Sunday, March 8, 2020

Labour Law in Bangladesh

In Bangladesh, employment is regulated by the contractual agreement between employer and employee. Other than the contract, the Bangladesh Labour Act 2006 (as amended in 2013) and Bangladesh Labour Rules 2015 govern the employment of ‘workers’. ‘Worker’ is defined under Section 2(65) of the Bangladesh Labour Act 2006 to mean “any person including an apprentice employed in any establishment or industry, either directly or through a contractor in whatever name referred to, to do any skilled, unskilled, manual, technical, trade promotional or clerical work for hire or reward, whether the terms of employment be expressed or implied, but does not include a person employed mainly in a managerial or administrative, supervisory role or managerial capacity.” The main issues covered in the Act include:

• Conditions of service and employment

• Employment of adolescents

• Provisions relating to health, hygiene

• Employee welfare

• Working hours and leave

• Wages and payment

• Wages boards

• Workers compensation for injury by accident

• Trade union and industrial relations

• Disputes, labour court, labour appellate

• Tribunals, legal proceedings

• Workers participation in companies’ profits

• Regulation of employment and safety of dock workers

• Provident funds

• Apprenticeship

• Penalties and procedure

Moreover, as per the Bangladesh Labour Act 2006, organisations which do not fall within the scope of the Act, cannot have any employee rules, regulations and benefits less favourable than those provided under the Act. Under the Bangladesh Labour Act 2006, read with Bangladesh Labour Rules 2015, any contracting agency which, on contract, supplies workers to different organisations in different posts has to obtain a license from the Chief Inspector.

Employment contract In Bangladesh, a letter of appointment is mandatory in the absence of a written contract. The terms of the contract are binding between the employee and employer, providing they do not contravene the provisions of the Labour Act. Typically, the letter of appointment or written contract will include:

• Working hours

• Salary

• Role title

• Nature of work

• Working time and leave

• Procedures for dismissal

Minimum wage

Wages and benefits of public sector employees are, determined by the government on recommendation from the Pay Service Commission. For the private sector, in certain sectors such as for workers in trade and industry the government through the Minimum Wages Board fixes the minimum wages. Otherwise, there is no regulatory body for the private sector to determine the wages and benefits.

On 5 December 2013, the government of Bangladesh issued the Gazette on Minimum Wages which defined a new wage structure for the readymade garment (RMG) industry with an increase of the gross monthly minimum wage from BDT3,000 to BDT5,300. No increases have been announced since.

Working time and leave 

As per the Bangladesh Labour Act 2006 (amended in 2013), no adult shall ordinarily be required or allowed to work in an establishment for more than eight hours in any day and more than 48 hours in any week.

No women shall, without her consent, be allowed to work in an establishment between the hours of 10.00 PM and 6.00 AM. Consent must be given in a prescribed form, as per the Bangladesh Labour Rules 2015.

Where an employee works in an establishment on any day or week for more than the hours fixed under Bangladesh Labour Act 2006, he shall, in respect of overtime worked, be entitled to an allowance at the rate of twice his ordinary rate of basic wage and dearness allowance and ad-hoc or interim pay, if any

The Bangladesh Labour Act 2006 (as amended in 2013) stipulates that any worker employed in a shop, commercial establishment or industrial establishment is entitled to one and a half days of rest per working week. Those employed in a factory are entitled to one day. Those employed in an establishment which is a road transport service are entitled to 24 consecutive hours of rest in each working week. This should not have any effect on wage allowances.

Annual leave

As per Bangladesh Labour Act 2006 (amended in 2013), every adult, who has completed one year of continuous service in an establishment, shall be allowed fully paid annual leave calculated as follows:

• In the case of a shop or commercial or industrial establishment or factory or road transport service, one day for every 18 days of work

• In the case of a tea plantation, one day for every 22 days of work • In the case of a newspaper worker, one day for every 11 days of work

Healthcare and benefits

Large local and multinational companies typically provide employees with private health care, car facilities, subsidised meals and other fringe benefits. Employers must also pay compensation to employees who suffer a personal injury arising out of and in the course of his employment. Most of the companies in Bangladesh provide provident and gratuity benefits to permanent employees. Provident funds are generally built through the contribution of both the employees and employers. Provident funds for ‘workers’ within the meaning of the Bangladesh Labour Act 2006 have to be as per the requirements set out in the said Act.

