The recent labour law changes easing union formation requirements could destabilise the ready-made garment (RMG) sector, creating fresh uncertainty in the country’s largest export industry, exporters have warned.
According to the Bangladesh Labour Act (Amendment) Ordinance 2025, a trade union can now be formed in a factory with a minimum of 20 workers, whereas the current law requires participation from at least 20% of the total workforce.
The maximum number of unions allowed in a single factory has also been raised from three to five.
Exporters fear that allowing up to five unions with very small worker numbers will intensify instability in factories – a situation they say mirrors the experience of the Philippines.
They warn that, coupled with repeated factory fires and declining global orders, the move could deal a fresh blow to the sector.
“If the proposed law is implemented, the garment industry could become unstable,” said Shams Mahmud, managing director of Shasha Denims.
He noted that the Philippines was once among Asia’s top apparel exporters, but uncontrolled union activism dragged its exports down from around $1.5 billion to $600-$700 million.
The interim government approved the draft ordinance on 23 October, to be enforced following its promulgation in the gazette.
Exporters and industry leaders say 1,424 trade unions have so far been registered in the apparel sector, and 905 of them are linked to factories that have since shut down.
Exporters Association of Bangladesh and Bangladesh Knitwear Manufacturers and Exporters Association President Mohammad Hatem said this reality shows the sector is “still not ready for such wide-open union formation”.
He added that neither the International Labour Organisation (ILO) nor the European Union had demanded “unchecked freedom” in unionising.
Speaking to TIMES of Bangladesh, he alleged that certain groups, citing foreign organisations, were pushing an agenda that could undermine Bangladesh’s economic lifeline.
Referring to a case in Narayanganj’s RS Composite, Hatem said the labour ministry approved a union formed with fake workers, which was later cancelled when challenged by the owner – “an example of irresponsible oversight”.
“If five unions raise different demands at different times and stop work, how will a factory run, and who will protect the owners?” he asked.
Industry leaders pointed to Vietnam’s model, where even ten workers can form a union but decisions remain aligned with the state-controlled national federation, historically the Vietnam General Confederation of Labour (VGCL).
Although a new trade union law adopted in July allows limited independence in the Southeast Asian country, government control remains evident, they said.
They added that foreign investors in Vietnam prefer a “low-union-risk zone” and workers often fear being labelled “problem workers” if they join unions.
Manufacturers and observers say labour rights politics in Bangladesh has shown a toxic side for years.
Several senior leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) told TIMES that they are seriously concerned about the sector’s future stability.
BGMEA Press, Media and Public Relations Committee Chairman Masud Kabir said, “If five groups of workers align with five political camps and call different programmes, how can a factory run smoothly?”
He added that owners already deal with non-business pressures that their counterparts in peer countries do not.
While the industry has generated around four million jobs, critics argue that workers’ real wages and living standards remain low despite the sector’s success being driven by cheap labour.
President of Sammilito Garments Sramik Federation Nazma Akter said they demanded the minimum 20-worker requirement because genuine union formation has been too difficult under current rules, and the government accepted that.
Rejecting allegations of fake workers, she said violators must be held accountable, while claiming some owners collaborated with officials to dissolve unions unlawfully.
Exporters, however, allege that outsiders and temporary workers are being used to create artificial unrest inside factories, heightening owners’ anxiety.
Gazipur-based GreenTech Fashions entrepreneur Shovon Islam told TIMES, “Workers’ rights and lives must improve, but not at the cost of destabilising the sector.”
He said Bangladesh has already achieved more progress than competitor countries.
He cited the ILO ‘Better Work’ programme, where workers in over 500 factories were trained to directly report complaints to the ILO hotline.
“One complaint triggers buyer notification before any settlement, putting owners at risk – no other major apparel-exporting country operates under such a model.”
He alleged that even at GreenTech, which has been operating for just a year, a union was formed with individuals who never worked in the factory, yet received approval from the labour office. Complaints have been filed over such issues, he said.
Department of Labour Director (Trade Union) SM Enamul Haque said union registration does not require owner approval and is granted only after verification.
He said the law followed several meetings involving the ministry, owners and workers, and owners did not object at the decision-making stage.
“The law now awaits gazette publication and there is nothing left for the labour ministry to do,” he said.
Manufacturers claim workers with fake IDs formed many unions illegally in parts of Gazipur, Savar and Ashulia, triggering vandalism in several factories in recent days.
Over 300 factories shut in one year
According to BGMEA data, 304 garment factories were shut over the past year due to unrest and other causes, with more small and medium units at risk.
Shovon Islam said, “We want to do business in a calm environment. Artificial disruption will make operations impossible.” He urged state intelligence agencies to investigate and bring perpetrators to justice.
He added that the Pacific Jeans Group had to shut seven factories for a week due to unacceptable worker behaviour – a danger signal for the sector.
Pacific Jeans supplies Uniqlo, Zegna, H&M and Zara, and such disruptions can damage buyer confidence.
Managing Director of Pacific Jeans Syed Mohammad Tanvir told TIMES that on 14 October, some workers stopped production, created chaos, cut the power supply and forced others into an unlawful strike, making operations impossible. Factories resumed on Thursday once calm was restored.
Exporters say unrest is rising while the industry simultaneously faces increasing port charges in Chattogram, continuing factory fires, falling global orders, gas shortages, high interest rates and liquidity stress in the banking system.
RMG exports surged nearly 25% in July as US-bound shipments jumped ahead of Trump’s tariff implementation, but exports fell in the following two months, both month-on-month and year-on-year.
BGMEA Senior Vice President Inam-ul-Haque Khan said new orders in July-September dropped by 10%-15% compared with the same period last year.
