Report in which the committee requests to be kept informed of development - Report No 337, June 2005

Case No 2327 (Bangladesh) - Complaint date: 03-MAR-04 - Closed

Allegations: The complainant organization alleges that the Government violates the freedom of association in export processing zones (EPZs)

183. The complaint is set out in a communication by the International Textile, Garment and Leather Workers’ Federation (ITGLWF) dated 3 March 2004 on behalf of its affiliate, the Bangladesh Independent Garment Workers’ Union Federation (BIGUF).

1. 184. The Government has sent its reply in a communication dated 10 January 2005.
2. 185. Bangladesh has ratified both the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. The complainant’s allegations

1. 186. The complainant alleges that the Government of Bangladesh has denied the right of freedom of association to workers in the export processing zones (EPZs) in the country. According to the complainant, in 1992, after the United States Government threatened to revoke the generalized system of preference (GSP) facilities granted to Bangladesh because of the country’s denial of trade union rights in its EPZs, the Government of Bangladesh agreed to phase out the suspension of labour laws in the EPZs in three phases as follows: restoration of the Employment of Labour (Standing Orders) Act, 1965, in 1995; restoration of section 3 of the Industrial Relations Ordinance 1969 to allow freedom of association and formation of unions, in 1997; and restoration of all sections of the Industrial Relations Ordinance, 1969, in 2000. The complainant alleges that after the Government missed the first two deadlines, the United States Government indicated in 1999, that Bangladesh would lose its GSP status unless freedom of association was guaranteed in EPZs. The Government of Bangladesh then gazetted an official notice on 31 January 2001 to the effect that all workers in EPZs would have their legal rights in the zones, effective from 1 January 2004. According to the complainant, in the latter half of 2003 the Government however appeared to be backtracking on the issue of granting trade union rights in EPZs and towards the end of the year, the Government of Bangladesh indicated that it would seek an extension or alternative plan to the gazette notification of January 2001. On 28 December, the United States Ambassador agreed to extend the deadline for a relatively short period during which an agreement was to be negotiated to enable freedom of association to be granted to the EPZs. The Government of Bangladesh invited the World Bank to mediate this process.
2. 187. The complainant further states that it has repeatedly made approaches to the Government stressing that, as per the ILO standards which the Government is committed to observe, workers in EPZs cannot be denied either freedom of association or the right to bargain collectively, and have as much right as other workers to the full application of these standards.
3. B. The Government’s reply
4. 188. The Government states that 130,000 workers are employed in the country’s EPZs. During the initial period of operation, labour laws were not suspended in the EPZs. However, in 1986 the country’s first EPZ in Chittagong, suffered serious labour unrest due to instigation from vested interest groups and outside trade unions. In order to restore the productive working environment and to safeguard labour employment and foreign investment, the following laws were suspended through government notifications: the Industrial Relations Ordinance, 1969, on 6 March 1986; the Employment of Labour (Standing Orders) Act, 1965, on 6 March 1986; and The Factories Act, 1965, on 9 January 1989. The Government indicates that the following factors were taken into consideration while deciding to exempt EPZs from the application of the aforesaid laws:
5. (i) the reservation of foreign investors to trade unionism;
6. (ii) the need to create an enabling environment for the industrial growth of the country – the Government points out that in the case of a developing country like Bangladesh, apart from labour rights issues, associated socio-economic factors like literacy rate, life expectancy, poverty level, required environment and infrastructure should be taken into account. According to the Government, these are factors which would facilitate appropriate application of workers’ rights in EPZs and produce a meaningful outcome for all stakeholders;
7. (iii) the economic realities of the country – the Government states that 33.7 per cent of the total population of Bangladesh still lives under the poverty line and it has been striving hard to alleviate poverty by creating more employment opportunities. EPZs in Bangladesh are considered as one means to achieve this objective. The historical experience with trade unions has however not been encouraging and the introduction of trade unions would put the 130,000 workers in EPZs and their dependent family members in a state of uncertainty. The right of EPZ workers to food, shelter, medical facilities and other basic needs also should be treated with utmost importance. The potential threat of abuse of workers’ rights in the name of trade unions is likely to retard the economic development of the country in terms of job loss and foregoing export earnings, foreign direct investment as well as linkage benefits.
8. 189. The Government states that the American Federation of Labor-Congress of Industrial Organizations (AFL-CIO) had filed a number of petitions appealing for the withdrawal of the GSP facility to Bangladesh until the restoration of the abovementioned laws in the EPZs. It adds that the Bangladesh Export Processing Zones Authority (BEPZA) had taken several reformative measures in a bid to comply with international labour standards both by modification of its existing instructions and introducing new instructions. These measures include making the workers’ welfare committees more democratic and participatory, providing workers’ representatives the opportunity to discuss on all matters of mutual interest and protection against disciplinary action initiated by the management or punishment. The Government also refers to a report of a foreign independent audit firm SGS, which reviewed the BEPZA instructions and the performance of workers’ welfare committees. According to the Government, the findings of this firm suggest that BEPZA instructions are much more effective in addressing workers’ benefits, employment conditions and wages issues. The report also stressed the need for additional training in order to strengthen workers’ welfare committees and create a sound industrial relations environment within the EPZs.
