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 sector 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.

  1. Bangladesh Labour Law
  • The Bangladesh Labor Act, 2006 (Amendment in 2013, 2015, 2018)
  • Bangladesh Labour Rules – Bangladesh Labor Rules, 2015

Bangladesh Overview

  • Size: 148,460 square kilometers​
  • Population: Approximately 174.3 million people (2021 census)​
  • GDP: $284.2 billion (nominal), $758 billion (PPP)​ (
  • Per Capita Income: $1,740 (nominal), $4,600 (PPP)​ (
  • Industries: Textiles and garments, shipbuilding, pharmaceuticals, IT​
  • Economy: Rapid growth with a 7.2% GDP growth rate (2021-2022), facing challenges like corruption and infrastructure deficits​
  • Natural Resources: Fertile land, natural gas; prone to floods and cyclones​

2. Employment Contract

Giving Letter of Appointment and Identity Card and Maintaining the Confidentiality (Rule 19)

  1. No owner can appoint a worker without an appointment letter.
  2. The appointment letter should mention the following information about the worker under Section 5, such as:
    • Name of worker
    • Father’s Name
    • Mother’s Name
    • Spouse Name (as applicable)
    • Address: Present & Permanent
    • Designation, type of work, date of joining
    • Class of worker
    • Wages or pay scale (wages or salary and the rate of the increase of annual salary, if any)
    • Other payable financial facilities (house rent, medical, education, food, conveyance, festival and attendance allowances and gratuity if any; and
    • It is to be mentioned hereby that all appointment conditions, and existing service rules (if any), will be complied with the existing labour act.
  3. Each owner will provide an identity card with the photograph to each worker working in the firm at the owner’s cost as per Form-6.
  4. Notwithstanding anything contained in these rules, any worker engaged in the factory or firm or any person with administrative and management responsibility will maintain the confidentiality of the business strategy of the firm in case of performing the duties or changing the job.

3. Minimum Wage

As of 2024, minimum wage in Bangladesh is 8000 BDT monthly.

 

Power to Declare Minimum Rate of Wages (Section 140)

  1. Upon receipt of the recommendation of the Wages Board under Section 139, the Government may, by notification in the official Gazette, declare that the minimum rates of wages recommended by the Wages Board for the various workers shall, subject to such exception as may be specified in the notification, be the minimum rates of wages for such workers.

 

Periodical Review of Minimum Rate of Wages (Section 142)

  1. If any change in the factors specified in Section 141 and other relevant factors so demand, the Wages Board shall review its recommendations once again and recommend to the Government any amendment or modification of the minimum rates of wages declared under Section 140. Provided that unless any special circumstances of a case so require, no recommendation shall be reviewed earlier than 1 year or later than 3 years from the date on which it was made.

 

Minimum Wages to be Binding on All Employers (Section 148)

The minimum rates of wage declared under Section 140 or published under Section 145 shall be binding on all employers concerned and every worker shall be entitled to be paid wages at the rate not less than the rates of wages so declared or published.

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4. Working Hours

Regular working hours are limited to 8 hours daily (Section 100) and 48 hours weekly (Section 102). However, workers may work more than the stated hours, subject to Section 108.

 

Section 108

  • An adult worker may work in an establishment for up to 10 hours daily.
  • An adult worker may work for more than 48 hours weekly, provided that the total working hours of such worker shall not exceed 60 hours weekly and on average, 56 hours per week in a year.

Hours of Rest

Daily
(a) Working for more than 6 hours: Entitled to 1 hour of rest
(b) Working more than 5 hours: Entitled to 30 minutes of rest
(c) Working for more than 8 hours: Entitled to a 1 interval under clause (a), or 2 intervals under clause (b)
Weekly
Shop, Commercial, Industrial Establishment 1 and half a day of rest
Factory Establishment 1-day rest

 

Prohibition to Pay Wages at a Rate Lower than the Minimum Rates of Wages (Section 149)

  1. No employer shall be entitled to pay any worker wages at a rate lower than the rates declared or published under this Chapter to be the minimum rates of wages.

5. Overtime

Extra-allowance for Overtime

  1. Under Section 108, where a worker works more than the hours fixed under this Act in an establishment for overtime work, the worker is entitled to allowance at the rate of twice his ordinary rate of basic wage and dearness allowance and ad-hoc or interim wage, if any.

 

Method of Calculating the General Rate of Overtime Allowance (Rule 102)

  1. As per Section 108, if there are not different agreements, the general rate of overtime allowance per hour shall be calculated in the following ways:
    • 1/8 of daily wage amount in case of the workers employed in terms of daily wage;
    • 1/48 of weekly wage amount in case of the workers employed in terms of weekly wage;
    • 1/208 of monthly wage amount in case of the workers employed in terms of monthly wage;

NB: 52-12 X 48 hours 208 hours shall be calculated as one month period. The rate of overtime allowance per hour monthly basic wage and allowance and ad hoc or interim wage (if any) X 2 X overtime hours/208 hours.

