Bangladesh Labour Law & Employment Regulations

Bangladesh is an emerging economy country with one of the fastest growing economies globally. Bangladesh’s economy is placed 41st worldwide in terms of nominal Gross Domestic Product (GDP) and is set to climb higher as the country progresses in their economic journey. The agriculture, services, and industry sectors are Bangladesh’s largest industries. Agriculture accounts for 13.1% of the country’s GDP, while the industry and services sectors contribute 27.8% and 53.5%, respectively, to the country’s GDP.

Bangladesh Overview

  • Size: 148,460 square kilometers.Population: Approximately 174.3 million (2021 census). This number is expected to rise as more recent data becomes available.GDP (2023):
    • Nominal GDP: $431 billion.
    • GDP (PPP): Estimated at $930 billion.
    • Growth: 5.8% in FY 2023, down slightly from previous years due to global challenges.

    Per Capita Income (2023):

    • Nominal: $2,528.
    • PPP: Approximately $5,000.

    Industries:

    • Key sectors remain textiles and garments (a global leader in green manufacturing), pharmaceuticals (which meets 98% of domestic demand), shipbuilding, and IT. The garment industry, in particular, has gained significant recognition for its sustainability efforts, with Bangladesh housing the largest number of green garment factories worldwide.

    Economy:

    • The economy continues to experience rapid growth, but faces challenges such as high inflation (7.7% in 2022), a rising external debt ($110 billion as of 2024), and concerns over non-performing loans in the banking sector. The government is actively engaged in infrastructure development and export-oriented industrialization to drive future growth.

    Natural Resources: Fertile land and natural gas remain key resources, but the country is vulnerable to natural disasters such as floods and cyclones.

 

 

A Comprehensive Guide to Bangladesh Labour Law & Employment Regulations: Updates, Legal References, and Case Laws

  1. Introduction to Bangladesh Labour Law

Bangladesh’s labour law framework is primarily governed by the Bangladesh Labour Act, 2006 (BLA 2006), which consolidates and amends previous labour laws to address various aspects of employment, industrial relations, and worker welfare. This foundational legislation is supplemented by the Bangladesh Labour Rules, 2015, and further updated through subsequent amendments and specific regulations for particular economic zones. The legal landscape is dynamic, with ongoing efforts to align national laws with international labour standards and respond to evolving socio-economic conditions.

The Ministry of Labour and Employment (MoLE) serves as the central government ministry responsible for overseeing employment, safeguarding worker interests, and fostering human resource development. Its broad mandate includes poverty reduction, job creation, skill development through Technical Training Centers (TTCS), enhancing factory productivity, ensuring worker welfare, implementing labour laws, fixing minimum wages, and facilitating justice through Labour Courts. Complementing MoLE’s role is the Department of Inspection for Factories and Establishments (DIFE), the key enforcement agency tasked with ensuring worker welfare, safety, and health by enforcing the BLA 2006. DIFE also provides guidance to employers and workers on compliance and collaborates with international organizations like the ILO to enhance occupational safety and health.

  1. Key Legislation and Recent Amendments

The regulatory framework is continuously updated to address contemporary challenges and international commitments.

2.1. The Bangladesh Labour Act, 2006 (BLA 2006)

The BLA 2006 serves as the primary legislation, encompassing a wide range of provisions concerning worker employment, employer-employee relations, wage determination, compensation for injuries, trade union formation, industrial dispute resolution, and occupational health, safety, and welfare. The Act defines various key terms essential for its application, such as “worker” (including those on daily, monthly, or yearly contracts), “gratuity” (30 days’ wages for less than 10 years of service, 45 days’ for over 10 years), and “subsistence allowance” (half of basic wages, dearness allowance, and ad-hoc/interim wages).

Certain establishments and workers are excluded from the general application of the BLA 2006, including government offices, security printing presses, ordnance factories, non-profit institutions for the sick or destitute, and specific retail shops or religious fairs. This highlights a segmented approach to labour regulation within the country.

2.2. Bangladesh Labour Rules, 2015 (BLR 2015) and 2022 Amendments

The Bangladesh Labour Rules, 2015, enacted under Section 351 of the BLA 2006, provide detailed regulations for implementing the Act’s provisions. These rules cover comprehensive aspects from employment conditions to dispute resolution.

A significant update came with the Bangladesh Labour (Amendment) Rules, 2022 (SRO No. 284-Law/2022), effective from August 25, 2022, which modified 99 rules and eliminated two. Key changes introduced by these amendments include:

