HRMP005 Presentation FINAL FINAL

The Employment System in Two Global Sectors

An Insight Into the Garment, and Hospitality Industries Across the Globe

Pia Fäth, Anastasios Mammas, Scott Baxter, and Sasha Saunders

Contents

Introduction to the Sectors General facts and figures, impact of competition, and globalisation

Nature of Work Employment conditions, wages, demographics

Content of Work Employment rights, regulations, trade union representation

Conclusions – Similarities/Differences Comparison of the two sectors

Reference List Q&A Session/Discussion

Introduction to the SectorsGeneral facts and figures, impact of competition, and globalisation

Introduction to the Sectors

China has the world’s largest garment industry – 2nd largest is Bangladesh Employs around 60 million people world-wide Industry worth an estimated $1,781,000,000,000

Men’s wear industry: $402,000,000,000 Women’s wear industry: $621,000,000,000 Children’s wear industry: $186,000,000,000 Supply chain often well-spread and international Change in main producers over last 40 years Production shift en masse to developing countries Multi Fibre Agreement (MFA) set up in 1974 to regulate the industry

Allowed developed countries to impose import quotas on developing countries Agreement phased out in 2005

Large role of the “informal economy”

Garment Industry

(ILO 2015; Fashion United 2015; Mather 2015; World Trade Organisation 2015)


Demand and consumer confidence in the western-world still low lower clothing expenditure Increased pressure on suppliers from international buyers Capacity often 2x higher than demand buyer’s market race to the bottom Productivity and competitiveness are two important factors 5x important stakeholders determine competitiveness:

Buyers Government Owners Middle managers/supervisors Workers

Link between increased productivity in 2008, and improved working conditions, more positive working environment, and CSR

Garment Industry

(Bhattachrya et al 2005; BGMEA 2007)

Introduction to the Sectors Factories in constant competition to attract international buyers

Focus on productivity increases to try and achieve this – should focus more on “general business environment”

Strong belief that the success of the S.E. Asian garment industry lies in lower costs, quality, and relationships with intl. buyers

Main influences are in fact: Intl. trade strategies (end of MFA) Intl. garment buyers Intl. NGOs Coalition building between key stakeholders

Areas for improvement: Worker benefits Developing partnerships between NGOs and private sector Establishing industry standards

“Race to the bottom” or “race to efficiency”? Outcome of globalisation and free trade Can occur when competition increases over a sector or geographic area

Garment Industry

(Newsome 2004; AsiaFoundation.org 2010; CleanClothes.org 2015)

(Davies and Vadlamannati 2013)


Major contribution to the European economy (3.7% of GDP) Cyprus (10.4%), Malta (7.8%), Greece (6.5%), Spain (6.3% ), Austria (5.5 % )

Europe is the largest tourism destination in the world 50% market share, 475 million international arrivals per year People are spending over 1.5 billion nights in hotels per year

9.5 million people are employed (4.4% of total employment) Fastest growing sectors in terms of employment Provider for ‘first jobs’ Largest employer of migrant labour in Europe

Generally an unskilled/semi-skilled workforce

Hospitality Industry

(Baker 2014; Ernst & Young, The Brewers of Europe and HOTREC 2013; Hotelmarketing.com 2016; HOTREC 2011)


Mainly SMEs 99% have less than 50 employees

Increasing competition from large hotel chains, airlines, and online travel agents Undercutting of prices New booking systems All-inclusive packages Increasing customer demands

Seasonal business

Political situation of the country influences tourism Terrorist attacks


(Baker 2014; Ernst & Young, The Brewers of Europe and HOTREC 2013; Hotelmarketing.com 2016; HOTREC 2011)

Constant improvement of quality to lower prices!