9. 190. The Government finally states that a separate law entitled “EPZ Workers’ Associations and Industrial Relations Act, 2004 (Act No. 23 of 2004)”, was enacted on 18 July 2004, giving rights to workers in EPZs to form associations of their own.

C. The Committee’s conclusions

1. 191. The Committee notes that this case concerns the freedom of association of workers in export processing zones (EPZs) in Bangladesh. According to the complainant, the Government of Bangladesh had suspended the operation of the Industrial Relations Ordinance, 1969, in the country’s EPZs, as a result of which workers in the zones had been denied the right to freedom of association and the right to bargain collectively. The complainant indicates that under the threat of revocation of its GSP status by the United States Government, the Government agreed to phase out the suspension of labour laws in the zones and also gazetted an official notice on 31 January 2001 to the effect that workers in EPZs would be granted freedom of association from 1 January 2004 but subsequently appeared to be backtracking on the issue.
2. 192. The Committee notes that the Government has indicated that based on economic and other considerations, the operation of the Industrial Relations Ordinance, 1969, and the Employment of Labour (Standing Orders) Act, 1965, was suspended in the zones on 6 March 1986 and the operation of the Factories Act, 1965, on 9 January 1989. The Government also refers to measures introduced by the Bangladesh Export Processing Zones Authority (BEPZA), to make workers’ welfare committees more democratic and participatory, and finally to the recently passed law entitled “EPZ Workers’ Associations and Industrial Relations Act, 2004” (hereinafter, the Act), which according to the Government, provides EPZ workers with the right to form associations of their own.
3. 193. The Committee notes that section 5 of the Act, requires the formation by employers and workers in EPZs of workers’ representation and welfare committees (WRWCs), in industrial units in EPZs and, as per section 11 of the Act, the WRWCs would be in existence until 31 October 2006. Thereafter, from 1 November 2006, in accordance with section 13(1) and other provisions in Chapter III of the Act, workers in EPZs would have certain rights to form workers’ associations. If such an association is formed in an industrial unit, a WRWC shall cease to exist. If there is no workers’ association in the industrial unit, the WRWC may continue to function at the option of the employer.
4. 194. The Committee notes that the result of the Act is to further postpone the effective recognition of the right to organize in EPZs until November 2006. Moreover, the Committee is not certain of the long-lasting impact of this right once it is introduced as section 13(3), provides that the duration of a workers’ association shall be through 31 October 2008, from 1 November 2006.
5. 195. Recalling that workers in EPZs – despite the economic arguments often put forward – like other workers, without distinction whatsoever, should enjoy the trade union rights provided for by the freedom of association Conventions [see Digest of decisions and principles of the Freedom of Association Committee, 4th edition, 1996, para. 240], the Committee considers the blanket denial of the right to organize to workers in EPZs until 31 October 2006, as amounting to a serious violation of freedom of association principles and, in particular, Article 2 of Convention No. 87, which guarantees to all workers the right to establish and join organizations of their own choosing. The Committee therefore requests the Government to take all possible measures to amend section 13(1) of the Act, so as to expedite the recognition of the right to organize to EPZ workers. Recalling further that the right to organize should not be limited in time, the Committee requests the Government to clarify the impact of section 13(3) on newly formed organizations after October 2008, and if this provision would result in the limitation of workers’ associations to a trial period, to ensure its immediate repeal.
6. 196. The Committee notes that section 11(3) provides that a WRWC shall cease to exist as soon as a workers’ association is formed in an industrial unit. Section 11(2) however provides that where no association has been formed, a WRWC may continue to function even after 31 October 2006, at the option of the employer. The Committee considers that, in respect of industrial units where a workers’ association has not been formed for whatever reason, it may indeed be in the interest of the concerned workers that the WRWCs continue to exist and function even after 31 October 2006, and that the continuance of the WRWC in such circumstances should not be contingent upon the employer’s will. The Committee, therefore, requests the Government to take the necessary measures to amend section 11(2) so as to ensure that WRWCs may continue to function beyond 31 October 2006 in industrial units where a workers’ association has not been formed and that their continuance is not subject to the employer’s approval, while ensuring that the establishment and functioning of workers’ organizations are not undermined.
7. 197. The Committee further notes that, as per section 24, workers in industrial units established after the commencement of the Act will not be allowed to form workers’ associations until the expiry of a period of three months following the commencement of commercial production in the concerned unit. The Committee considers that section 24 is contrary to Article 2 of Convention No. 87, which guarantees to workers, without distinction whatsoever, the right to establish and join organizations of their own choosing. The Committee therefore requests the Government to take all necessary measures to amend section 24, so as to ensure that workers in industrial units established after the commencement of the Act may form workers’ associations from the beginning of their contractual relationship.
