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Burma’s industrial relations at a crossroads

Industrial relations for the garment sector is at a crossroads, with representatives from unions and factories agreeing that both sides need more education and willingness to negotiate in order to fuel Burma’s burgeoning industry.

After years of US sanctions, the entrance of American clothing giant Gap in June this year marked a new beginning for the industry. Burma’s exports topped US$1 billion last year; the Myanmar Garment Manufacturers Association (MGMA) predicts that exports will rise to $1.5 billion by the end of 2014.

This rapid opening of the industry comes at a time when union leaders and workers are becoming more empowered to demand higher wages and better working conditions. With factory owners accustomed to the old ways of dealing with worker dissent – and workers uneducated about how to engage in negotiations – both sides are pushing for a healthier industrial relations environment, as clashes could handicap the sector.

“The main issue is understanding the need for negotiation – on both sides,” said Maung Maung, secretary-general of the Federation of Trade Unions in Myanmar, one of Burma’s biggest union blocs.

“The workplace issues — overtime, salary – these can all be solved. The principle is the need for negotiation, and industrial issues affect everyone so I think that mindset is the most important,” he said.

Negotiations between an employer and employee may not seem like a particularly novel idea, but for developing countries with a robust garment sector, this is not always the case. Burma’s neighbour, Cambodia, exports roughly $5 billion in value of garments each year, yet is plagued by frequent strikes and weeks-long lockouts due to both unions and employers refusing to sit down at the negotiating table; Bangladesh – the biggest exporter in garments after China because of its cheap labour costs – has near-daily protests that block roads and leave factories damaged. Hostile relationships between the owners and workers are cemented, making it difficult for either side to come to a compromise.

A constructive industrial relationship is so crucial – and often so elusive – that the Office of the US Trade Representative announced on Thursday that they will be working with the Burmese government on an initiative to promote labor rights and implement legal reforms to foster a positive industrial environment. This move comes as Burma – with roughly 185 exporting garment factories currently operating in the country – is poised to attract even more investors and international brands looking to expand to a low-wage country with, hopefully, less industrial turmoil.

So far, the factories hire about 200,000 workers, and less than one percent of them are part of a union. Once considered illegal by the previous military regime, the nominally civilian government of Burmese President Thein Sein enacted a law in 2011 allowing for workers to form unions, as long as they have at least 30 members. There are now more than 1,200 unions, with the majority of them in the agricultural sector.

[pullquote]“We do have a very big gap in knowledge on negotiations and industrial relations — both from the workers’ side and the owners’ side.”[/pullquote]

Because of this nascent movement, Maung Maung said that most union leaders or members are unskilled in negotiations and collective bargaining.

“The majority of the workers still don’t understand the responsibilities of the unions, the responsibility of the members and the executives,” he said. “We do have a very big gap in knowledge on negotiations and industrial relations — both from the workers’ side and the owners’ side.”

Maung Maung added that wildcat strikes and demonstrations often come from workers who are not part of unions, as they do not have the awareness to resolve issues in a productive manner.

The issues for a dispute are varied – requests for higher wages, better working conditions and hours, and general management disagreements. Burma has some of the lowest wages in the region, with the basic minimum wage ranging from $25 to $37 a month, according to report last year by Burma-based Labour Rights Clinic.

Christopher Land-Kazlauskas, the International Labour Organization’s chief technical adviser for the Freedom of Association and Social Dialogue Project, said that another emerging problem appears to be that factory owners are dismissing labour representatives within their factories for their union activities – a move that is angering workers.

“I think that retaliation against union leaders in both the severity and frequency we are seeing is a huge obstacle [to industrial peace],” Land-Kazlauskas said. “If [the government] can’t make this illegal or put in place penalties that will keep employers from doing that, what is going to make an employer want to negotiate?”

“You can’t have a system of healthy constructive industrial relations where one party can sit down and say, ‘either you accept my terms or you’re all fired’,” Land-Kazlauskas said. “That’s not considered good faith collective bargaining.”

“If that spreads, then the government will have a much harder time keeping industrial peace. The economy is going to have a much harder time in developing. It’s going to scare away a lot of foreign investors.”


While Than Win, director general of the Department of Labor Relations, acknowledged that there are some cases of unfair dismissals of trade union officials in factories, he said that sometimes the unionists’ actions create disputes.

“I found that some trade union officials interrupted the mandate or authority of the managers or employers, so that leads to the said dispute and dismissals,” he said by email from Naypyidaw.

The Department of Labour Relations has recorded almost 70 protests in the garment sector during the first seven months of 2014. In 2012, there were 241 recorded protests, and 136 in 2013.

Despite these numbers, Than Win pointed out that another 2,300 cases were resolved from 2012 to July 2014 through negotiations via township conciliation boards – which is the next step both parties take if negotiations do not lead to a settlement.

Win Shein, director general of the Ministry of Labour’s Factories and General Labour Laws Inspection Department, said that his staff visit factories and hold workshops regularly to educate both owners and workers on negotiation tactics and the need for understanding.

“We truly believe that through awareness-raising workshops, management level will be familiar with current labour law and they will apply the knowledge at the workplace, which will lead to less labour disputes happening,” Win Shein said. “Without an employer, workers cannot survive. At the same time, without any workers, an employer cannot start any business … I strongly believe they should have mutual trust in each other.”

MGMA’s chairman Myint Soe believes that both workers and owners will be able to benefit from more investment from international brands and factories in the garment sector. Concerned with a PR image, brands tend to focus on making sure factories are compliant with the law and international human rights standards, he said.

“They have training [for the workers] for labour rights issues and safety issues, and they address issues of working hours and salary. These things concern the brands, so workers are happy to see and get knowledge and training from them,” Myint Soe said. “And employers will be happy as well because the orders are for a longer period and in bigger volume.”

But FTUM’s secretary-general Maung Maung cautions against this rosy view of international brands, adding that history hasn’t proven this to be accurate.

“I would say that we have to take companies on their own and what they do here in this country,” Maung Maung said. “Having big names is good for business, but on the human rights and workers rights issues, we would have to gaze at them individually — not as a brand, but based on their practices here.”





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