Nature of Work Demographically unbalanced workforce – 75% of employees are

female Protection of women’s rights important High incidence of sexual harassment, discrimination, and even rape Right to maternity leave not guaranteed fixed-term contracts not renewed

Child labour is commonplace, especially in India Inaccurate birth records compounded with economic hardship is a primary driver Work-study programmes often used to hide child labour practices

Working conditions depend on factors such as geography, age of the facility, societal norms, and political/economic context

Conditions generally poor, especially in the far-east One of the lowest paying industries in the world

(Fair Ware Foundation 2016; Equal Times 2014; Charoenloet 2015; Women Working Worldwide 2015)

Nature of Work Generally more women than men

Finland 70% vs 30%

Mainly employs young people (15-35 years) Problems with undeclared work

2000-2006: Estonia 25.5% of undeclared work Employer do it to save on taxes and social security contributions Problematic: workers don’t qualify for social benefits

Poor working conditions: Low wages Precarious work (seasonal work 22%, part-time employment 30%) Unfavourable working hours (weekend, night shifts, double shifts) Physically and mentally demanding No long-term career perspectives Little training and development

(EFFAT 2013; Gerogiannis et al 2012; European Foundation for the Improvement of Living and Working Conditions 2004; Vogt 2003)


Nature of Work Seasonal work

Workers have to recover during unemployment Unemployment rate goes up to 30% High crew change lot of time gets wasted for job training

Migrant workers are in disadvantaged situations Do not qualify for social benefits Working permit is restricted to one employer Immediately have to leave the country when the contract runs out

Regulations are there but: Often get violated by employer AND employee up to 70% Young people want to make as much cash as possible Generally are more concerned with hygiene and customer protection

High staff turnover Problematic: skill shortages

(EFFAT 2013; Gerogiannis et al 2012; European Foundation for the Improvement of Living and Working Conditions 2004; Vogt 2003)


Content of WorkEmployment rights, regulations, and trade union representation

Content of work

Employment rights and Regulations In 1949, Bangladesh ratified:

ILO Convention 87: Freedom of Association and Protection of the Right to Organize Convention, guarantees that workers and employers, without distinction whatsoever, shall have the right to establish and to join organisation of their own choosing without previous authorization.

ILO Convention 98: Right to Organize and Collective Bargaining Convention, protects all workers against acts of anti-union discrimination.

And, in 1972, approved that the constitution and national law provide for the right to join unions. However, the law of Bangladesh establishes excessive requirements and complicated procedures in order to register a trade union and, in practice, the registrar rejects many applications.

(Ahamed 2012; ITUC 2012)

Content of work

Industry attitude towards collective actions

Anti-unionism: No acceptance on the right to unionize at the factory level and owners fear trade unions. Instead, factories has established social welfare committees via them, employees can

only discuss about issues such as cleanness or productivity. According to a letter from the International Trade Union federation to the Bangladeshi

Prime Minister:Couple of days after Sadia Garments Ltd. Workers Union registration, management began

an aggressive anti-union campaign, forcing workers into management’s office to sign a statement declaring that they don’t want a union. Management also threatened

to call in local thugs if they did not comply. They used abusive language and threatened physical harm towards the union officers...would not allow a union and personally threatened to kill the BFWS lead organizer and pay off her family.

Management then forced each unionized worker to sign a blank page, no doubt to be used as evidence of resignation from the union.

(Ahamed 2012; ITUC 2013)

Garment Industry

Content of work

Industry attitude towards collective actionsAminul Islam case:

In 2010, the leader of BGWIF/BCWS* Aminul Islam was detained and beaten by Bangladesh’s National Intelligence Service in an attempt to get him to sign a statement against his colleagues at the BCWS.

In 2011, the three leaders of BGWIF/BCWS were facing ten criminal charges, being pressed by two of largest garment manufacturers in the country.

In 2012, Aminul Islam was kidnapped, tortured and murdered.

His murder was a message to trade unions and NGOs not to protest the low wages, grueling hours and poor working conditions that characterize the RMG industry. It is believed that members of the intelligence service are involved in his murder.

*Bangladesh Garment and Industrial Workers Federation/Bangladesh Center for Worker Solidarity

(ITUC 2013; Rahman and Langford 2014)

Content of work Representation:

Attempts for collective action: Awaj Foundation: AWAJ, which means “voice” in Bangla, is a

foundation that has over 37,000 members and 37 full-time staff. It has helped settle thousands of disputes regarding wages, overtime, holidays and maternity leave in hundreds of factories.

Less than 5% of the workers are members of unions that leads workers to numerous wildcat strikes or large-scale vandalism of garment factories. On 2011-12, 4,000 factories in Dhaka (capital of Bangladesh) have had a wildcat strike and 16 factories were burnt down.

