Police in Bangladesh are investigating the murder of a prominent trade union leader who was fatally beaten while trying to settle a dispute between a garment factory owner and workers over unpaid wages.

Shahidul Islam, 45, a top labour organiser for the Bangladesh Garment and Industrial Workers Federation (BGIWF), was attacked on Sunday evening in Gazipur, a major garment industry hub on the outskirts of Dhaka, after intervening on behalf of workers who had gathered to demand back pay.

Ahmed Sharif, 35, a union organiser who was also wounded in the attack, told the Guardian he and Islam had visited the Prince Jacquard Sweater factory several times in the run-up to the attack because workers had been demanding unpaid salaries and wanted to be paid before Eid.

After the intervention of Islam and other labour leaders, the factory authorities reportedly promised the workers their wages would be paid on Sunday. However, when this didn’t happen, Islam was called in to help.

Labour rights activists gather in Dhaka to protest over the death of the union organiser Shahidul Islam on Tuesday. Photograph: Redwan Ahmed

Islam and a group of fellow union leaders from other organisations reportedly entered the factory but could not find anyone from management to speak to.

Moments before the deadly assault at about 8pm, Islam addressed the crowd of workers and fellow activists, appealing to them to remain calm and said they would be taking their complaint to the Department Of Factory Inspection and Establishment the next day.

“We calmed the workers down and headed to the exit,” Sharif said. “As soon as we came out of the gate, a group of assailants grabbed Islam and separated him from us. They started cursing and randomly beating us, particularly Islam, some of them were kicking him mercilessly,” he added.

Sharif said by the time he and others were able to free him from the attackers, Islam was seriously injured and became unconscious. He was taken to hospital where he was pronounced dead, according to Sharif.

According to the US-based workers’ rights organisation, Solidarity Center, which condemned the murder, Islam was a trade union organiser for 25 years, and was president of the BGIWF’s Gazipur district committee. Over his career he assisted “thousands of workers to receive arrears and severance pay wrongfully denied by their employers”.

Kalpona Akter, the president of the BGIWF, said that Islam had been a target in the past of threats and assaults due to his work.

Dolly Akhtar, a trade union activist, said she believes Islam’s killing was intended to scare other activists from unionising and speaking up on behalf of workers in the apparel industry.

“We will not rest until the perpetrators are bought to justice. We have been on the streets before, now we lost one of our own, we will show them our power of unity,” Akhtar said.

Police confirmed that one suspect is in custody. “We have taken the case very seriously and every effort will be made to bring the culprits to justice,” said Shah Alam of Gazipur police. “We are awaiting the postmortem report. Once that arrives, we’ll have more evidence.”

An emotional protest by colleagues in honour of the murdered trade union activist on Tuesday. Photograph: Redwan Ahmed

Mustofa Kamal, a 22-year-old activist who was with Islam at the factory and was attacked when he tried to intervene in the assault, said: “Shahidul Islam was a stalwart labour rights activist who, like many other union organisers in Bangladesh, facing numerous threats to his life, always stood up for garment workers who couldn’t speak up for themselves.”

Hundreds of workers and union activists took to the streets of Gazipur at midnight on Sunday after the news of Islam’s death spread. Human rights and workers’ rights organisations in Bangladesh have condemned the murder and called for a thorough investigation.

The factory was approached for comment but did not respond.

Redwan Ahmed in Bangladesh