Statutory Compliance under the Labour Law in Bangladesh

The Bangladesh Labour Act, 2006 is the main legislation governing the rights and terms of service of a worker. The Act is supplemented by the Bangladesh Labour Rules, 2015.

The Act ensures the rights of a worker in respect of wages/salaries, working hours, leaves and working conditions and provides procedural safeguards against unfair termination, dismissal, lay off or retrenchment.

If any of the rights is infringed, the aggrieved worker can file a case in the Labour Court in Bangladesh. Any party aggrieved by a decision of the Labour Court may file an appeal to the Labour Appellate Tribunal.

Working hours and overtime

The Act stipulates maximum working hours for a worker, i.e. 8 (eight) hours a day excluding time for meal and provision for overtime which is additional 2 (two) hours and the total work time cannot exceed 10 hours each day.

Allowances and benefits for workers in Bangladesh

A worker is entitled to allowances which include festival allowances (two allowances each year and each allowance shall not exceed one month’s gross pay), gratuity (wages of at least 30 (thirty) days, at the rate of the wages a worker received last, for every completed year of service), maternity benefits, provident fund (subject to section 264 of the Act), participation fund and welfare fund (subject to fulfillment of certain conditions under section 232 of the BLA, 2006).

Holidays and Leave

The BLA, 2006 and the corresponding rules also lays down different categories of leave which encompass apart from 1½ days of weekly holiday, casual leave (10 (ten) days each year), sick leave (14 (fourteen) days each year), annual leave with wages (also known as earned leave- 1 (one) day for every 18 (eighteen) days of work in the preceding year and up to 50% of the unused earned leaves can be en-cashed), festival holidays (11 days each year) with wages and maternity leave (8 (eight) weeks preceding the expected day of her delivery and 8 (eight) weeks immediately following the day of her delivery).

Festival holiday

Every worker is entitled to 11(eleven) days of festival holiday with wages. A worker may be required to work on any festival holiday, but 2 (two) days compensatory holidays with wages and a substitute holiday shall be provided for him.

Earned Leave

According to section 117(1)(a) of the BLA, a worker who has completed 1 (one) year of continuous service in an establishment is entitled to earned leaves/annual leave with wages in the subsequent year which is calculated at a rate of 1 (one) day for every 18 (eighteen) days of work, provided he/she has completed 1 (one) year of continuous service in an establishment. Moreover, Rule 107 of the BLR, any worker can have cash money against the unspent earned leave. However, more than the half of the earned leave cannot be cashed out at the end of the year. The cashing out can only be done once in a year. A maximum of 60 (sixty) days’ of earned leave is allowed in a particular year.

Sick Leave

A worker is entitled to sick leave with full wages for 14 (fourteen) days in a year. The leave will not be granted unless a registered medical practitioner certifies that the worker is ill and requires leave for treatment.

Casual Leave

A worker is entitled to casual leave for 10 (ten) days with full wages in a year.

Procedure for taking leave

Section 10 of the Act which prescribes the procedure for obtaining of leave.

A worker who desires to obtain leave of absence shall apply to his employer in writing and shall state therein his address during leave.

The employer or an officer authorized by him shall issue an order within 7 (seven) days of receipt of the application or 2 (two) days prior to the commencement of leave applied for, whichever is earlier: Provided that if due to any urgent reasons the leave applied for is to commence on the date of application or within 3 (three) days thereof, such order shall be given on the day of receipt of the application.

If the leave asked for is granted, a leave pass shall be issued to the worker.

If the leave asked for is refused or suspended, the fact of such refusal or postponement and the reasons thereof shall be communicated to the worker before the date on which the leave would have expected to be commenced and it shall be recorded in the register maintained for the purpose.

If any worker, after he went on leave, desires an extension thereof, he shall, if such leave is due to him, apply [in writing by registered post before reasonable time] of the expiry of the leave to the employer who shall send a written reply either of granting or of refusing the extension of leave to the worker to his leave-address.

Provident Fund

Section 264(1) of the 2006 Act provides that “Any establishment in the private sector may constitute a provident fund for the benefits of its workers.” Therefore, it is discretionary upon the employer to constitute provident fund.

