WHAT IS ACT?
“Brands and retailers will ensure that their purchasing practices facilitate the payment of a living wage.”
ACT Memorandum of Understanding
FREEDOM OF ASSOCIATION (FOA)
In Myanmar, a better balance between business needs and workers expectations is required in order to reduce conflicts between workers and management that frequently disrupt production. Freedom of Association (FOA) and collective bargaining are the best way to deal with conflicting interest and to achieve mutual respect and joint responsibility.
Compliance with freedom of association – the right of workers to form and join trade unions – is a key requirement of the Codes of Conduct of ACT member brands.
Successful cooperation requires a common understanding about the contents and practical implications of Freedom of Association. That is why ACT brands have supported suppliers and trade unions in jointly developing a Guideline on Freedom of Association.
Download Myanmar Info Brief
Download Myanmar FOA Guideline
Download Letter of Agreement on FOA Guideline
OBJECTIVES OF THE MYANMAR FOA GUIDELINE
MYANMAR FREEDOM OF ASSOCIATION GUIDELINE PROCESS
Factories producing for ACT brands have established an Employer Working Group (EWG) to engage in the development of the Guideline on Freedom of Association. The working group nominated delegates to negotiate the content of the Guideline with the Industrial Workers’ Federation of Myanmar (IWFM), the sectoral trade union federation representing garment and footwear workers affiliated to IndustriALL Global Union.
The ILO has offered technical assistance to support suppliers and trade unions in the negotiation.
COLLECTIVE BARGAINING AT INDUSTRY LEVEL: A WIN-WIN COOPERATION
Tailor-made solutions for flexibility and security
Tailor-made solutions for flexibility and security Business needs the opportunity to respond timely to economic changes while workers should not be living in a world of daily economic insecurity. Collective bargaining at industry level – also often called sectoral collective bargaining – combines this dual need for flexibility and security.
Collective bargaining at industry level gives employers and workers the freedom to negotiate tailormade solutions and ensures that commonly agreed standards become binding for everyone. It is better suited than detailed laws to offer efficient solutions specific to the nature of the industry.
Level playing field
Sectoral collective bargaining sets a level playing field where competitive advantages cannot be won through substandard working conditions. Workers in the sector are entitled to the wages and benefits negotiated in the collective bargaining agreement independently of their specific employer. Predictability and transparency of wage increases offers business the stability that is needed for longer term investment.
Collective bargaining at industry level allows a wage setting process in a competitive environment where productivity gains can be fairly shared between employers and workers. It also enables the bargaining parties to agree on a continuous process of upgrading the industry and improving wages and working conditions. Collective bargaining agreements can provide for agreed wage scales to be introduced that set the wage for specific job or skill categories that are common across the sector. A pay system based on wage scales helps to retain qualified and experienced staff and offers new recruits a career path.
A stable and skilled workforce
Standards applicable throughout the industry reduce staff turnover rates as workers have fewer incentives to move from factory to factory in order to benefit from factory- based wage differentials. More stable workforces allow for investment in skills development and personal planning. When workers do move between factories, their skills and seniority can continue to be recognised.
Social peace and constructive relations between employers and workers
Determining wages and working conditions at enterprise level is time consuming and potentially conflictual. Setting wages through a negotiation process at industry level takes this potential for conflict out of the workplace and allows for a professional and structured wage setting process.