8. 198. The Committee notes that, as per section 25(1), there cannot be more than one workers’ association in an industrial unit. The Committee recalls in this context that the right of workers to establish organizations of their own choosing implies, in particular, the effective possibility to create – if the workers so choose – more than one workers’ organization per enterprise. A provision of the law which does not authorize the establishment of a second union in an enterprise fails to comply with Article 2 of the Convention, which guarantees workers the right to establish and join organizations of their own choosing, without previous authorization [Digest, op. cit., paras. 280 and 281]. The Committee therefore, requests the Government to take all necessary measures to repeal section 25(1) so as to ensure that there exists the effective possibility of establishing more than one workers’ association in an industrial unit, if the workers choose to do so.
9. 199. Under sections 14 and 15 of the Act, a workers’ association may be formed only when a minimum of 30 per cent of the eligible workers of an industrial unit seek its formation, and this has been verified by the executive chairperson of the authority (that is the BEPZA), who shall then conduct a referendum on the basis of which the workers shall acquire the legitimate right to form an association under the Act, only if more than 50 per cent of the eligible workers cast their vote, and more than 50 per cent of the votes cast are in favour of the formation of the workers’ association. When the results of the referendum are in favour of the formation of an association, section 17(1) requires the executive chairperson of the authority to ask the workers to form a constitution drafting committee, and section 17(2) requires the executive chairperson of the authority to approve of the Committee. Thereafter, as per section 20, the convener of the constitution drafting committee is to apply to the executive chairperson of the authority for registration of the workers’ association.
10. 200. The Committee recalls that, although the founders of a trade union should comply with the formalities prescribed by legislation, these formalities should not be of such a nature as to impair the free establishment of organizations [Digest, op. cit., para. 248]. Moreover, the Committee has already indicated more generally in respect of the Bangladesh Industrial Relations Ordinance, that the minimum membership requirement of 30 per cent of the workers concerned to form an organization is too high, and has requested the Government to amend the relevant provision [Case No. 1862, 306th Report, para. 102]. The Committee therefore requests the Government, in consultation with the workers’ and employers’ organizations concerned, to amend the legislation so as to avoid the obstacles that can be created by the minimum membership and referendum requirements to the formation of workers’ organizations in export processing zones. The Committee further considers the powers of discretionary approval granted to the executive chairperson of the authority as regards the constitution drafting committee as granting excessive powers to the BEPZA that could give rise to undue interference in the activities and formation of workers’ associations. The Committee therefore, requests the Government to take all necessary measures to amend section 17(2) so as to eliminate the need for prior approval of the constitution drafting committee by the executive chairperson of the authority.
11. 201. The Committee further notes in this regard that section 16 provides that, when a referendum held under section 15 does not result in a mandate being obtained for the formation of a workers’ association, no further referendum shall be held for the same industrial unit until the expiry of one year thereafter. The Committee considers that section 16 unreasonably restricts the right of workers in EPZs to establish and join organizations of their own choosing and is contrary to Article 2 of Convention No. 87. The Committee therefore requests the Government to take all necessary measures to repeal section 16 of the Act, so that workers shall not be barred from establishing organizations simply because such an attempt may have failed.
12. 202. Along the same lines, the Committee notes that subsection (7) of section 35 provides that, once an association is de-registered under the section, no further association shall be allowed in that industrial unit until the expiry of one year from the date of notification of deregistration. The Committee considers that the effect of section 35(7) is to deny workers in EPZs freedom of association for a substantial period of time upon deregistration of an association and this is contrary to Article 2 of Convention No. 87, which guarantees to all workers the right to form and join associations of their own choosing.
13. 203. More generally, section 35 permits deregistration of a workers’ association at the request of 30 per cent of the eligible workers (meaning those in the relevant unit), apparently even if they are not members of the association. The Committee notes that section 35 thus has the potential to seriously limit the right to organize EPZ workers. The Committee considers that deregistration of an association is an issue that should be solely governed by the constitutions of the workers’ associations. In fact, section 18(1) of the Act requires the constitutions of workers’ associations to prescribe the manner in which the workers’ association may be deregistered. The Committee therefore requests the Government to take all necessary measures to repeal the whole of section 35 so as to ensure that the issue of deregistration of workers’ associations is governed solely by the constitutions of the associations and so that workers in industrial units in EPZs are not deprived of their right to organize for any period of time following the deregistration of a workers’ association.
14. 204. The Committee further notes that under section 36 the registration of a workers’ association may be cancelled on a variety of grounds and in many cases would appear to be either excessive as compared to the type of breach committed, such as contravention of any of the provisions of its constitution, or simply in violation of principles of freedom of association. An example of the latter is that a workers’ association may be cancelled for committing an unfair labour practice which, under section 42(1)(a) would include persuading a worker to join or refrain from joining an association during working hours. The Committee considers that attempts at recruiting new members are part of the lawful activities of a workers’ association, and the serious consequence of cancellation of registration on the basis of such an attempt being characterized as an unfair practice under section 42(1)(a), is contrary to the principles of freedom of association. The Committee, therefore, requests the Government to take the necessary measures to repeal sections 36(1)(c), (e)-(h) and 42(1)(a), so as to ensure that the extremely serious consequence of cancellation of registration of a workers’ association is restricted to the seriousness of the violation committed.