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6. Types of Leave

Annual Leave (Section 117)
1 day of leave for every 18 days of work
Earned leave can be encashed. However, more than half of the earned leave cannot be cashed out at the end of the year. This type of cashing can only be done once a year.
Sick Leave (Section 116)
14 days in a calendar year
A registered medical practitioner certification is needed to certify that the worker is ill and requires leave for treatment
Casual Leave (Section 115)
10 days of leave in a calendar year
Festival Holidays (Section 118)
11 days of festival holidays
Employer shall fix the day and dates in accordance with the rules
A worker who works on a festival holiday is to be compensated 2 days of compensatory holidays with wages and a substitute holiday shall be provided for him in accordance with the provisions of section 103
Maternity Leave (Section 47)
(1) If a pregnant woman is entitled to maternity benefit under this Act, she shall, on any day, give notice either orally or in writing to her employer that she expects to be confined within 8 (eight) weeks
(2) If a woman has not given any such notice, she shall inform her employer about her giving birth to a child by giving such notice within 7 (seven) days of her giving birth to child;
(3) After receipt of a notice under sub-section (1) or (2), the employer shall permit the employee to absent herself from work,
(a) in the case of a notice under sub-section (1), from the day following the date of notice;
(b) in the case of a notice under sub-section (2), from the day of delivery until 8 (eight) weeks after the day of delivery.

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7. Public Holidays

List of Public Holiday in 2024

Holiday Date Month Day Remarks
New Year’s Day (Danish holiday) 01 January Monday 01 Day
Martyr’s Day & International Mother Language Day 21 February Wednesday 01 Day
Shab-e-Barat* 26 February Monday 01 Day
Birthday of the Father of the Nation & National Children’s Day 17 March Sunday 01 Day (01 Weekly Holiday)
Independence & National Day of Bangladesh 26 March Tuesday 01 Day
Good Friday (Danish holiday) 29 March Friday 01 Day
Easter Monday (Danish holiday) 01 April Monday 01 Day
Jumatul Bida 05 April Friday 01 Day
Shab-e-Qadar* 07 April Sunday 01 Day (01 Weekly Holiday)
Eid-ul-Fitr* 10-12 April Wednesday – Friday 03 Days
Bangla New Year (Noboborsho) 14 April Sunday 01 Day (01 Weekly Holiday)
May Day 01 May Wednesday 01 Day
Ascension Day (Danish holiday) 09 May Thursday 01 Day
Buddha Purnima* 22 May Tuesday 01 Day
Eid-ul-Azha* 16-18 June Sunday – Tuesday 03 Days (01 Weekly Holiday)
Ashura* 17 July Wednesday 01 Day
National Mourning Day 15 August Thursday 01 Day
Jonmastomi 26 August Monday 01 Day
Eid-e-Miladunnabi* 16 September Monday 01 Day
Durgapuja 13 October Sunday 01 Day (01 Weekly Holiday)
Victory Day 16 December Monday 01 Day
Christmas Day 25 December Wednesday 01 Day
2nd Day of Christmas (Danish holiday) 26 December Thursday 01 Day

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8. Statutory Contributions

Bangladesh has no compulsory social security system in place. However, companies of a certain size are required to pay 5 percent of their profits to a Workers Profit Participation Fund. No contribution from employees is required.

 

Compulsory Group Insurance (Section 99)

  1. In an establishment where at least 100 permanent workers are employed, the employer shall introduce group insurance under the existing insurance laws.
  2. The amount claimed as insurance shall be in addition to the other dues of a worker under this Act: Provided that the recovery of the insurance claim due to death of a worker shall be the responsibility of the employer and he shall make arrangement for payment of the amount so recovered from such insurance claim directly to the dependents: Provided further that notwithstanding anything contrary contained in any other law, where any insurance claim is made under this section, it shall be settled by joint initiatives of the insurance company and the employer within 120 days from the date of raising such claim.

 

Section 160

(11) Where in any establishment at least 10 (ten) workers are working, the employer of such establishment may introduce and implement an insurance scheme against accident under group insurance program for the workers, and the benefits or money received from such accident insurance scheme shall be spent for the treatment of the workers.

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9. Termination and Severance

Type of Termination Details
Termination by an Employer (Section 26) (1) The employment of a permanent worker may be terminated by an employer, by giving him a notice in writing, of
(a) 120 days, if he is a monthly rated worker;
(b) 60 days, in the case of other workers.
(2) The employment of a temporary worker may be terminated by an employer, and if it is not due to the completion, cessation, abolition or discontinuance of the temporary work for which he was appointed, by giving him a notice in writing, of
(a) 30 days, if he is a monthly rated worker;
(b) 14 days, in the case of other workers.
(3) Where an employer intends to terminate the employment of a worker without any notice, he may do so by paying the worker wages for the period of notice, in lieu of the notice, under sub-section (1) or (2).
(4) Where the employment of a permanent worker is terminated under this section, he shall be paid by the employer compensation at the rate of 30 days wages for his every completed year of service or gratuity, if payable, whichever is higher, and this compensation shall be in addition to any other benefit which is payable to such worker under this Act.
Resignation by an Employee (Section 27) (1) A permanent worker may resign his service by giving the employer 60 days’ notice in writing.
(2) A temporary worker may resign his service by giving the employer notice, in writing, of
(a) 30 days, if he is a monthly rated worker;
(b) 14 days, in the case of other workers.
(3) Where a worker intends to resign his service without any notice, he may do so by paying the employer an amount equal to the wages for the period of notice, in lieu of notice under sub-section (1) or (2).
(4) Where a permanent worker resigns under this section, the employer shall pay compensation,
(a) at the rate of 14 days’ wages for every completed year of service, if they have completed at least 5, but less than 10 years of continuous service under the employer
(b) at the rate of 30 days’ wages for every completed year of service if they have completed 10 or more years of continuous service under the employer;
or gratuity, if payable, whichever is higher, and this compensation shall be in addition to any other benefit payable to such worker under this Act.

 

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.

 

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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