  • Protection of Women at the Workplace: Enhanced rules for women’s protection, including the introduction of miscarriage leave and mandatory safety requirements in factories. Employers are now required to establish a complaint committee with a majority of women members to address harassment issues. For female workers assigned to night shifts (between 10 PM and 6 AM), employers must ensure necessary transport with security, reflecting a targeted effort to improve safety and working conditions for women.
  • Mandatory Yearly Increment: The 2022 Amendments impose a requirement for a mandatory yearly increment in wages, which cannot be less than 5% of the basic wages. This provision is notable because the primary legislation, BLA 2006, does not contain an express statutory provision stipulating such mandatory yearly increments, which has raised questions about the rule’s lawful authority. This regulatory move places pressure on employers to increase employee costs irrespective of performance metrics or global economic slowdowns.
  • Basic Wages as a Minimum Percentage of Total Wages: Under the amended rules, basic wages of workers cannot be less than 50% of the total wages in cases where the Government has not fixed a separate minimum wage. This adjustment can significantly alter the compensation structure for many businesses, compelling them to increase basic wages even if their existing pay structures favored higher benefits and allowances.
  • Dispute Resolution and Training: The amendments streamline conflict resolution by requiring petitions regarding dishonest labour conduct to be submitted to the Director General or an authorized officer within 55 days, with a decision expected within another 55 days. This indicates an aim for faster dispute resolution. Furthermore, the amendments mandate relevant law training to strengthen industrial relations, with government-established or -authorized Industrial Relations Institutes conducting courses for both employers and employees.

2.3. Bangladesh EPZ Labour Act, 2019 and EPZ Labour Rules, 2022

Export Processing Zones (EPZs) operate under a distinct legal framework, reflecting a bifurcated system from the general labour law. The Bangladesh EPZ Labour Act, 2019 (Act No. II of 2019), and the subsequent Bangladesh EPZ Labour Rules, 2022 (SRO No. 295-Law/2022, dated September 21, 2022), govern employment relations within these zones.

The EPZ framework aims to ensure worker rights and a congenial working atmosphere, which the Law Minister has publicly stated is functioning properly. Key provisions under the EPZ labour laws include:

  • Workers Welfare Associations (WWAs): These associations are the primary mechanism for worker representation and collective bargaining within EPZs, as traditional trade unions are generally prohibited in these zones.
  • Minimum Wages in EPZs: The EPZ Minimum Wage Board issues recommendations for minimum wage rates, which are then declared by the EPZ Authority. The wage structure in EPZs includes basic wages, house rent (50% of basic), and a fixed medical allowance (e.g., Tk 2,375). Food/meal allowance and transport/traveling allowance are provided in addition to gross wages.
  • Annual Wage Increment (EPZ): Unlike the general Labour Rules’ mandatory 5% increment, the EPZ framework stipulates that the rate of annual wage increase for workers is determined based on the evaluation of overall work, with a minimum of 10% of basic wages for at least 50% of workers. This introduces a performance-linked aspect to increments.
  • Compulsory Group Insurance: Enterprises in EPZs employing at least 25 permanent workers are required to introduce group insurance, with claims settled within 120 days. This threshold is lower than the proposed 100 workers for general establishments under the BLA 2006 amendments.

2.4. Proposed Amendments to Bangladesh Labour Act, 2006 (BLA 2006)

The BLA 2006 is also undergoing a significant amendment process, with 76 articles proposed for modification and 7 new articles to be included. This reform initiative, driven by the ILO roadmap and aiming for completion by 2026, seeks to enhance worker welfare, rights, safety, industrial expansion, and transparency in trade union registration and wage payment.

Key proposed changes include:

  • Employment through Outsourcing Companies: New provisions are being considered for regulating employment through outsourcing.
  • Gratuity: The proposed gratuity rates are 30 days’ basic salary for each completed year of service for workers with up to 12 years of service, and 45 days’ basic salary for those with more than 12 years.
  • Welfare Board and Fund: The Ready-Made Garment (RMG) sector may be exempted from the existing 5% profit-sharing obligation (Chapter XV of the Act). Instead, a new provision for creating a welfare fund for RMG workers is proposed. This represents a policy shift for a critical sector.
  • Worker Safety: Factory owners would be mandated to ensure worker safety by providing personal protective equipment, secured power systems, unlocked exit paths, and clear staircases. A new provision aims for consistency between building structural design and factory layout. Factories must also inform workers of work risks to ensure occupational health and safety.
  • Safety Committees and Group Insurance: Safety Committees would be mandatory in factories with more than 50 workers, and security staff would require fire safety training. Group insurance is proposed for factories employing a minimum of 100 workers, with insurance money to be paid within 90 days of claiming.
  • Dismissal for Misconduct: Proposed amendments may expand the grounds for dismissal without compensation to include riotous or disorderly behaviour, arson, vandalism, or preventing others from working.

The timeline for reviewing the EPZ Labour Act, which often mirrors the general Labour Act’s reforms, indicates legislative steps through late 2024 and early 2025, with final approval and gazette notification expected by May-June 2025. This continuous legislative activity underscores the need for businesses to remain vigilant for upcoming changes.

  1. Employment Regulations

Bangladesh labour law covers various aspects of employment, from contract types to working conditions.