15. 205. Under section 18(2) of the Act, no workers’ association shall obtain or receive any fund from any outside source without the prior approval of the executive chairperson of the authority. The Committee recalls that trade unions should not be required to obtain prior authorization to receive international financial assistance in their trade union activities [Digest, op. cit., para. 633]. The Committee considers that the said provision interferes with the right of workers’ organizations to organize their administration and activities without interference from the public authorities. The Committee, therefore, requests the Government to take the necessary measures to amend section 18(2) so as to ensure that workers’ associations in EPZs are not required to obtain prior authorization to receive financial assistance in respect of their trade union activities.
16. 206. The Committee notes that as per section 88(1), no strike or lockout shall be permissible in any industrial unit in an EPZ until 31 October 2008 and as per section 88(2), in the meanwhile, all labour disputes will be subject to mandatory and binding arbitration. There is thus a total prohibition of the right to strike of workers in EPZs until 31 October 2008. The Committee recalls that the right to strike is one of the essential means through which workers and their organizations may promote and defend their economic and social interests. The right to strike can only be restricted (such as by the imposition of compulsory arbitration to end a strike) or prohibited in essential services in the strict sense of the term, that is, those services whose interruption would endanger the life, personal safety or health of the whole or part of the population [Digest, op. cit., paras. 475 and 516]. The Committee therefore, requests the Government to take the necessary measures to amend section 88(1) and (2) so as to expedite the recognition of industrial action in EPZs before 31 October 2008.
17. 207. The Committee further notes that, once strike action is recognized under the Act, a number of provisions severely restrict the exercise of this right. Under section 54(3), the executive chairperson of the authority may prohibit a strike or lockout if it continues for more than 15 days and under 54(4), the executive chairman may prohibit it even before the expiry of 15 days if he or she is satisfied that the continuance of the strike or lockout is causing serious harm to productivity in the EPZ, or is prejudicial to the public interest or the national economy. The Committee considers that these provisions place a substantial limitation on the workers’ right to strike as a legitimate means of defending their occupational and economic interests. The Government may, however, consider the possibility of providing for a negotiated minimum service so as to effectively ensure the safe functioning of machinery within the EPZs. It, therefore, requests the Government to take the necessary measures to amend section 54(3) and (4) so as to ensure that industrial action in EPZs may only be restricted in accordance with the abovementioned principle.
18. 208. Under section 32(1) of the Act, a federation may be formed only when more than 50 per cent of the workers’ associations in an EPZ agree to its formation. The Committee recalls that the requirement of an excessively high minimum number of trade unions to establish a higher level organization conflicts with Article 5 of Convention No. 87, and with the principles of freedom of association [Digest, op. cit., para. 611]. The Committee considers the requirement of agreement by more than 50 per cent of the workers’ associations in an EPZ for the formation of a federation to be excessively high. The Committee therefore requests the Government to take the necessary measures to amend section 32(1) so as to ensure that the formation of federations is not conditional on such an excessively high requirement concerning member associations.
19. 209. Section 32(3) prohibits a federation from affiliating or associating in any manner with federations in other EPZs and also with other federations beyond EPZs. The Committee recalls that, in order to defend the interests of their members more effectively, workers’ and employers’ organizations should have the right to form federations and confederations of their own choosing, which should themselves enjoy the various rights accorded to first-level organizations, in particular as regards their freedom of operation, activities and programmes [Digest, op. cit., para. 621]. The Committee, therefore, considers that federations formed in EPZs should have the right to form and join confederations at a regional or national level and requests the Government to take the necessary measures to amend section 32(3) accordingly.
20. 210. The Committee notes that several provisions of the Act interfere with the right of workers to elect their representatives in full freedom: for instance; section 5(7) provides that the procedure of election to the WRWC shall be determined by the authority, section 5(6) provides that the manner of selection of the convener from amongst the elected members of the WRWC shall be determined by the executive chairperson of the authority; section 28(1) empowers the authority to organize and conduct the elections to the executive council of the workers’ association; section 29 requires the executive council to be approved by the executive chairperson of the authority within five days of the results of the election; and section 32(4) provides that the procedure of election and other details in respect of federations shall be determined by the authority. The Committee recalls that the right of workers’ organizations to elect their own representatives freely is an indispensable condition for them to be able to act in full freedom and to promote effectively the interests of their members. For this right to be fully acknowledged, it is essential that the public authorities refrain from any intervention which might impair the exercise of this right, whether it be in determining conditions of eligibility of leaders or in the conduct of the elections themselves [Digest, op. cit., para. 353]. The Committee therefore, requests the Government to take the necessary measures to ensure that the elections to be held under the provisions of the Act are conducted without any interference from the public authorities, including the BEPZA and its executive chairperson.
