DHAKA, Bangladesh—Bangladesh said its garment workers would be allowed to form unions without seeking permission from factory owners, a decision welcomed by rights groups as a change that could save lives—if backed up by rigorous enforcement.

Bangladeshi soldiers Monday stood at the site where a garment-factory building collapsed on April 24 in Savar, near Dhaka. Nearly three weeks after the building collapsed, the search for the dead ended Monday. Associated Press

The collapse on April 24 of the eight-story Rana Plaza—which killed at least 1,127 people, making it one of the world's worst industrial accidents— has put pressure on Prime Minister Sheikh Hasina's government to address concerns about working conditions.



Ms. Hasina's administration said on Sunday that it planned to soon raise the minimum wage in the sector from $38 per month, currently a quarter of China's minimum wage. It closed 18 garment factories for safety violations last week, including three belonging to the country's top garment manufacturer, and is planning broad inspections of other facilities in a country with some 5,000 garment factories.

The latest move could make it easier for garment workers to unionize, something some labor groups welcomed, saying such empowerment of workers could have helped stop the Rana Plaza disaster.

Employees said managers from the five garment factories in the building threatened to dock their pay if they didn't go back to work, despite safety fears after a crack emerged on the outside of the building.

Industrial Disasters in Asia


Those workers, if unionized, could have refused to comply, activists say.

"With collective-bargaining power, tragedies like Rana Plaza would not happen, since owners would not be able to force workers to work in unsafe conditions," said Amirul Haque Amin, president of Bangladesh's National Garment Workers Federation.

Ms. Hasina's cabinet amended the country's 2006 labor law by scrapping a provision that allowed factory owners to veto the participation of individual workers in a union.

"This law will fundamentally change our garment industry," said Bangladesh Labor Secretary Mikail Shiper.

But some rights groups pointed to similar promises in the past that remained unfulfilled. Large numbers of deaths in a factory fire in 2010 and in November 2012 were met by pledges to tighten safety, but accidents have continued—not due to poor safety regulations, but lax enforcement by authorities, workers groups said.

Phil Robertson, Bangkok-based deputy director of Human Rights Watch's Asia division, was skeptical about the union news. Bangladesh has long talked about improving worker rights, he said, but even with unions, workers will likely still have little leverage in securing better conditions.

"The issue is that even if you have a legal right to form a union, the question is, what is being done to protect that right once you try 'operationalize' it—when you try to organize a meeting or pass out pamphlets or become known as a union activist?"

Without strict rule of law in Bangladesh, factory owners will be able to fire workers for such labor activities, he added.


The amendment, which needs to be ratified by Parliament, also calls for the formation of a workers' welfare fund into which owners of export-oriented Bangladeshi companies will be ordered to contribute.

"The workers will be able to form unions in the factories without prior approval of the owners. They will also get group insurance and will get their wages through bank accounts under the new law," cabinet Secretary Mohammad Mosharraf Hossain Bhuiyan said on Monday.

One worker said that she was hopeful unions would help fight for better wages and set strict limits on overtime. Laborers often are forced to work longer than 12-hour days when meeting large orders.

"Sometimes supervisors cheat us over wages," said Sakina Begum, a seamstress in the Mirpur suburb of Dhaka. "If we can speak with one voice, they won't find that easy."

Bangladesh restricted the activities of unions after a series of strikes in the nation's ports in the 2000s that brought business to a standstill.

In the past, unions have functioned as tools for Bangladesh's main political parties, bringing workers into the streets for mass protests. "The unions can't be allowed to become affiliates of the political parties," said Mannan Kochi, senior vice president of the Bangladesh Garment Manufacturers and Exporters Association.

In other Asian countries with strong garment export sectors, such as China and Vietnam, the government chooses the top leadership of state-sanctioned trade unions.

Cambodia, another large clothing producer, changed its labor laws in 1997 to reduce restrictions on unionization. It also participated in a program that allowed inspectors from the United Nations' International Labor Organization into factories.

After the Rana Plaza collapse, the ILO and Bangladesh's government, workers and employers agreed to a road map for labor reform, which included the right to collective bargaining.

Hennes & Mauritz AB, which sources more clothing from Bangladesh than any other company, welcomed the new unionization rights announced on Monday.

"The fact that the Bangladesh government now will allow garment factory workers to freely unionize is only positive, and we welcome the decision," the company said in a statement, adding that the right to collective bargaining is part of its code of conduct.

H&M said potential increased costs from labor reforms—such as an increased minimum wage—wouldn't dissuade it from manufacturing in Bangladesh.


Write to Syed Zain Al-Mahmood at zain.syed@dowjones.com and Tripti Lahiri at tripti.lahiri@wsj.com