3.1. Types of Employment Contracts

The BLA 2006 classifies anyone working in any industry or establishment, whether in a technical, manual, skilled, or unskilled capacity, as an “employee,” regardless of whether their employment terms are written. Employment contracts in Bangladesh typically fall into several categories:

  • Permanent Employment: Workers who complete a probation period (usually six to nine months) are confirmed as permanent employees and are entitled to admissible benefits. Permanent employment is generally open-ended and offers protection against wrongful termination, requiring valid reasons for dismissal.
  • Probationer: An employee in a probationary status for a permanent post.
  • Apprentice: A trainee who receives allowances. Apprenticeship periods are typically 3 months in EPZs.
  • Temporary: Appointed for a limited period based on a project.
  • Substitute/Badli: A worker who replaces a permanent or probationer worker.
  • Fixed-Term & Project-Based Agreements: These are for specific durations or the completion of a project, common in construction or IT. Termination benefits are generally not required unless explicitly stated in the contract.
  • Part-Time & Contract-Based Employment: Part-time involves working fewer hours than the standard 48 per week. Contract-based roles often resemble fixed-term agreements or are for “independent contractors,” requiring clear distinction in the employment letter regarding statutory benefits.

Employment agreements must meet the minimum favourable conditions set out in the BLA 2006 and Bangladesh Labour Rules 2015, although employers are free to draft more favourable terms. Key clauses typically include job title, responsibilities, salary structure, benefits, working hours, leave, termination conditions, and confidentiality.

3.2. Working Hours and Overtime

Standard working hours in Bangladesh are generally 8 hours per day or 48 hours per week. For work exceeding 6 hours a day, a 1-hour break is mandated; for over 5 hours, a 30-minute break; and for over 8 hours, either a 1-hour break or two 30-minute breaks.

Overtime work is permitted, but total working hours (including overtime) cannot exceed 10 hours per day or 60 hours per week, with a yearly average of 56 hours per week. Overtime compensation is legally mandated at twice the ordinary rate of basic wage, dearness allowance, and any ad hoc or interim wage. For work performed on weekly holidays, the compensation rate is typically double the regular hourly wage.

Specific restrictions apply to female workers, who generally cannot be assigned tasks between 10 PM and 6 AM without their written consent.

3.3. Leave Entitlements

Workers in Bangladesh are entitled to various types of leave with full wages :

  • Casual Leave: 10 days per calendar year.
  • Sick Leave: 14 days per calendar year, requiring a medical certificate from a registered medical practitioner.
  • Annual Leave (Earned Leave): After completing one year of continuous service, workers are entitled to annual leave with wages based on days worked in the preceding 12 months. The accumulation rate varies by sector:
    • One day for every 18 days of work for shop, commercial, industrial, factory, or road transport workers.
    • One day for every 22 days of work for tea plantation workers.
    • One day for every 11 days of work for newspaper workers.

Unused annual leave can be accumulated and carried over to the following year, with limits of 40 days for factory or road transport workers and 60 days for tea plantation, shop, commercial, or industrial workers.Workers are entitled to receive wages in lieu of un-availed leave upon termination.

  • Festival Holidays: Every worker is entitled to at least 11 days of paid festival holidays in a calendar year. If a worker is required to work on a festival holiday, they must receive two days’ additional compensatory holidays with full pay and a substitute holiday.
  • Maternity Leave: Female workers are entitled to 16 weeks of paid maternity leave, typically taken 8 weeks before and 8 weeks after delivery. The calculation of maternity benefit is based on the average wages earned during the three months immediately preceding the notice of pregnancy. The 2022 Labour Rules also introduced 4 weeks of miscarriage leave without wage deduction, not to be adjusted with other leave.
  • Paternity Leave: Fathers are entitled to 5 days of paid paternity leave, which can be extended up to four weeks depending on internal policy.
  • Bereavement Leave: Employees get three days of unpaid leave for a death in the family.
  • Marriage Leave: Employees are entitled to 7 days of unpaid leave for their wedding or that of an immediate family member.

Leave applications generally require written submission, and employers must issue orders within seven days or two days prior to the leave commencement, or on the same day for urgent requests. Reasons for refusal must be provided.

Compensation for Death (Section 19)

If a worker dies while in service for at least more than 2 years continuously under an employer, the employer shall pay 30 days’ wages as compensation. In the case of death while working in the establishment or following an accident while working in the establishment, the employer is to pay 45 days’ wages for every completed year of service, or any part thereof exceeding 6 months or gratuity, whichever is higher, to the nominee of the deceased worker. In the absence of the nominee, compensation is to be paid to a dependent. The compensation shall be in addition to the retirement benefit to which the deceased worker would have been entitled had he retired from service.

3.4. Wages and Benefits

Wages must be paid monthly, preferably on the last working day, and no later than the seventh working day after the wage period ends. Payments can be made in legal tender or through digital means. The “wages” definition includes all economic benefits like salary, bonuses, overtime remuneration, and holiday pay.

Minimum Wages: Bangladesh operates a sector-specific minimum wage system, determined by the National Minimum Wage Board, established in 1959, based on recommendations from the Wages Board. The Board considers factors such as cost of living, standard of living, production cost, productivity, product price, business capability, inflation, and socio-economic conditions. Minimum wage rates for specific industries are re-fixed approximately every five years, though this long delay can lead to significant tension and erosion of workers’ real income due to inflation.