21. 211. In conclusion, the Committee must express its concern that the EPZ Workers’ Associations and Industrial Relations Act, while taking certain steps to provide greater freedom of association to EPZ workers, contains numerous and significant restrictions and delays in relation to the right to organize in EPZs such that the Committee must query whether in these circumstances this right may be truly and effectively exercised. The Committee, therefore, urges the Government to review the Act without delay in the light of its conclusions set forth above, so as to ensure meaningful respect for the freedom of association of EPZ workers in the very near future. The Committee reminds the Government that it may avail itself of the technical assistance of the Office to this end, if it so desires. It requests the Government to keep it informed of all measures taken in this regard.
22. 212. The Committee draws the attention of the Committee of Experts on the Application of Conventions and Recommendations to the legislative aspects of this case.

The Committee's recommendations

1. 213. In the light of its foregoing conclusions, the Committee requests the Governing Body to approve the following recommendations:
   • (a) The Committee urges the Government to review the EPZ Workers’ Associations and Industrial Relations Act, without delay in the light of its conclusions set forth above, so as to ensure meaningful respect for the freedom of association of EPZ workers in the very near future, and to keep it informed of all measures taken in this regard. In particular, the Committee requests the Government to take all necessary measures to:
   • (i) amend section 13(1) so as to expedite the recognition of the right to organize to EPZ workers, in view of the blanket denial of the right to organize until 31 October 2006,which it deplores;
   • (ii) amend section 11(2) so as to ensure that workers’ representation and welfare committees may continue to function beyond 31 October 2006 in industrial units where a workers’ association has not been formed and that their continuance is not subject to the employer’s approval, while ensuring that the establishment and functioning of workers’ organizations are not undermined;
   • (iii) amend section 24 so as to ensure that workers in industrial units established after the commencement of the Act may form workers’ associations from the beginning of their contractual relationship;
   • (iv) repeal section 25(1) so as to ensure that there exists the effective possibility of establishing more than one workers’ association in an industrial unit, if the workers choose to do so;
   • (v) amend the legislation, in consultation with the workers’ and employers’ organizations concerned, so as to avoid the obstacles that can be created by the minimum membership and referendum requirements to the formation of workers’ organizations in export processing zones;
   • (vi) amend section 17(2) so as to eliminate the need for approval of the constitution drafting committee by the executive chairperson of the authority;
   • (vii) repeal section 16 so that workers shall not be barred from establishing organizations simply because their attempt to establish a workers’ association may have failed;
     • (viii) repeal the whole of section 35 so as to ensure that the issue of deregistration of workers’ associations is governed solely by the constitutions of the associations and so that workers in industrial units in EPZs are not deprived of their right to organize for any period of time following the deregistration of a workers’ association;
   • (ix) repeal sections 36(1)(c), (e)-(h) and 42(1)(a) so as to ensure that the extremely serious consequence of cancellation of a workers’ association is restricted to the seriousness of the violation committed;
   • (x) amend section 18(2) so as to ensure that workers’ associations in EPZs are not required to obtain prior authorization to receive financial assistance in respect of their trade union activities;
   • (xi) amend section 88(1) and (2) so as to expedite the recognition of industrial action in EPZs before 31 October 2008;
   • (xii) amend section 54(3) and (4) so as to ensure that industrial action in EPZs may only be restricted in accordance with the principle of providing for a negotiated minimum service so as to effectively ensure the safe functioning of machinery within the EPZs or to avoid an acute national crisis endangering the normal living conditions of the population;
     • (xiii) amend section 32(1) so as to ensure that the formation of federations is not conditional on an excessively high requirement concerning member associations;
   • (xiv) amend section 32(3) so as to ensure that federations formed in EPZs have the right to form and join confederations at a regional or national level; and
   • (xv) ensure that the elections to be held under the provisions of the Act are conducted without any interference from the public authorities, including the BEPZA and its executive chairperson.
   • (b) The Committee requests the Government to clarify the impact of section 13(3) of the Act on newly formed organizations after October 2008 and, if this provision would result in the limitation of workers’ associations to a trial period, to ensure its immediate repeal.
   • (c) The Committee reminds the Government that it may avail itself of the technical assistance of the Office, if it so desires.
   • (d) The Committee draws the attention of the Committee of Experts on the Application of Conventions and Recommendations to the legislative aspects of the case.

Annex

1. EPZ Workers’ Associations and Industrial Relations Act, 2004 (extracts)
2. ...
3. 5. Workers’ Representation and Welfare Committee – (1) After commencement of this Act, the Executive Chairman or any officer authorized by him in that behalf, shall require the employer and the workers in an industrial unit in a Zone to constitute, in prescribed manner, a Workers’ Representation and Welfare Committee, hereinafter referred to as the Committee.
4. (2) Every employer registered as a company with a separate certificate of incorporation and operating as such in a Zone shall have one committee under it in that Zone:
5. Provided that two or more industrial units in a Zone under an employer registered as a company shall be deemed to be one industrial unit for the purposes of this section.