But this provision is subject to section 264(10) “Notwithstanding anything contained in this section, an establishment in the private sector shall be required to constitute a provident fund for the benefit of its workers, if at least three-fourths of the total number of workers employed therein so demand to the employer by an application in writing.” Therefore, if 3/4^th of the total workers demand for provided fund, the employer shall constitute such fund.

If provident fund is formed, the company can enact its own rules for management of the fund but its provisions should be commensurate or in line with the 17^th Chapter of the BLA and Bangladesh Labor Rules 2015.

Workers' Profit Participation Fund (WPPF) and Workers' Welfare Fund

In addition, there is statutory Workers Participation Fund and Workers Welfare Fund under the Labour Act to be constituted by the employer if a company or establishment fulfills any one of the following conditions, namely: the amount of its paid up capital on the last day of an accounting year is not less than taka 1 (one) crore; the value of its permanent assets on the last day of an accounting year is not less than taka 2 (two) crore, any hundred percent export oriented industrial sectors, hundred percent foreign exchange investing sectors and companies operating in the export-processing zones.

In accordance with section 232 of the Bangladesh Labour Act, 2006, a company or establishment having either paid up capital of at least one crore taka on the last day of any accounting year or fixed assets of at least two crore taka on the last day of an accounting year is required under section 234 of the Act to establish Participation Fund, Welfare Fund and Workers' Welfare Foundation Fund under the Bangladesh Sramik Kallyan Foundation Ain, 2006 and within 9 (nine) months of close of every year, contribute 5% of the net profit of the previous year at the proportion of 80:10:10 to respectively to the said funds.

Termination from service by the employer

The employer has to conform to section 26 of the Bangladesh Labour Act, 2006 for termination of a worker from service. It provides that the employment of a permanent worker may be terminated by an employer by giving him a notice in writing, of 120 (one hundred and twenty) days, if he receives wages monthly, and 60 (sixty) days, in case of other workers. The employer may terminate the worker without providing any notice after having paid wages for the stipulated months in lieu of notice. In addition to wages, the worker will be entitled to compensation which involves 30 (thirty) days’ wages for his/her every completed year of service or gratuity whichever is higher.

Resignation by the worker

A permanent worker intending to resign shall provide 60 (sixty) days’ prior notice in writing to the employer. If any worker intends to resign from 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.

Where a permanent worker resigns from service, he/she shall be paid by the employer compensation, at the rate of 14 (fourteen) days’ wages for his/her every completed year of service, if he completes 5 (five) years of continuous service or more but less than 10 (ten) years under the employer; or at the rate of 30 (thirty) days’ wages for every completed year of service if he/she completes 10 (ten) years of continuous service or more under the employer; or gratuity, if payable, whichever is higher.

Discharge of the worker from service due to illness, etc.

A worker may be discharged from service for reasons of physical illness or mental incapacity or continued ill-health certified by a registered medical practitioner.

If a discharged worker completes not less than one year of continuous service he shall be paid by the employer, as compensation, 30 (thirty) days’ wages for his every year of service, or gratuity, if payable, whichever is higher.

Death of the worker

If a worker dies while in service for at least more than 2 (two) years continuously under an employer, such employer shall pay as compensation 30 (thirty) days wages for every completed year of service or gratuity, whichever is higher.

Retrenchment of a worker from service

Section 20 of the Act provides the procedure for terminating an employee on the ground of redundancy. Any worker may be retrenched from service of any establishment on the ground of redundancy.

If any worker has been in continuous service under an employer for not less than 1 (one) year, the employer, in the case of retrenchment of such worker, shall give him 1 (one) month’s notice in writing mentioning the reasons for his retrenchment or, in lieu of such notice pay him wages for the period of notice; send a copy of the notice to the Chief Inspector or any other officer specified by him, and another copy to the collective bargaining agent of the establishment, if any; and pay him as compensation 30 (thirty) days’ wages for his every year of service or gratuity, if any, whichever is higher.

Dismissal from service

A worker may be dismissed without a notice or without wages in lieu of a notice if he/she is-

(a) convicted of any criminal offence

(b) found guilty of misconduct after following the procedures for punishment.

