Multinational Enterprises, Labor Exploitation, and Worker Rights

This essay critically examines the contemporary Employment Relations (ER) and Human Resource Management (HRM) practices of multinational enterprises (MNEs) operating in India and Bangladesh. It highlights the alleged exploitation of workers, focusing on issues such as low wages, poor working conditions, child labor, and violations of human rights. The analysis draws upon academic research, government reports, and third-party sources to assess the impact of MNEs on local employees. The essay provides examples of factories and companies in Bangladesh and India that violate labor laws. The essay also discusses the influence of HRM practices on business success, exploring how HR managers sometimes disregard their responsibilities, leading to employee demotivation. The essay concludes by emphasizing the need for stricter regulations and government oversight to protect worker rights and ensure fair labor practices in the garment and other sectors, addressing issues like overtime, maternity leave, and the establishment of independent worker unions.

Running Head: MNE’S 0
International and Comparative HRM and ER

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Multinational enterprises: India and Bangladesh
It is true that multinational enterprises are known for paying higher pay rate as
compare to the domestic firms. However, the MNE’s from India and Bangladesh are
violating many laws by providing bad working conditions and low pay. Several cases are
seen where the female workers has been abused in the workplace for not working overtime.
Even after starting the several laws in India and Bangladesh, garment and other factories are
breaching the law. In spite of the trade unions, workers right are not protecting properly
(Amin, Diamond, Naved & Newby, 2018). The discussion is also carried on the employment
relation and human resource management practices that are violated by the multinational
enterprises. The literature has been supported by providing the examples form Bangladesh
factories.
Multinational enterprise is defined as the firm that control as well as own the
production facilities in two or more than two countries. The multinational enterprise
distributes as well as produces the goods or services across the national boundaries. In the
recent time, thousands of multinational enterprises are violating the rights of workers
(Rashid, Ahmad & Sarkar, 2014. Moreover, all these multinational corporations are likely to
bring the more jobs and best practices for workers. They also tend to pay more than the
domestic firms do. It is found in a report that the multinationals from foreign pay around 40%
more than the average wages. In order to reduce the worker turnover and monitoring cost,
they tend to offer the higher pay (Yawar, & Seuring, 2017).
In the recent time, it is found that garment factories of Bangladesh are paying low
wages and bad working conditions to their workers. Moreover, female exploitation has been
seen in the Bangladesh Ready Made garment (Haque & Azmat, 2015). The female workers of
Bangladesh suffer the physical and economic abuse due to their low status in the factory. As
per the wage structure, an entry-level worker should be paid around US$95 per month.
However, various factories are paying only US$ 68. This wage structure is the lowest all
across the world as per the survey report. Bangladesh is the second biggest exporter of the
readymade garments across globe by earning around US$27 billion every year by exporting
to EU and US (koh, H & Shah, V). Child labour is the strongest factor in the success of
Bangladesh apparel sector. However, due to the awakening of the working class, it is true that
low wages will not be tolerated for the longer time (Hesketh, Gamlin, Ong & Camacho,

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2012). After knowing that manufacturer of garment only spends their 12% revenue on the
wages, it is necessary to take the strict action (Obe, 2018). “Section 195” of the Bangladesh
Labour act also states the various unfair labour practices that should not be undertaken by the
factories. The interview conducted in Dhaka also underlines the various abusive practices that
come under this law. Most of the female workers have also stated that they faced the threats
as well as insults of the sexual nature (Dhaka Tribunal, 2019).
Low wages are not only the issue that is seen in the Bangladesh. Overall bad working
condition is also one such issue. Productivity also seems to be low. Due to the poor
infrastructure, several incidents have also occurred in the 2012 and 2013. The inadequate
infrastructure has led to the death of around 200 workers at the Tasreen garment factory in
the year 2012. In this incident, around 1134 persons died in the Rana Plaza disaster in the
year 2013 (Lattemann, Fetscherin, Alon, Li & Schneider, 2019). Several surveys has also
been done that states that around 70% garment workers complained that they do not have
saving. The several women workers are also facing the several health related complications
due to the stringent rules, unsafe factory condition, absence of the maternity leave, and
regular overtime working with the long working hours. Moreover, workers are informed at
the last moment that they have to work extra hours. If they do not get ready to work for extra
hours, they are threatened by verbal abuse as well as penalties.
As per the Section 201 of the Bangladeshi labour law, workers are only supposed to
work for eight hours. Garment workers are also required to work for extra hours on regular
basis for meeting the production targets as per factory owners (Dhaka Tribunal, 2019).
Research also shows that about 80% of the women workers leave the factory between 8 pm to
10 pm (Tasnim, Rahman, Rahman & Islam, 2016). The worst part of doing overtime job is
that still women workers remain unpaid. Owners of factory also cut their overtime payment
when they want it. Several factory owners do not tend to follow the Bangladesh law of 2006
that protects the right of maternity leave. Several women workers also forced to leave the job
after giving job. It is because they believe that women cannot work at the previous grade
(Naved et al, 2018).
Thousands of the workers in Bangladesh has staged the discrimination in Dhaka. Almost
all the new unions have rejected the new wages. The one of the biggest garment producer,
Bangladesh has shipped around $30 billion worth of the goods in the 4500 factories including
Walmart, H & M, Tesco and Gap. They also employed around 40 million workers including