  • Ready-Made Garment (RMG) Sector: The minimum monthly wage for RMG workers was finalized at Tk 12,500 (approximately US$113.6), effective December 1, 2023. This amount, while a 56.25% increase from the previous Tk 8,000 (set in 2018), was significantly lower than the Tk 20,390-25,000 demanded by protesting workers and unions, who argued for a “living wage” based on cost of living studies. The new RMG wage structure includes a 5% yearly increment on the basic pay of workers, a new feature aimed at addressing inflation.
  • Textile Sector: The minimum monthly wage for cotton textile sector workers was set at Tk 10,000 (approximately US$90) by a gazette notification dated February 27, 2024. This represents a 75% increase from the Tk 5,710 set in 2018 but falls short of the RMG minimum wage and worker demands, leading to dissatisfaction. The textile wage structure also includes graded wages based on location (divisional cities, district cities, upazilas).

Table 1: Key Minimum Wage Rates by Sector (as of 2023-2025)

Sector Minimum Monthly Wage (BDT) Effective Date Source Notes
Ready-Made Garment (RMG) 12,500 Dec 1, 2023   Includes 5% annual increment on basic pay.
Cotton Textile 10,000 Feb 27, 2024   Graded by location; lower than RMG.
General (Major Industries) 8,800 Nov 7, 2023   General minimum wage for major industries.
General (Other Sectors) 8,000 Nov 7, 2023   General minimum wage for other sectors.
EPZ (Lowest Grade, e.g., Grade 10 Upazila) 10,001 Dec 7, 2023   Total wages include basic, 50% house rent, fixed medical allowance (Tk 2,375). Additional food/transport allowances. Annual increment of min 10% of basic for at least 50% of workers based on evaluation.

Note: The general minimum wage figures (BDT 8,000/8,800) are noted as effective November 7, 2023, while the RMG and Textile specific wages are higher and have more recent gazette dates. This illustrates the sector-specific nature of wage setting.

Other Benefits:

  • Festival Bonuses: Employees with at least one year of continuous service are entitled to two festival bonuses annually, each not exceeding their monthly basic salary.
  • Workers’ Profit Participation Fund (WPPF) and Welfare Fund: Employers meeting certain requirements are obligated to share 5% of their profits with employees by establishing and contributing to these funds, as regulated under Chapter XV of the Labour Act and Rules. Companies like Beximco Pharma consistently comply with this requirement. However, as noted, the RMG sector may be exempted from this profit-sharing in favour of a new welfare fund under proposed BLA 2006 amendments.
  • Social Security Contributions: There are generally no mandatory social security contributions for employers and employees in Bangladesh unless the employer has constituted a provident fund.
    • Provident Fund: An establishment in the private sector is required to constitute a provident fund if at least three-fourths of its workers demand it in writing. Employees (including foreign nationals) contribute 7-8% of their salary, with the employer making a matching contribution.
    • Universal Pension Scheme (UPS): A landmark initiative launched in 2024, the UPS aims to provide pension coverage to all citizens over 18, including private sector employees, informal sector workers, low-income individuals, and expatriates. Subscribers contribute until age 60 (or 10 years if over 50) to receive a lifelong pension. Contributions are eligible for tax concessions, and monthly pensions are tax-free. The government provides grants for low-income participants, demonstrating a significant expansion of social protection. This scheme addresses a previous gap in comprehensive social security coverage for a large segment of the workforce.
  1. Occupational Safety and Health (OSH)

The BLA 2006 and BLR 2015 contain extensive provisions for ensuring occupational safety and health. Employers are mandated to provide a safe working environment, implement safety measures, and ensure employees receive proper training and equipment. Workers also have the right to refuse unsafe work.

Key OSH requirements include:

  • Cleanliness and Hygiene: Detailed rules for garbage removal, room washing, drainage, whitewashing, and maintaining cleanliness registers.
  • Ventilation and Temperature: Workrooms must have tolerable temperatures and adequate ventilation.
  • Dust and Fumes: Effective exhaust appliances and masks are required in workplaces with dust and fumes.
  • Potable Water and Sanitation: Pure drinking water in hygienic conditions, and adherence to specified standards for the number, location, and cleanliness of toilets and washrooms.
  • Fire Safety: Factories must have at least two exits for rooms with over 20 persons, with specific dimensions and fire-resistant materials for staircases. Fire prevention equipment and mock drills are mandatory, and workers must receive training on fire extinguishing and rescue.
  • Machinery Safety: Strict regulations for the fencing of machinery, safe maintenance of electric supply lines, and detailed examination and certification requirements for lifting machinery, cranes, hoists, and pressure plants.
  • Personal Safety Materials: Employers must provide adequate safety materials (e.g., shoes, helmets, goggles, masks, gloves) and training on their use for workers in risky production processes.
  • Dangerous Operations: A comprehensive list of dangerous operations (e.g., aerated water production, electroplating, stone crushing) is provided, requiring mandatory health check-ups for workers involved.
  • Accident Reporting: Immediate notice (via telephone, fax, email, or special messenger) must be sent to relevant authorities (Inspector General, Deputy Commissioner, Fire Service, hospital, Industrial Police) for fatal or serious accidents, and the accident site must be preserved until inspection. A register for all accidents and dangerous occurrences must be maintained.
  • Safety Committees: Factories and industrial establishments with 50 or more workers are required to constitute a Safety Committee with equal representation from employers and workers.
  • RMG Sustainability Council (RSC): In the garment industry, the RSC is an independent body responsible for critical safety measures, including inspections, training, and complaint mechanisms, reflecting a sector-specific response to past industrial accidents.
  1. Trade Unions and Industrial Relations

The BLA 2006 and its associated rules provide a framework for trade unions and the resolution of industrial disputes, though significant limitations on freedom of association and collective bargaining have been noted by international bodies.