Maternity benefit 

A woman is entitled to maternity leave of eight weeks before and eight weeks after the delivery provided she has worked with the employer for a minimum of six months prior to the delivery. No maternity benefit shall be payable to any woman if at the time of her confinement she has two or more surviving children. However, she will get leave if she is entitled to sick and/or annual leave. Thereafter, if further leave is required, the employer can grant further leave without pay. A government female employee is entitled to maternity leave of six months, twice during her job-life.

Probation

The maximum probationary period in Bangladesh is six months for workers operating in a role of a clerical nature and three months for other workers. The period of probation for skilled workers can be extended by an additional three months if it has not been possible to determine the quality of the work within the first three months.

Dismissal 

The termination of employment contracts can be done through discretionary termination, discharge, disciplinary termination or collective redundancies. Typically, to terminate a permanent employment contract unilaterally, a period of notice must be given. The employer must give 120 days’ notice, while the employee is required to give only 60 days’ notice. The period is shortened for temporary workers, whereby both employee and employer must only give 30 days’ notice.

Notice does not need to be given in the case of disciplinary termination on the basis of conviction for a criminal offence. For other disciplinary reasons, eg theft, fraud, habitual late attendance, negligent work or disorderly behaviour, the employee is given seven days to justify his misconduct. If the employee is unsuccessful in this, the employer is then obliged to call a hearing to determine whether the employee should be dismissed.

Social security 

Employees in Bangladesh are not obliged to contribute towards any social security funds. Companies satisfying the criteria set out in the Bangladesh Labour Act 2006 (as amended in 2013) must pay five per cent of their profits into a Workers Profit Participation Fund which is provided to all employees except those who are the owner, partner or directors who have been in employment with the said employer for a minimum of nine months.

Employment of non-resident :

Non-residents require a work permit to take up employment contracts in Bangladesh. This is subject to a number of conditions. Only residents of countries specified by the Bangladesh government can apply for work permits. Furthermore, employers cannot employ expatriates if there is a local expert available for the position. The number of expatriate employees in an industrial enterprise should not exceed 1:20 (foreign: local) ratio at any time during regular production. The ratio for commercial offices is 1:5 (foreign: local).

Prospective employers Prospective employers must be registered with the appropriate authorities (BOI) before they can employ expatriates. An initial work permit can be obtained for two years; this may be extended as reviewed by the relevant authorities.

To obtain a work permit, the prospective employer must file an application with the Board of Investment for an E-visa recommendation. Once received, the Bangladesh Embassy provides the employee with an e-visa which lasts three months. Once the individual arrives in Bangladesh, the employer must apply to the BOI for the work permit on behalf of the expatriate. This application will be filed alongside a number of documents, including: copy of the employer’s incorporation certificate, board resolution for the position of employment, contract, a copy of the advertisement for local recruitment and an encashment certificate of inward remittance of a minimum of USD50,000.

Trade unions

The Bangladesh Labour Act 2006 (amended in 2013) contains a number of provisions regarding the establishment of trade unions. Employees have the right to join and form a trade union primarily for the purpose of regulating the relations between employees and employers or between employees themselves. Employers shall have the right to form a trade union to regulate the relations between employers and workers or between employers. They are also free to join any trade unions of their choice.

Trade unions of employees and employers shall have the right to form and join federations and any such union and federation shall have the right to affiliate with any international organisation and confederation of employees’ or employers’ organisation.

Trade unions and employers’ associations shall have the right to draw up their constitutions and rules, to elect their representatives in full freedom, to organise their administration and activities and to formulate their programmes.

An application for the registration of a trade union shall be made to the Registrar of Trade Unions of the relevant area. A trade union of workers shall not be entitled to registration unless it has a minimum membership of 30 per cent of the total number of employees working in the establishment in which it is formed.


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