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Improving Labour Productivity through Enhancement of Social Standards- Dica Tex Limi

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Background

Promotion of Social and Environmental Standards in the Industry (PSES) is a joint project of the Governments of Bangladesh and Germany. It is being implemented by the Deutsche Gesellschaftfür Internationale  Zusammenarbeit (GIZ) GmbH on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ),in partnership with the Bangladesh Government. Since 2010, PSES has been working in partnership with industry associations in the Ready-Made Garments (RMG) sector for the improvement of the social and labour standards in enterprises under its Social Compliance Factory Improvement programme. In this regard, between 2015 and 2017, PSES in collaboration with the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), has piloted assessments in10factories to study the interrelation between social standards and labour productivity.A resulting case study is presented below.

Site Information

Dica Tex Limitedstarted operations as an export oriented knit manufacturer in 2011. The factory is located in Ashulia, Savar, Dhaka, with a workforce of around350, out of which around 66 per cent are female. The factory is a beneficiary of the Social Compliance Factory Improvement programme of BKMEA and PSES.

Baseline Assessment

Initially, BKMEA conducted an assessment of the ‘social standards’ status of the factory and found that workers are working on average sixty hours per week, which is above the legal limit. This factory also did not have an effective social dialogue platform between workers and management.For example,Participation Committee and Safety Committee along with other non-compliance issues such as maternity leave calculation was not made according to labour law, child care facility was not provided to working mothers, there was inadequate training on Health and Safety as well as the reluctance of workers to use Personal Protective Equipment (PPE) and so on. As a result, workers were exhausted due to excessive working hours and suffered from poor physical and mental health.

Moreover, this resulted in a low satisfaction levelamong workers which was evident in the high absenteeism rate of 3 per cent and migration rate of 5 per cent.

All these factors were negatively affecting the regular productivities and production qualities.. The factory was facing difficulties in order to control high rates of defects and low levels of production due to line-balancing with semi-skilled or unskilled workers.

Actions Implemented by the Factory

Following the advice of the BKMEA compliance team, Dica Tex Limited has taken steps to improve social and labour standards. The factory has controlled the excessive working hours  and kept it within legal limits, in order to reduce working stress. It also established effective social dialogue platform between workers and management via its Participation Committee and Safety Committee. Moreover, as per corrective action plans facilitated by BKMEA, Dica Tex Limited has taken measures to provide maternity leave and benefits as per labour law,equipped a child care room for working mothers ensure regular use of PPE by workers and enable a neat and clean workplace for a healthy environment.

“Our compliance manager teaches us many things and solves our problems quickly. I get my salary on time and can enjoy leave when needed. I am happy by getting chance to work here”

– Most. Sharifa Begum, Sewing Operator, Dica Tex Limited.

Impacts

  • Workers are managing their stress and balancing work-life better due to reduction of working hours as well as enhanced facilities such as maternity leave and benefits and child care. As a result, they are giving more attention to work which is reducing defectiveness of products.
  • Absenteeism has decreased in the factory by half per centand migration rate by 1 per cent.
  • Overall, these improvements in social and labour standards have resulted in increased labour productivity in the factory by 3.6 per cent- i.e. from 15.2 minutes to produce one baby item to 14.65 minutes.

Source of information: Baseline and end-line assessments done by the compliance and productivity cells of BKMEA.

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