5.1. Trade Union Formation and Restrictions

Workers and employers generally have the right to form trade unions for regulating relations. However, several restrictions apply:

  • Establishment-Level Formation: Unions can typically only be formed at the factory or establishment level, with limited exceptions for certain sectors like road transport or tea plantations where geographical area-based unions are allowed.
  • Maximum Number of Unions: Not more than three trade unions can be registered in any establishment.
  • Minimum Membership Threshold: A trade union of workers is not entitled to registration unless it has a minimum membership of 30% of the total workers employed in the establishment. This high threshold has been a point of concern for international observers, who allege it complicates the registration process.
  • Eligibility for Union Office: Candidates for union office must generally be permanent workers employed in the concerned establishment. Loss of employment also results in the end of union membership, even if the termination is contested, which can significantly weaken union continuity and leadership.
  • Government Workers: Government workers are generally prohibited from belonging to trade unions, with specific exceptions for sectors like railway, postal, and telecommunications.
  • EPZs: Trade unions are prohibited within EPZs, where Workers Welfare Associations (WWAs) are the designated bodies for associational and bargaining rights.
  • Federations: The 2013 amendment to the Labour Act increased the requirement for forming a federation from two to five constituent unions, which must be from more than one administrative division, potentially hindering broader union organization.

Concerns have been raised by the US and EU regarding the complexity and alleged employer influence in the trade union registration process, with the Labour Secretary acknowledging these “huge concerns.” Efforts are underway to fully digitize the registration process to improve transparency and reduce complaints.

5.2. Collective Bargaining

Collective Bargaining Agreements (CBAs) are legally enforceable contracts between management and employees, typically facilitated by trade unions. These agreements are emerging as an alternative form of dispute resolution, particularly in the apparel sector, where over 51 CBAs have been signed since 2013. CBAs often result in increased benefits such as attendance bonuses, festival and medical leave, and allowances. They can also address specific worker needs not fully covered by law, such as financial contributions for sonograms to ensure maternity leave eligibility.

Despite the benefits, challenges persist, including false accusations against unions and illegal termination of union leaders.Trade unions and CBAs are legally required to refrain from interfering in administrative acts, employment, transfer, or promotion decisions within establishments. The Director of Labour also retains significant power over the registration and amendment of union constitutions, and the Inspector General has discretion over the “reasonableness” of service rule proposals, which can impact collective bargaining outcomes.

5.3. Dispute Resolution Mechanisms

The BLA 2006 outlines an elaborate framework for settling industrial disputes, emphasizing Alternative Dispute Resolution (ADR) before formal litigation.

  • Negotiation: Disputes typically begin with a written request for negotiation from the employee or collective bargaining agent to the management. If a settlement is reached, a memorandum is signed and forwarded to the government, the Director of Labour, and the Conciliator.
  • Conciliation: If negotiations fail or a meeting is not arranged within one month, the dispute proceeds to conciliation, involving a government-appointed conciliator. The conciliator facilitates meetings and aims for a consensual agreement, making recommendations rather than forcing a settlement. Conciliation must be completed before any industrial action can be taken.
  • Arbitration: If conciliation fails, parties may submit the dispute to an arbitrator, either from a government panel or a mutually agreed person. The arbitrator’s award is final and valid for up to two years.
  • Labour Courts: Specialized Labour Courts, established under the BLA 2006, have exclusive jurisdiction over labour matters, including unfair dismissals, wage disputes, compensation for workplace injuries, and breaches of labour laws. Cases are initiated by filing a written complaint, followed by notification to the opposing party. Mediation is encouraged before formal hearings. If mediation fails, the case proceeds to trial with presentation of evidence and arguments.
  • Labour Appellate Tribunal: Appeals against Labour Court verdicts are heard by the Labour Appellate Tribunal, a specialized court mandated to dispose of cases within 180 days. Decisions from the Tribunal can be further appealed to the High Court Division. As of April 2024, a significant backlog of 23,571 pending cases existed with the Labour Courts and the Labour Appellate Tribunal, indicating challenges in the efficiency and capacity of the labour justice system.
  • High Court Division (Writ Petitions): Parties may approach the High Court Division through writ petitions to challenge the jurisdiction or decisions of Labour Courts or Tribunals. Landmark cases have addressed issues such as the legality of dismissals and the authority of officials in personnel decisions, emphasizing due process.
  1. Enforcement, Compliance, and Penalties

Effective enforcement of labour laws is crucial for ensuring worker rights and maintaining industrial harmony.

6.1. Enforcement Bodies

The primary enforcement bodies are the Ministry of Labour and Employment (MoLE) and the Department of Inspection for Factories and Establishments (DIFE).

