Bangladesh union representatives have signed a collective agreement with H&M and Inditex supplier Natural Denims Ltd for the first time, entitling workers to an annual wage increase, sick leave and a bonus scheme. 

The two-year agreement, signed by representatives of the Natural Denims Ltd Sommilito Sramik Union, includes a 7% annual wage increase, and two festival bonuses equal to one month's salary each for workers who have been employed for a year or more. Workers with a shorter period of service receive the bonus pro rata.

It also covers provisions for time off, maternity leave and medical care, and includes check off for union dues, which helps ensure the financial sustainability of the union, time off for union activity, including training for members, and an explicit grievance resolution mechanism.

The union is part of IndustriAlll Global Union affiliate the Sommilito Garments Sramik Federation (SGSF). IndustriAll already has global framework agreements with H&M and Inditex, which include a provision for encouraging collective bargaining. The SGSF was able to use this provision to establish the union at the factory, and to negotiate the agreement.

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Natural Denims Ltd employs about 3,500 people, two thirds of them women, at a plant in the Ashulia garment district of Dhaka. The company produces denim for H&M, Inditex (Zara) and a number of other brands, including Pull & Bear, K-Mart, Mango and Debenhams.

"The collective agreement at Natural Denims stands in stark contrast to the arrest and persecution of trade unionists at other factories," says IndustriAll assistant general secretary Jenny Holdcroft. "This is excellent news and shows the effectiveness of our global framework agreements with major brands. We have created the space for unions to organise and bargain. This agreement, and the one at Donglian Fashion last month, shows the effectiveness of our approach."

Donglian Fashion inks collective agreement with union