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mostly women. In the collapse of Rana pLaza factory, around 1130 people died. Therefore,
breaching of the labour standards, continuous exploitation such as non-payment of minimum
wages, overtime work , abusive working conditions forced the slavery and labour (Pereira &
Malik, 2015).
HRM practices create impact on the growth and success of any business. However, in the
recent scenario the HR managers ignore their responsibilities and violated the rules and
regulation in practicing their activities that created level of demotivation among the
employees. India is one of the developing countries in which most of the MNEs managing
their business in an effective manner (Robinson, H., Buccini, Curry & Perez‐Escamilla,
2019). The HRM practices in such companies are violated at greater level as they are
explained in below points:
Under the Employment Exchange Act, 1959, if the state so required, a private sector
companies with more than 25 employees must inform the vacancy to specify the employment
exchanges. However, HR management of the companies’ ignores such rule in order to avoid
the rush in their company. It is required for every company that they need to check the
background f the candidate before select them for their company. The background check
includes criminal record, medical history, drug screening, and credit checks. However, most
of the Indian companies ignore such duty due to the reason it increases cost to the company.
Therefore, they selected the candidates according to their experience rather than checking
their background history that created unhealthy environment in their workplace at greater
level (Shah, Russell & Wilkinson, 2017). According to the Factories Act 1948, it is
responsibility of every HR in MNEs to provide healthy working environment to their workers
such as proper ventilation, sanitation and the maximum working hour should not be more
than 48 hours a week. However, Indian MNEs ignore such law and provided unhealthy
environment to their workers that created issue of illness and other diseases among the Indian
employees at greater level. it directly affected on the productivity of the company. Most of
the MNEs in India hire child labor for their work that creates main issue. It is one of the
common violated rules that are adopted by HR manager in their companies. In the recent
time, it has been found that Nike has caught in hiring the child labor for their work. it is one
of the most leading company in the international market. However, Such Company has not
followed such rules in their business. Likewise, other companies also promoted child labor in
their business that is one of the rules that is violated by them at greater level. Most of the

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MNEs also do not follow the rule of minimum wage pay in their business. it is one of the
important responsibility of the HR Manager to follow such rule as every country has different
criteria for minimum wage pay. Therefore, it is one of the responsibilities of the HR to follow
such rule and pay their employees according to the set criteria. However, most of the Indian
MNEs hire their employees or workers in fewer amounts and ignore such criteria that create
issue of demotivation among the employee at greater level (Stahl, Miska, Noval & Patock,
2016).
Similarly, in India, child labour has been adopted as the regular practice. It is accepted as
the measure to remove the poverty. Even the multinational enterprises are exploiting workers
in the developing countries. For example- Nike is accused of using the child labour in the
countries like India and Bangladesh. All these children were between the age group of 4 to 5
years. The lenient environment law is also one such reason for exploitation in India.
Companies can also use the child labour and there are no law to stop the working of 40 hours
in a workweek (Roggero, Mangiaterra, Bustreo & Rosati, 2017). The formula is almost
adopted by the all bosses for their success of factory. In India, the small farmers also used to
work in the mills and factories. They are also fighting for bringing improvement in their
wages as well as the working conditions. For decades, anti-slavery campaigners have been
working alongside labour rights groups, protesting against and attempting to expose the
human rights abuses hidden inside notoriously and deliberately complex global supply chains
(Backer, 2016). In this way, Bangladesh and India both are at peak in terms of exploiting the
factory workers including their wages. This is also the example of modern slavery that has
been come in front by the press of Bangladesh. In Bangladesh and India, millions of families
are also seen working overnight due to their owner was terminating the wholesale from their
respective factories. Therefore, most of the largest fashion brand as well the Bangladesh is
now adopting the massive public pressure in order to improve the lack of regulation that has
paved the way for the entire loss of life in the Rana Plaza (Mani, Agrawal & Sharma, 2014).
Moreover, child workers in India have been found that workers in Indian factory were
working closely to the slavery for producing clothes. Besides this, the Christmas market was
also improperly subcontracted to the sweatshop using child labour (McDougall, 2007). In an
investigation, it is also seen that Indian factories have breached the ethical code. In the Delhi
city of India, children were founded to work in large retailing stores for the production of
garment. As per the estimation, around more than 20 per cent of the Indian economy depends

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on the children for their production . It is also observed that children in the sweatshops were
founded to working on piles. Despite of this, various labour activists has also stated that the
unions in factories are supposed to work independent. The owners of factory establish them
in order to control their workers as well as preventing them from joining any type of union
(Panigrahi, 2013).
In the limelight of above discussion, it can be concluded that multinational enterprises in
recent time are violating the several laws that are made for welfare of workers. Moreover,
they are also forcing workers to work for extra hours even without making payment.
Therefore, it is essential to make the strict rules and laws in order to protect the rights
workers. The garment factories are also threatening their workers by penalties and verbal
abuse to work for more hours. Government should ensure the timely review of the workers
right in factories.

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