  • DIFE’s Role: DIFE is responsible for inspecting factories and establishments to ensure compliance with the BLA 2006, promoting safe and healthy work environments, and improving the quality of wage earners. It also provides information and advice to employers and workers on compliance. DIFE has been upgraded from a directorate to a department, increasing its manpower to 1156 personnel across a headquarters and 31 district offices, in an effort to strengthen enforcement capacity.
  • Inspector Powers: Labour inspectors have broad powers to enter and inspect premises, examine documents, seize records, make inquiries, obtain statements, and file complaints with the Labour Court. A significant change under BLA 2006 Section 313 allows any aggrieved person or trade union to directly lodge a complaint with the Labour Court, reducing reliance solely on inspectors.
  • Digital Initiatives: DIFE is implementing digital services such as the Labour Inspection Management Application (LIMA), online complaint submission, and online license applications, aiming to enhance efficiency and transparency in enforcement. A toll-free helpline (16357) is also available 24/7 for workers to lodge complaints.

6.2. Compliance Challenges and International Scrutiny

Despite legislative reforms and enforcement efforts, challenges in compliance persist. Academic studies and international bodies, including the EU and ILO, have noted that Bangladesh’s labour legislation often deviates from ILO labour policy, citing a lack of effective inspection mechanisms, inadequate penalties, and insufficient implementation. This creates a “compliance problem” where violations of workers’ rights, particularly in manufacturing industries, remain prevalent.

Key areas of concern highlighted by the EU and academic research include:

  • Freedom of Association and Collective Bargaining: Persistent restrictions on forming and registering trade unions, and limitations on collective bargaining rights, are seen as not fully aligned with international labour standards (ILO Conventions 87 and 98).
  • Penalties for Workers: Concerns exist that the BLA allows excessive penalties, including imprisonment, for workers engaging in collective action or exercising labour rights, and enforces unjustified restrictions on the right to strike.
  • Enforcement Deficiencies: The number of labour inspectors, despite recent increases, has historically been insufficient for the vast number of factories and establishments. There is a call for continued and intensified efforts in training law enforcement authorities on human rights and the proportionate use of force during strikes and protests.
  • Impunity for Violations: Lenient punishments and low compensation for labour law violations may allow perpetrators to act with impunity, especially those with high societal status, undermining worker entitlements.

6.3. Penalties for Non-Compliance

The BLA 2006 prescribes various penalties for labour law violations, ranging from fines to imprisonment. Examples include:

  • Non-compliance with Labour Court Orders: Imprisonment up to 3 months, or fine up to Tk 5,000, or both.
  • Payment Below Minimum Wage: Imprisonment up to 1 year, or fine up to Tk 5,000, or both.
  • Employment of Child or Adolescent in Contravention: Penalties apply.
  • Contravention of Employer Provisions (e.g., Chapter IV on OSH): Fine up to Tk 25,000.
  • Failure to Give Accident Notice (Serious Injury): Fine up to Tk 1,000; for loss of life, imprisonment.
  • Breach of Settlement, Award, or Decision: Imprisonment up to 1 year, or fine up to Tk 10,000, or both.
  • Illegal Strike or Lock-out: For workers, imprisonment up to 1 year, or fine up to Tk 5,000, or both. For employers initiating an illegal lock-out, similar penalties apply.
  • General Offences by Workers: Fine up to Tk 500.
  1. Relevant Case Laws

Bangladeshi courts, particularly the Labour Courts, Labour Appellate Tribunal, and the High Court Division of the Supreme Court, regularly adjudicate labour disputes, shaping the interpretation and application of labour laws.

7.1. Cases on Employment and Termination

  • Bangladesh Government vs. Md. Nazrul Islam Biswas (19 SCOB AD 119): This Supreme Court case emphasized the importance of due process in employment termination. The court upheld a tribunal’s decision that an acting official lacked the authority to dismiss a permanent employee without a formal inquiry and final authorization from a high-ranking official. This ruling reinforces that employment decisions with serious implications, such as compulsory retirement, must strictly follow due process, including adequate investigation and proper authorization.
  • P. W. V. Rowe Vs. Labour Court, Chittagong (1979) 31 DLR (AD) 119: This landmark case confirmed that absence without leave for more than ten days can be considered misconduct, allowing employers to dismiss or take disciplinary action against the worker.
  • Mashriqi Jute Mills Ltd. Vs. the Chairman, Second Labour Court, Dhaka and another: The High Court Division overruled a Labour Court’s decision, affirming that a dismissal order for misconduct, issued as a routine procedure with prior approval of the Managing Director, was valid.
  • Managing Director, Sonali Bank and 2 others Vs. Md. Jahangir Kabir Molla: The Appellate Division held that a simple termination order, without containing any charge or stigma, is valid even if departmental proceedings had been initiated and subsequently dropped. This indicates that employers may opt for simple termination (with notice and benefits) to avoid complex disciplinary actions.
  • Khulna Newsprint Mills Ltd. Vs. Chairman, First Labour Court and another: This case affirmed an employer’s freedom to use a simple termination order to avoid complex disciplinary action, provided the action is not taken to victimize a worker for trade union activities. This highlights a legal avenue for employers to manage workforce changes, while also underscoring the protection against anti-union discrimination.
  • Bangladesh Biman Corporation and others Vs. Md. Zahangir Farazi and others, 2012, 41 CLC (AD): This case resulted in workers being declared permanent in their respective posts, illustrating judicial intervention in affirming employment status.

