Uniform Service Rules Key to Sustaining Bangladesh’s RMG Competitiveness

Bangladesh’s ready-made garment (RMG) and textile industry has become the driving force of the country’s economy, accounting for nearly 84 percent of export earnings and generating around USD 50 billion annually. Employing more than four million workers most of them women the sector has transformed Bangladesh into one of the world’s leading apparel exporters. However, despite its remarkable growth, the industry continues to face a significant structural challenge: the absence of uniform service rules across factories.

Although the Bangladesh Labour Act provides a legal framework, its implementation varies widely among factories. Differences in employment contracts, wage structures, overtime calculation, promotion policies, disciplinary procedures and grievance mechanisms have created inconsistent labour practices, legal uncertainties and operational inefficiencies. International studies by the International Labour Organization (ILO), the World Bank and other global institutions indicate that weak labour governance can reduce productivity by as much as 12 percent, while inconsistent compliance also weakens buyer confidence.

The need for reform has become more urgent as global markets increasingly demand transparency and responsible business practices. New European Union regulations, including the Corporate Sustainability Due Diligence Directive (CSDDD), the Digital Product Passport (DPP) and the Eco-design for Sustainable Products Regulation (ESPR), are making social compliance and supply-chain traceability essential conditions for market access. Factories with strong compliance systems continue to attract international buyers, while those failing social audits increasingly risk losing export orders.

The sector also faces persistent challenges, including high labour turnover, informal employment, wage-related disputes, weak grievance mechanisms and limited digitalization. Studies show that replacing workers significantly increases production costs, while inadequate human resource management reduces overall efficiency and employee satisfaction.

To address these issues, the article proposes the introduction of a uniform national service rule framework for the RMG and textile sector. The proposed framework includes standardized appointment letters, digital employee identification, transparent wage structures, automated overtime calculation, competency-based job grading, structured promotion systems and effective grievance redress mechanisms. It also recommends expanding social protection through health insurance, maternity benefits, workplace injury compensation and the introduction of a contributory pension system jointly supported by employers, employees and the government.

The framework further emphasizes digital transformation through Human Resource Management Information Systems (HRMIS), compliance dashboards and worker databases to improve transparency, strengthen governance and simplify compliance monitoring. Continuous skills development, performance-based evaluation and future-oriented training in automation, digital literacy and sustainable manufacturing are also identified as essential for enhancing productivity.

According to the analysis, adopting uniform service rules would generate benefits for all stakeholders. Workers would enjoy greater job security, improved working conditions and long-term financial protection. Factory owners would benefit from reduced turnover, higher productivity, stronger compliance performance and improved relationships with international buyers. At the national level, Bangladesh would strengthen its global reputation, attract greater foreign investment and ensure sustainable export growth.

The article also calls upon the Government of Bangladesh to establish a legally binding national service rule framework integrated with labour law reforms, while industry associations such as BGMEA and BKMEA should lead pilot implementation and sector-wide compliance initiatives. Development partners are encouraged to support digital transformation, pension pilots and technical capacity building.

The author cautions that delaying reform could weaken Bangladesh’s competitive position against countries such as Vietnam and India and may result in the loss of export market share in the coming years. He concludes that the future of Bangladesh’s RMG industry will depend not on producing the cheapest garments, but on producing them responsibly, transparently and sustainably. Establishing uniform service rules, therefore, is no longer simply a labour policy issue it is a strategic economic imperative for safeguarding the country’s long-term competitiveness in the global apparel market.

Commonwealth Scholar, C.Text FTI

Vice Chancellor (Designated), BGMEA University of Fashion & Technology (BUFT)