6. (3) The Committee shall, subject to the provision of sub-section (4), consist of not more than 15 (fifteen) and not less than 5 (five) members with one of them as the convener.
7. (4) If the number of workers eligible to vote is above 500 (five hundred), the number of members in the Committee shall be increased over 5 (five) at the ratio of 1 (one) per 100 (one hundred) workers, but shall not exceed the aforesaid 15 (fifteen).
8. (5) The Committee shall be formed only with the eligible workers employed in the industrial unit in a Zone for which the Committee is formed.
9. (6) The members of a Committee shall be elected through secret ballots from among the eligible workers, and the Convener from among the elected members of the said Committee, in a manner to be determined by the Executive Chairman.
10. (7) The procedure of election under this Chapter shall be determined by the Authority.
11. (8) The employer shall provide necessary space within the Zone for establishing the office of the Committee.
12. ...
13. 11. Duration and cessation of Committee – (1) A Committee constituted in a Zone shall be in existence until October 31, 2006.
14. (2) Subject to the provision of sub-section (3), a Committee may continue to function even after October 31, 2006 at the option of the employer.
15. (3) A Committee shall cease to exist as soon as a Workers’ Association is formed in that industrial unit.
16. ...
17. 13. Formation of Workers’ Association – (1) With the expiry of October 31, 2006 and beginning of November 1, 2006, the workers in an industrial unit situated within the territorial limits of a Zone shall have the right to form association to engage in industrial relations subject to the provisions made by or under this Act.
18. (2) Every employer registered as a company with a separate certificate of incorporation and operating as such in a Zone shall have one Workers’ Association under it in that Zone:
19. Provided that two or more industrial units in a Zone under an employer registered as a company shall be deemed to be one industrial unit for the purposes of this section.
20. (3) The duration of a workers’ association shall be through October 31, 2008 from November 1, 2006.
21. 14. Requisition for formation of association – (1) If the workers in an industrial unit situated within the territorial limits of a Zone intend to form an association, not less than 30% (thirty per cent) of the eligible workers of the industrial unit shall apply in a prescribed form to the Executive Chairman demanding formation of a workers’ association.
22. (2) Upon receipt of an application under sub-section (1), the Executive Chairman shall verify and ascertain that not less than 30% (thirty per cent) of the eligible workers have subscribed to the application by signature or thumb impression.
23. (3) No employer shall in any manner discriminate against a worker for subscribing to an application under sub-section (1), should ultimately the workers’ association be not formed on the basis of the result of the referendum held under section 15, and any such discrimination shall be deemed to be an unfair labour practice by the employer under section 41.
24. (4) A form signed by a worker under this section shall remain valid up to six months from the date of its signature; and such form shall not be filled in or signed before November 1, 2006.
25. 15. Referendum to ascertain support for association – (1) If the Executive Chairman is satisfied under sub-section (2) of section 14 that not less than 30% of the eligible workers have applied in prescribed forms demanding formation of association, he shall arrange to hold a referendum of the eligible workers of the industrial unit within the Zone, within a period not later than five days from the date of receipt of the application under sub-section (1) of section 14, to ascertain the support of the eligible workers in favour of formation of workers’ association.
26. (2) If more than 50% (fifty per cent) of the eligible workers do not cast votes, the referendum under this section shall be ineffective.
27. (3) If more than 50% (fifty per cent) of the workers cast votes, and more than 50% (fifty per cent) of the votes cast are in favour of formation of workers’ association, the workers in the said industrial unit shall, thereby, acquire the legitimate right to form an association under this Act, and the Executive Chairman shall be required to accord registration to that association within 25 (twenty-five) working days of the date of the referendum.
28. (4) The referendum shall be held through secret ballots and the Executive Chairman shall determine the necessary procedure in respect of holding of the referendum, if not, in the meantime, prescribed by regulations.
29. 16. No further referendum in one year – If in a referendum held under section 15, mandate cannot be obtained for formation of workers’ association, no further referendum shall be held for the same industrial unit until the expiry of one year since thereafter.
30. 17. Constitution of the workers’ association – (1) If workers exercise their option under section 15 in favour of formation of workers’ association, the Executive Chairman shall, within a period not later than five days thereafter, ask the workers to form a Constitution Drafting Committee (hereinafter referred to as the “Constitution Committee” as and when deemed to be appropriate), consisting of not more than nine representatives with one of them as the Convener.
31. (2) The Executive Chairman shall, on being satisfied, approve the Constitution Committee within 5 days of receipt of the proposal, and shall ask the Constitution Committee to frame and submit a constitution of the workers’ association within a period of 15 days.
32. (3) No provision of the constitution shall be contrary to any provision of this Act, and it shall conform to the provisions of this Act.
33. (4) The constitution of an association under this Act shall propose:
34. (a) a General Council to consist of the eligible workers who shall be registered as members of the workers’ association; and
35. (b) an Executive Council to consist of, among other positions, a President, a General Secretary, a Treasurer and such number of other positions not exceeding fifteen in total. All the members in the Executive Council shall be elected by the members of the General Council.