7.2. Cases on Wages and Benefits

While specific Supreme Court or High Court judgments directly on minimum wage amounts are less common, the courts often review cases related to the application of wage rules and benefits.

  • Disputes concerning non-payment of provident fund, gratuity, and proper worker classification are frequently brought before Labour Courts and Tribunals. Law firms actively advise on compliance with amended labour laws regarding gratuity and provident fund policies.
  • The overall adequacy of minimum wages in Bangladesh, particularly in the RMG sector, remains a contentious issue, with unions and international organizations arguing that the set wages do not constitute a living wage given inflation and rising costs of living. This broader economic and social challenge often leads to protests, which can result in legal actions related to industrial unrest rather than direct wage disputes in higher courts.

7.3. Cases on Trade Union Rights and Industrial Disputes

  • Ekramul Hossain (Md.) and others Vs. Chairman, First Labour Court, Dhaka and others, 2013, 42 CLC (HCD): This High Court Division case dealt with matters related to trade unions and the powers invested in their operations.
  • Robi Axiata Ltd Vs. First Labour Court Dhaka and others, 2013, 42 CLC (HCD): This involved writ petitions concerning labour issues, indicating the High Court’s role in reviewing labour court decisions and jurisdictional challenges.
  • The legal framework for trade unions, including restrictions on formation and the conduct of industrial actions, has been subject to scrutiny. For instance, the government’s power to ban strikes under certain conditions (e.g., if continuing beyond 30 days, involving public services, or threatening national interest) is a significant aspect of industrial relations law. The use of police force against protesting workers, as observed during recent minimum wage protests, underscores the tensions between worker rights and state control.

 

Bangladesh’s labour law and employment regulations are characterized by a comprehensive, yet evolving, legal framework. The Bangladesh Labour Act, 2006, and the Bangladesh Labour Rules, 2015, form the bedrock, with significant amendments in 2022 introducing progressive changes such as enhanced protections for women, mandatory annual wage increments, and clearer basic wage structures. Concurrently, a distinct and equally comprehensive legal regime governs Export Processing Zones, reflecting a tailored approach to attract investment while addressing worker welfare.

The ongoing process of legislative reform, including proposed amendments to the BLA 2006 and the EPZ Labour Act, indicates a continuous effort to modernize and align with international standards, particularly those promoted by the ILO. The launch of the Universal Pension Scheme marks a landmark expansion of social security, addressing a critical gap in worker protection across various sectors.

However, the analysis also reveals persistent challenges. The significant gap between government-mandated minimum wages and the “living wage” demanded by workers, exacerbated by inflation and a five-year wage review cycle, continues to fuel industrial unrest. Furthermore, despite government commitments, international bodies and academic studies point to persistent shortcomings in aligning national laws with core ILO conventions, particularly concerning freedom of association, trade union registration, and collective bargaining. Restrictions on union formation, eligibility for leadership, and the criminalization of certain industrial actions remain contentious issues.

The effectiveness of these regulations is heavily reliant on robust enforcement. While the Department of Inspection for Factories and Establishments (DIFE) has seen structural upgrades and increased manpower, and digital initiatives are improving accessibility, concerns about the sufficiency of inspectors and the adequacy of penalties persist. The high number of pending cases in Labour Courts and the Labour Appellate Tribunal also highlights a strain on the judicial system’s capacity to deliver timely justice.

In essence, Bangladesh’s labour law landscape is a complex interplay of protective legislation, ongoing reforms, and practical implementation challenges. For businesses operating or considering operations in Bangladesh, a thorough understanding of this dynamic environment, including the nuances of general labour law versus EPZ regulations, the implications of recent amendments, and the broader socio-economic and political context of labour relations, is paramount for ensuring compliance and fostering sustainable industrial peace.

Analysis of Leave and Service Benefits under the Bangladesh Labour Act 2006 and Bangladesh Labour Rules 2015

In addressing the prevalent queries concerning “leave” and “service benefits,” this article provides a comprehensive analysis of the types of leave and other service benefits applicable under the Bangladesh Labour Act 2006 (BLA) and the Bangladesh Labour Rules 2015 (BLR). This discussion aims to elucidate the legal provisions governing these benefits to ensure compliance and understanding among employers and employees.

Types of Leave

Under the Bangladesh Labour Act 2006, employees are entitled to three primary types of leave: casual leave, sick leave, and annual leave. Each type of leave is governed by specific statutory provisions, which detail the entitlements and conditions under which these leaves may be availed.