(Ahamed 2012; Awaj 2016; Rahman and Langford 2014)

Content of work Representation:

International Assistance: Belgium based International Textile, Garment and Leather

Workers’ Federation (ITGLWF) Solidarity Center, a NPO which its stated mission is to help

build a global labor movement by strengthening the economic and political power of workers around the world

American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), by setting up of new affiliated unions and supporting campaigns

(Rahman and Langford 2014)

Content of work: EU membership provides Austrian workers with EU labour law rights Three Pillars of employee representation in Austria:

Works Councils Chambers of Labour Austrian Trade Union Federation

Works Council: Organisations with +5 employees must create a works council (or elect a staff

representative every 4 years) in accordance with the Labour Constitution Act At organisation-level work councils have formal participation, information,

intervention and supervision rights Negotiate collective agreements with their organisations which may exceed, but

not fall short of, standards set by collective bargaining More than 80% of work council members are also trade union members


(European Commission 2016; ETUI 2014; ÖGB 2016)

Content of work: Chambers of Labour:

Similar concept to Chambers of Commerce but for employees (mandatory membership) All nine Austrian provinces have their own blue and white-collar Chambers of Labour Functions include introducing and reviewing proposals for legislation, devising fundamental

economic and social policy strategies, offering member services, work with social partnership institutions

The ÖGB Austria’s only trade union confederation established in 1945 to address long-standing

political divisions between unions which pre-dated the fascist take-over In 2014 there were an estimated 1.4 million trade union members in Austria (40% of all

workers) Collective agreement coverage of 95%, having ‘non-member effect’ (providing relatively

high income security) Politically active, but not politically affiliated

(ETUI 2014; ÖGB 2016)


Content of work:

Created in 2006 through a merger of three unions (railway workers’ union, hotel and catering workers’ union and a transport workers union).

Represents 140,000 workers in Austria Renegotiated over 150 collective agreements for various professional

groups with the works council (up to sixty KVs year after year) Vida Tirol specifically covers workers in the tourist sector:

Current issues include increasing training opportunities for workers and ensuring fair working hours for hospitality workers

Collective action in the Austrian hospitality industry: VIDA

(Vida 2015)


Content of work:

Anti-wage and Social Dumping Act New legislation first introduced in

2011 requiring British companies to pay their employees the hotel industry minimum wage of 1,000 euros/month

Significant legal changes that enable authorities to take action against companies who underpay workers, regardless of the employee’s desire

Companies who do not comply could face fines of up to 20,000 euros per employee

(Hardy 2014; Rijks 2012; Eurofound 2014; Vida 2016)


Comparison of the Two SectorsGarment and Hospitality Sectors

Conclusions - Similarities

Changes to the global market Increased global competition Both sectors involved in a “race to the bottom” Poor working conditions Unskilled/semi-skilled workforce - little emphasis on training Little career perspectives Precarious work situations – widespread use of fixed-term contracts etc. Both sectors attract the same demographic – female unskilled younger

workers

Conclusions - DifferencesGarment Sector Union

Fragmented union representation Little union participation Anti-unionism commonplace Most connected to the government Numerous wildcat strikes and acts of

vandalism

Legislation and Regulation Unions provided for in legislation In-practice, still difficult to organise –

complexity

Hospitality Sector Union

Strong history of active unionism Significant union participation Unions able to impact non-union members Not politically-affiliated Very politically involved Collective action is effective and regularly

used Legislation and Regulation

Heavily regulated Multiple levels of employee participation

and representation EU membership of Austria adds an extra

level of protection for workers

References: Ahamed, F. (2012) Can Trade Unions play an effective role in defending workers' rights in the Bangladesh Ready-made Garment

industry? Middle East Journal of Business, 7(3), pp. 12-18. Awaj.info. (2016). AWAJ Foundation - Defending the rights of workers in Bangladesh. [Online] Available at: http://awaj.info [Accessed

30. March 2016]. Baker, D.M.A. (2014) The Effects of Terrorism on the Travel and Tourism Industry. International Journal of Religious Tourism and

Pilgrimage, 2 (1), pp. 57-67. Banerjee, S. (2010). Competitiveness in the Garment and Textiles Industry: Creating a supportive environment. 1st ed. [ebook]

Berkeley: University of California. Available at: https://asiafoundation.org/resources/pdfs/1OccasionalPaperNo.1BGGARMENTwithCover.pdf [Accessed 28 Mar. 2016].