36. 18. Further requirements of the constitution – (1) A constitution for the formation of an association shall not be approved under this Act, unless the constitution thereof further provides for the following matters, namely:
37. (a) the name and address of the workers’ association;
38. (b) the objects for which the workers’ association has been formed;
39. (c) the manner in which a worker may become a member of the workers’ association specifying therein that no worker shall be enrolled as its member unless he applies in the form set out in the constitution;
40. (d) the sources of the fund of the workers’ association and the purposes for which such fund shall be applicable;
41. (e) the conditions under which a member shall be entitled to any benefit assured by the constitution of the workers’ association and under which any fine or forfeiture may be imposed on him;
42. (f) the maintenance of a list of the members of the workers’ association and of adequate facilities for the inspection thereof by the officers and members of the workers association;
43. (g) the manner in which the constitution shall be amended, varied or repealed;
44. (h) the safe custody of the funds of workers’ association, its annual audit, the manner of audit and adequate facilities for inspection of the account books by the officers and members of workers’ association;
45. (i) the manner in which the workers’ association may be de-registered;
46. (j) the manner of election of officers by the General Council of the workers’ association and the term for which an officer may hold office upon his election or re-election;
47. (k) the procedure about resignation from the General Council of the workers’ association and cancellation of membership;
48. (l) the procedure for expressing want of confidence in any officer of the workers’ association; and
49. (m) the meetings of the Executive Council and General Council of the workers’ association, where there shall be obligation for the Executive Council to meet at least once in every four months and for the General Council to meet at least once in every year.
50. (2) No workers’ association shall obtain or receive any fund from any outside source without the prior approval of the Executive Chairman.
51. ...
52. 24. No association in a new industrial unit for three months – No workers’ association shall be allowed to be formed under this Act, in any industrial unit established in a Zone after the commencement of this Act, unless a period of three months has expired after the commencement of commercial production in that industrial unit.
53. 25. Restriction in respect of number of association – (1) There shall not be more than one workers’ association in an industrial unit in a Zone.
54. (2) If there are more than one industrial units under the same employer or company in a Zone and any of the said units comes within the restriction under section 24, that shall not bar formation of workers’ association for the rest of the units.
55. ...
56. 32. Federation of Associations – (1) If more than 50% (fifty per cent) of the workers’ associations in a Zone agree, they shall be entitled to form one Federation of Workers’ Associations in that Zone.
57. (2) Unless earlier de-registered or ceases to exist, a federation formed under this section shall hold office for a period of four years from the date of its being approved by the Executive Chairman.
58. (3) A federation formed within the territorial limits of one Zone shall not affiliate or associate in any manner with another federation in another Zone or with any other federation beyond any Zone.
59. (4) The Authority shall determine, by regulations, the procedure of election and other details in respect of the Federation of Workers’ Associations.
60. ...
61. 35. De-registration of workers’ association – (1) At any time during the existence of a workers’ association, not less than 30% of the eligible workers may apply in prescribed form to the Executive Chairman demanding de-registration of the Association.
62. (2) Upon receipt of an application under sub-section (1), the Executive Chairman shall verify and ascertain that not less than 30% of the eligible workers have subscribed to the application by signature or thumb impression.
63. (3) If the Executive Chairman is satisfied under sub-section (2), he shall hold a referendum in 5 days by secret ballots of the eligible workers to ascertain demand in favour of such de registration.
64. (4) If more than 50 per cent of the eligible workers cast votes in the referendum and if more than 50 per cent of the votes cast are in favour of de-registration of the Association, the Executive Chairman shall, within 25 days thereafter, issue an order notifying de-registration.
65. (5) No employer shall in any manner discriminate against a worker for subscribing to an application under sub-section (1), should ultimately the workers’ association be not de-registered under sub-section (4) on the basis of the result of the referendum held under sub-section (3); and any such discrimination shall be deemed to be an unfair practice on the part of the employer under section 41.
66. (6) The Authority shall, by regulations, determine and prescribe procedure and further details in respect of referendum under this section.
67. (7) Once an association is de-registered under this section, no further association shall be allowed in that industrial unit until the expiry of one year from the date of notification of de-registration.
68. (8) A form signed by a worker under sub-section (1) shall remain valid up to six months from the date of signature.
69. 36. Cancellation of registration of workers’ association – (1) In addition to the procedure regarding de-registration under section 35, the Executive Chairman may also, subject to the provision of sub-section (2), cancel the registration of a workers’ association on any of the grounds stated below, that the workers’ association has:
70. (a) ceased to exist on any ground;
71. (b) obtained registration by fraud or by misrepresentation of facts;
72. (c) contravened any of the provisions of its constitution;
73. (d) committed any unfair practice;
74. (e) inserted in its constitution any provision which is inconsistent with this Act or rules or regulations made thereunder;
75. (f) failed to submit its annual report to the Executive Chairman as required under this Act;
76. (g) elected as its officer a person who is disqualified under this Act to be elected as such officer; or
77. (h) contravened any of the provisions of this Act or rules or regulations made thereunder.