  1. Casual Leave (Section 115 of BLA 2006):
    • Entitlement: Every worker is entitled to ten (10) days of casual leave with full wages each calendar year.
    • Non-accumulation: Casual leave is non-accumulative, meaning it cannot be carried forward to the subsequent year. The intent behind this provision is to ensure that employees utilize their casual leave within the specified year for personal emergencies or short-term needs without the possibility of stockpiling leave.
  2. Sick Leave (Section 116 of BLA 2006):
    • Entitlement: Workers, excluding those employed in the newspaper industry, are entitled to fourteen (14) days of sick leave with full wages each calendar year.
    • Non-accumulation: Similar to casual leave, sick leave is non-accumulative and must be utilized within the same year it is granted. This ensures that workers can take necessary time off for medical reasons without financial loss.
  3. Annual Leave (Section 117 of BLA 2006):
    • Entitlement: Adult workers who have completed one year of continuous service are entitled to annual leave. The duration of the leave is calculated based on the nature of the establishment, ranging from one day for every eleven (11) to twenty-two (22) days worked.
    • Accumulation and Carry Forward: Unused annual leave can be carried forward to the following year. However, the total accumulation is capped at sixty (60) days for some establishments and eighty (80) days for others. This provision ensures that workers have adequate rest periods while also preventing excessive accumulation of leave.
    • Leave Calculation: When an employee avails one day of leave, it is counted as one day irrespective of whether it falls on a Sunday or Thursday. Furthermore, any holidays occurring during the annual leave period are included in the leave count, ensuring a consistent application of leave entitlements.

Holidays

In addition to leave entitlements, the BLA 2006 mandates two types of holidays for workers: weekly holidays and festive holidays.

  1. Weekly Holidays (Section 103 of BLA 2006):
    • Entitlement: Every worker is entitled to one day off per week. This weekly holiday is essential for the well-being and productivity of workers, providing a regular rest period.
  2. Festive Holidays (Section 118 of BLA 2006):
    • Entitlement: Workers are allowed eleven (11) days of festive holidays with wages each calendar year. These holidays typically coincide with national and religious festivals, allowing workers to observe important cultural events.

Maternity Benefits

The BLA 2006 provides specific maternity benefits to female workers, ensuring adequate support during pregnancy and after childbirth.

  • Entitlement (Section 46 of BLA 2006): Female workers who have completed six months of service are entitled to sixteen (16) weeks of maternity leave. This leave is divided equally, with eight (8) weeks preceding the expected delivery date and eight (8) weeks immediately following the birth.
  • Payment: Maternity leave is granted with full wages, calculated based on the average daily earnings. This provision ensures that female workers do not face financial hardship during their maternity leave.
  • Limitation: This benefit is not applicable if the worker has two or more surviving children. This limitation aims to balance the provision of maternity benefits with practical considerations for employers.

Encashment of Un-availed Leave

The provisions for the encashment of un-availed leave ensure that workers are compensated for leave they could not take due to work commitments.

  • Entitlement: Workers can apply for encashment of up to fifty percent (50%) of their earned annual leave once a year. This provides a financial benefit to workers for unused leave.
  • Upon Termination: If an employee resigns, is retrenched, discharged, dismissed, terminated, or retires, they are entitled to receive wages in lieu of un-availed leave at their standard wage rate. This ensures fair compensation for the leave accrued but not taken.

Employers are required to make payments for un-availed leaves according to the defined wage rates. Deductions can be made in specific circumstances, such as fines imposed under Section 25, unauthorized leave, damage or loss of goods under the worker’s custody, and recovery of loans or advances. These provisions ensure that the employer can recover losses while providing fair compensation to the worker.

Other Service Benefits

In addition to leave entitlements, the BLA 2006 provides for other service benefits, including the provident fund, gratuity, and the Workers Participation Fund (WPF). These benefits aim to provide financial security and incentives to workers.

  1. Provident Fund:
    • Provision (Section 264 of BLA 2006): Private companies may establish a provident fund governed by the Provident Funds Act 1925. This is a directory provision, meaning it is recommended but not mandatory. Provident funds serve as long-term savings plans for workers, providing financial security upon retirement.
    • Exclusion from Wages: The definition of wages in Section 2(45) of BLA 2006 explicitly excludes the provident fund, indicating that contributions to the provident fund are separate from regular wages.
  2. Gratuity:
    • Entitlement (Section 2(10) of BLA 2006): Gratuity is payable to a worker upon termination of employment, provided the worker has completed the requisite tenure. In situations such as death, retrenchment, discharge, or termination, the worker is entitled to either gratuity or compensation, whichever is higher. This ensures that workers receive adequate financial support upon leaving the organization.
    • Requirement: Employers are obligated to establish a gratuity fund for their employees, ensuring that workers receive their due entitlements.
  3. Workers Participation Fund (WPF):
    • Applicability (Section 232 of BLA 2006): The WPF applies to companies meeting specific criteria, such as having a paid-up capital of at least ten (10) million taka or permanent assets valued at twenty (20) million taka on the last day of the accounting year. This fund allows workers to share in the profits of the company, promoting a sense of ownership and participation among employees.

Conclusion

The Bangladesh Labour Act 2006 and the Bangladesh Labour Rules 2015 provide comprehensive regulations governing leave entitlements and service benefits for workers. Employers must ensure compliance with these provisions to maintain lawful and equitable employment practices. This detailed analysis clarifies these rights and obligations, promoting a better understanding of the legal framework within which employees and employers operate. By adhering to these regulations, employers can foster a supportive and fair working environment, ensuring the well-being and satisfaction of their workforce.

 

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