Imposing punishment for other misconduct

The following procedures shall be complied with in imposing a punishment to a worker for commission of a misconduct:

a) The worker shall be given a notice in writing containing the allegations or charges;

b) The worker shall have at least 7 (seven) days to submit her/her explanation;

c) An enquiry committee will be formed consisting of equal number of representatives of the employer and employees and such enquiry shall be concluded within 60 (sixty) days. The enquiry committee can have a maximum of 6 (six) members.

d) The worker shall have the right to make representation and produce oral and documentary evidence during hearing before the enquiry committee;

e) The enquiry committee will forward the investigation report to the disciplinary authority.

f) If the worker is found guilty by the enquiry committee, the disciplinary authority shall give a notice in writing to the worker specifying as to why the proposed penalty shall not be imposed on him/her. The worker will have at least 7 (seven) days to submit a reply.

g) The disciplinary authority shall then pass appropriate orders considering the inquiry report and reply submitted by the worker.

h) The management shall approve the order of punishment and a copy of the said order shall be communicated to the worker.

Workers on Probation

As per section 4(8) of the BLA, the period of probation for a worker whose function is of clerical nature shall be 6 (six) months and for other workers such period shall be 3 (three) months. However, in the case of a skilled worker, the period of probation can be extended for a further period of 3 (three) months if the quality of work could not be determined within the first 3 (three) months. Section 4(8) of the BLA stipulates that a worker shall be deemed to be permanent notwithstanding he has not been issued any confirmation letter after completion of his probationary period.

Unauthorized absence from work

By section 27 (3A) of the BLA, provision has been enacted to deal with employees who remain absent without notice or permission. It will be a best practice to include a similar provision in the employment agreement. If the worker fails to report to work place for 10 (ten) consecutive days without permission or notice, the Company shall serve a notice upon you instructing to show cause for such absence and to resume employment within 10 (Ten) days. If he/she fails to submit any written explanation or resume employment within the stipulated period of time, then he/she will be given further 07 (seven) days’ period to justify his/her position. If the worker fails to resume employment or justify thereof, the worker be deemed to have been released from service from the first day of absence.

Appointment letter and identity card

A worker is entitled to an appointment letter and an identity card with his photograph. Section 5 of the Bangladesh Labour Act, 2006 provides “No employer shall employ any worker without giving such worker an appointment letter and every such employed worker shall be provided with an identity card with his photograph.”

Maintenance of Service Book

An employer shall maintain a service book for each of his workers. The service book shall contain, along with his photograph, the following details of the worker :name of the worker, names of the mother and father and address of the worker (the name of the spouse shall also be written, where applicable), date of birth, special particulars for identification, designation, department or section, ticket or card, the name and address of previous employer (in any), period of employment, occupation or designation, wages and allowance (if any), leave availed and conduct of the worker.

Requirement to maintain a register of workers

An employer shall maintain a register of workers of his establishment and make it available to the Inspector for inspection at all times during working hours.

The following particulars shall be included in the register of workers, namely: name and date of birth of every worker; names of father and mother of the worker; date of appointment; nature of work, designation, department of section, ticket or card, working hour fixed for him, interval for rest and meals to which he is entitled, day of rest to which he is entitled, group, if any, in which he is included, where his group works on shifts, the relay to which he is allotted; and such other particulars as may be prescribed by rules.

Certificate relating to service

A worker is entitled to get a certificate relating to service from his employer at the time of his retrenchment, discharge, dismissal, removal, retirement or termination of service.

Group Insurance

In an establishment where at least 100 (one hundred) permanent workers are employed, the employer shall introduce group insurance under the existing insurance laws.

Can children and adolescent be appointed as worker?

Section 34(1) of the Act strictly prohibits employment of any child in the establishment. By section 2(63) “Child” means a person who has not completed 14^th years of age.

By section 34(2), an adolescent may be employed subject to having a certificate of fitness issued by a registered medical practitioner. The said provision is stated below: "No adolescent shall be employed or permitted to work in any occupation or establishment, unless (a) a certificate of fitness in the form prescribed by rules, and granted to him by a registered medical practitioner is in the custody of the employer ; and (b) he carries, while at work, a token containing a reference to such certificate.”