78. (2) Where the Executive Chairman is of the opinion that the registration of a workers’ association should be cancelled, he shall submit an application to the Tribunal praying for permission to cancel such registration.
79. (3) The Executive Chairman shall cancel the registration of a workers’ association within five days of the date of receipt of permission from the Tribunal.
80. (4) The registration of an association shall not be cancelled on the ground mentioned in clause (d) of sub-section (1) if the unfair practice is not committed within three months prior to the date of submission of the application to the Tribunal.
81. ...
82. 42. Unfair practices on the part of workers or association – (1) It will be an act of unfair practice for a worker, workers’ association or any person acting on behalf of such a worker or workers’ association to:
83. (a) persuade a worker to join or refrain from joining an association during working hours;
84. (b) intimidate any person to become, or refrain from becoming, or to continue to be or to cease to be a member or officer of an association;
85. (c) induce any person to refrain from becoming, or cease to be a member or officer of an association, by conferring or offering to confer any advantage on or by procuring or offering to procure any advantage for, such person or any other person;
86. (d) compel or attempt to compel the employer to sign a memorandum of settlement by using intimidation, coercion, pressure, threat, confinement to a place, physical injury, disconnection of telephone, water and power facilities or resorting to any other similar technique; or
87. (e) compel or attempt to compel any worker to pay, or refrain from paying, any subscription towards the fund of any workers’ association by using intimidation, coercion, pressure, threat, confinement to a place, physical injury, disconnection of telephone, water and power facilities or resorting to any other similar technique.
88. (2) It shall be an unfair practice for a worker or an association to interfere with a ballot for holding any referendum or election under this Act, by the exercise of undue influence, intimidation, impersonation or by bribery through its Executive Council or through any person acting on its behalf.
89. ...
90. 54. Strike and Lock-out – (1) If no settlement is arrived at during the course of conciliation proceedings and the parties to the dispute do not agree to refer it to an Arbitrator under section 53, the workers may go on strike or, as the case may be, the employer may declare a lock-out, on the expiry of the period of the notice under section 50, or upon the issuance of a certificate by the Conciliator to the parties to the dispute to the effect that the conciliation proceedings have failed, whichever is the later.
91. (2) The parties to the dispute may, at any time, either before or after the commencement of a strike or lock-out, make a joint application to the EPZ Labour Tribunal for adjudication of the dispute.
92. (3) If a strike or lock-out continues for more than 15 days, the Executive Chairman may, by order in writing, prohibit the strike or lock-out.
93. (4) Notwithstanding the provision of sub-section (3), the Executive Chairman may, by order in writing, prohibit a strike or lock-out at any time before the expiry of 15 days, if he is satisfied that the continuance of such strike or lock-out is causing serious harm to productivity in the Zone or is prejudicial to public interest or national economy.
94. (5) In any case in which the Executive Chairman prohibits a strike or lock-out, he shall, forthwith, refer the dispute to the EPZ Labour Tribunal.
95. (6) The Tribunal shall, after giving both the parties to the dispute an opportunity of being heard, make such award as it deems fit as expeditiously as possible, but not exceeding 40 days from the date on which the dispute was referred to it.
96. (7) The Tribunal may also make an interim award on any matter of dispute, and any delay by the Tribunal in making an award shall not effect the validity of any award made by it.
97. (8) An award of the Tribunal shall be valid for such period, as may be specified in the award, but shall not be valid for more than two years.
98. ...
99. 88. Transitional and temporary provisions – Notwithstanding anything contained in this Act, the transitional and temporary provisions contained in this section shall be effective.
100. (1) No strike or lock-out – No strike or lock-out shall be permissible in any industrial unit in a Zone until October 31, 2008.
101. (2) Mandatory and binding arbitration – (a) Notwithstanding anything contained in section 53, arbitration shall be mandatory for the parties during the period beginning with commencement of this Act and ending with October 31, 2008.
102. (b) Mutually acceptable arbitrator shall be appointed by the parties from a list of arbitrators approved by the Authority. If the parties cannot agree on the selection of the arbitrator, the Executive Chairman shall assign an arbitrator from its approved list. The selection or appointment of the arbitrator shall be completed and the date of the arbitration hearing shall be fixed within 15 working days from the date of the request for arbitration. The arbitration hearing shall be completed and a written award shall be given within 30 days from the date of the first hearing.
103. (c) The decision of the arbitrator shall be binding on the parties and enforceable by the Executive Chairman. The Executive Chairman shall be authorized to take punitive measures as required to enforce the terms of the arbitrator’s decision.
104. (d) An appeal from an arbitrator’s decision shall be limited to decisions where there is reasonable suspicion and evidence of fraud, corruption or other major defects in the arbitrator’s decision.
105. (e) An appeal under clause (d) shall lie to the Labour Appellate Tribunal, and the Appellate Tribunal shall dispose the appeal within 30 days of the filing of the appeal, and the decision of the Appellate Tribunal shall be final and binding on the parties.