Bhattacharya, Debapriya and Kimberly Elliot (2005). “Adjusting to the MFA Phase-Out: Policy Priorities.” Washington D.C.: Center for Global Development.

EFFAT (2013) Austria: The McDonald’s Agreement improving working conditions. Brussels: EFFAT. Available: http://www.precarious-work.eu/en/what-have-trade-unions-done [Accessed: 23. March 2016].

Ernst & Young, The Brewers of Europe and HOTREC (2013) The Hospitality Sector in Europe - An assessment of the economic contribution of the hospitality sector across 31 countries. Brussels: The Brewers of Europe. Available: https://www.google.de/url?sa=t&rct=j&q=&esrc=s&source=web&cd=6&ved=0ahUKEwi-ounrmdfLAhUJORQKHS9pAUUQFgg5MAU&url=http%3A%2F%2Fwww.ey.com%2FPublication%2FvwLUAssets%2FThe_Hospitality_Sector_in_Europe%2F%24FILE%2FEY_The_Hospitality_Sector_in_Europe.pdf&usg=AFQjCNEeIf6T0PvqugpWIBNyp9k6h11XkA&cad=rja [Accessed: 23. March 2016].

European Foundation for the Improvement of Living and Working Conditions (2004) EU hotel and restaurant sector: Work and employment conditions. Luxembourg: Office for Official Publications of the European Communities. Available: https://www.google.de/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&ved=0ahUKEwi-ounrmdfLAhUJORQKHS9pAUUQFggoMAI&url=http%3A%2F%2Fedz.bib.uni-mannheim.de%2Fdaten%2Fedz-ma%2Fesl%2F03%2Fef0398en.pdf&usg=AFQjCNHvKpmvQa_ky3YlrqGK2DzK35oPvQ&bvm=bv.117218890,d.ZWU&cad=rja [Accessed: 23. March 2016].

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References: Hotelmarketing.com (2016) Whers's pricing in the hospitality industry heading? Hotelmarketing.com.

Available: http://hotelmarketing.com/index.php/content/article/wheres_pricing_in_the_hospitality_industry_heading [Accessed: 01. April 2016].

HOTREC (2011) Facts and Figures. Brussels: HOTREC Hospitaliy Europe. Available: http://www.hotrec.eu/about-us/facts-figures.aspx [Accessed: 01. April 2016].

Decent Work and the Informal Economy' (International Labour Organisation, 2002) http://www.ilo.org/public/english/standards/relm/ilc/ilc90/pdf/rep-vi.pdf accessed 16 January 2015 p3

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ITUC (2013) Anti-Union Discrimination in RMG Sector. [Online] Available from: http://survey07.ituc-csi.org/IMG/pdf/bangladesh_protest_letter_27_june_2013.pdf. [Accessed: 30. March 2016].

ITUC (2013) Bangladesh – Murder of Aminul Islam. [Online] Available from: http://survey07.ituc-csi.org/bangladesh-murder-of-aminul-islam-13082. [Accessed: 30. March 2016].

‘Mango news and facts history’ (Fashion United, March 2007) fashionunited .co.uk/news/mango.htm [Accessed 28th Mar 2015)

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http://www.wto.org/english/tratop_e/devel_e/a4t_e/aid4trade_e.htm [accessed 25th Mar 2015]

Newsome, K. (2004). Theoretical Perspectives on Work and the Employment Relationship. Champaign: Industrial Relations Research Association, pp.133-141.

Rahman, Z. and Langford, T. (2014) International Solidarity or Renewed Trade Union Imperialism? The AFL–CIO and Garment Workers in Bangladesh. The Journal of Labor and Society, 17, pp. 169-186.

Stotz, L. and Kane, G. (2015). Global Garment Industry Factsheet. 1st ed. [ebook] Available at: https://www.cleanclothes.org/resources/publications/factsheets/general-factsheet-garment-industry-february-2015.pdf [Accessed 30 Mar. 2016].

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HRMP005 Presentation FINAL FINAL