Some of the biggest Western clothing retailers embraced a plan that would require them to help pay for factory improvements in Bangladesh as the nearly three-week search for victims of the worst garment-industry disaster in history ended Monday with the death toll at 1,127.

Bangladesh's government also agreed to allow garment workers to form unions without permission from factory owners. That decision came a day after it announced a plan to raise the minimum wage in the industry.

The collapse of the eight-storey Rana Plaza factory building April 24 focused worldwide attention on hazardous conditions in Bangladesh's garment industry, where workers sew low-cost clothing that ends up on store shelves around the globe, including the U.S. and Western Europe.

It came months after a fire at another garment factory in Bangladesh in November killed 112 workers.

Swedish retailing giant H&M, the largest purchaser of garments from Bangladesh; Britain's Primark Stores and Tesco; C&A of the Netherlands; and Spain-based multinational Inditex, owner of the Zara chain, said they would sign a contract that requires them to conduct independent safety inspections, make reports on factory conditions public and cover the costs of fire and building safety repairs and improvements.

It also requires them to stop doing business with any factory that refuses to make necessary safety improvements.

Two other companies agreed to sign last year: PVH, which makes clothes under the Calvin Klein, Tommy Hilfiger and Izod labels, and German retailer Tchibo. Others have refused to sign, complaining that the plan would be legally binding and costly.

A 'pragmatic step' for retailers: H&M

"This agreement is exactly what is needed to finally bring an end to the epidemic of fire and building disasters that have taken so many lives in the garment industry in Bangladesh," said Scott Nova, executive director of the Worker Rights Consortium, a worker rights group that had been one of the organizations pushing for the agreement.

H&M said the agreement is a "pragmatic step," and urged more brands to reach a pact that covers the entire industry of 5,000 garment factories in Bangladesh.

"Our strong presence in Bangladesh gives us the opportunity to contribute to the improvement of the lives of hundreds of thousands of people and contribute to the community's development," H&M spokeswoman Helena Hermersson said. "We can slowly but surely contribute to lasting changes."

Primark is one of the few retailers that have acknowledged that their clothes were being made in the Rana Plaza building at the time of the collapse. The building housed five clothing factories.

Minimum wages among lowest in world

Mohammed Amir Hossain Mazumder, deputy director of fire service and civil defence, said the search for bodies at Rana Plaza was called off Monday evening. The last body was found on Sunday night.

The Rana Plaza owner and eight other people, including garment factory owners, have been detained in the investigation. Authorities say the building owner added floors to the structure illegally and allowed the factories to install heavy equipment that the building was not designed to support.

Working conditions in the $20-billion US industry are grim, a result of government corruption, desperation for jobs, and industry indifference. Minimum wages for garment workers are among the lowest in the world at 3,000 takas ($38 US) a month.

Bangladesh's cabinet approved an amendment to the 2006 Labour Act on Monday lifting restrictions on forming unions in most industries, government spokesman Mosharraf Hossain Bhuiyan said. The old law required workers to obtain permission before they could unionize.

"No such permission from owners is now needed," Bhuiyan told reporters after the Cabinet meeting presided over by Prime Minister Sheikh Hasina. "The government is doing it for the welfare of the workers."

Union organizers harassed

Union leaders responded cautiously.

"The issue is not really about making a new law or amending the old one," said Kalpana Akter of the Bangladesh Centre for Workers Solidarity, a group campaigning for garment workers' rights. "In the past, whenever workers tried to form associations, they were subjected to beatings and harassment. The owners did not hesitate to fire such workers."

Bangladesh's government has in recent years cracked down on unions attempting to organize garment workers. In 2010 Hasina's government launched an Industrial Police force to crush street protests by thousands of workers demanding better pay and working conditions.

On Monday, nearly 100 garment factories shut down in the Ashulia industrial area near Dhaka after protests erupted over the death of a worker, Parul Akter, 22, whose body was found Friday inside a garment factory. A local police official, Badrul Alam, said she committed suicide.

Thousands of workers took to the streets and vandalized vehicles and shops before police used sticks to disperse the protesters. Several people were injured, said a police official who spoke on condition of anonymity because he was not authorized to speak publicly.

Wage board to oversee pay raises

Bangladesh has 3.6 million garment workers. It is the third-biggest exporter of clothes in the world, after China and Italy.

On Sunday, the Bangladesh government set up a new minimum wage board that will issue recommendations for pay raises within three months. The Cabinet will then decide whether to accept those proposals.

The wage board will include representatives of factory owners, workers and the government.

Government officials also have promised improvements in safety.

Since 2005, at least 1,800 garment workers have been killed in factory fires and building collapses in Bangladesh, according to the advocacy group International Labor Rights Forum.

In the blaze last November in Dhaka, the factory lacked emergency exits, and its owner said only three floors of the eight-story building were legally built.