helpful to develop the skills of the workers.

• Trade union’s function should be increased and widened throughout

the organization. It will help workers to work voluntarily for
organizational growth.

• Union leader must be given importance and encourage him many ways
to play positive role in the union as his power implications.

• Trust is a big asset of an organization. If trust between workers and

management increases, productivity increases. This is the job of an
effective trade union.
 • Management must help and guide trade unions to settle industrial
clashes and crisis. It is trade union who has control over the workers. It
helps totally to stop strikes and rivals of workers.

• The demand of trade union matters a lot to the economy. If demands

are reasonable and real then it should be worked out. But if it is not,
then a strike breaks out. So trade unions always should demand
reasonable thing to the management.

Conclusion
The industrial relation system is pre-dominantly confrontational in
nature rather than cooperative in Bangladesh. It is characterized by the pre-
dominant position of informal economy, fragmented unions, weak labor
institutions, lack of enforcement of labor laws and conflict ridden employer-
employee relations. Although in recent times the rate of unionization has
increased in the RMG sector, trade union affiliation is low in Bangladesh
compared to many other developing countries. The main reasons for this are
the fall in employment in previously highly organized sectors, rise of the
service sector and increasing flexible types of employment relationships.
Data available indicates fragmentation and contradiction in membership of
employers and workers organizations. Moreover, data on membership does
not reflect the role these organizations play in political and socio-economic
processes and institutions. The promotion of independent trade unions and
collective bargaining can contribute to political and social stability and
consequently create more favorable climate for foreign investment. Several
studies of the World Bank and ILO support the view that freedom of
association and collective bargaining contribute to improving economic and
trade performance and have found no negative correlation. Rather, highly
coordinated bargaining accompanied by higher rates of unionization can
contribute to positive economic trends. Trade unions have an important role
to play in settling disputes between workers and management over wages
by way of collective bargaining. However, empirical data show that the
experience is far from satisfactory.

France for example. One can remember the role of Solidarnosc in

Poland for bringing communism down. In Britain, the conflict between
Margaret Thatcher and the miners’ union in the late 1970s was a major
political event, rather than a simple industrial dispute. All the developing
countries trade unions were influenced politically, but they used politics to
create a better solution. In Bangladesh politics in trade union is being used
as a weapon of destruction. Bangladesh should also start practicing like
Japanese trade union which has a single union for sigle enterprise. There is
no co0nflict, no unfair means and no strikes in productivity and the growth of
the overall economy.