Changes To The Contract
The contractual nature of the employment relationship means that the employer is restricted from making any amendments to the terms of the contract without the consent of the employee; the change may either be express or implied.
Change In Ownership Of The Business
Although employees generally have the discretion to choose if they want to work for the new owner, when there is a change in the ownership of the business the employees also commonly pass under the change as the employment contract is between the employee and entity, not with its owners.
Social Security Contributions
Employers that satisfy either of the following conditions are required to establish a Workers Profit Participation Fund ( WPPF) and to contribute 5% of their annual profit to their WPPF, Welfare Fund (maintained by the company), and Workers' Welfare Foundation (maintained by the Government) in the ratio of 80:10:10 before September each year:
- the paid-up capital of the company on the last day of its accounting year is one crore taka or more; or
- the value of the fixed assets of the company on the last day of the accounting year is at least two crore taka.
Mandatory implementation of WPPF currently does not apply to 100% foreign invested companies or 100% export oriented pending the enactment of relevant rules by the Government of Bangladesh.
Accidents At Work
The main acts regulating workplace health and safety in Bangladesh is Labour Act read with Labour Rules. The Labour Act read with Labour Rules covers all workplaces in Bangladesh except Export Processing Zones which are regulated by Bangladesh EPZ Labour Act, 2019 and:
- imposes general duties of care on various stakeholders (eg employers, principals and employees);
- requires employers, in particular, to proactively identify and mitigate risks and hazards at the workplace;
- report work-related accidents, certain incidents qualifying as dangerous occurrences and certain specified occupational diseases;
- require employers to compensate for work-related injuries or diseases; and
- imposes penalties to reflect the cost of poor safety management.
Discipline And Grievance
The law lays out what instances may be considered as misconduct, which may justify dismissal without advance notice or compensation in lieu of notice. They are:
- Wilful insubordination or failure to obey, whether alone or in combination with others, any lawful or reasonable order of a superior;
- Theft, fraud or dishonesty in connection with the employer’s business or property;
- Taking or giving a bribe in connection with one’s own or any other worker’s employment under the employer;
- Habitual late attendance;
- Habitual breach of any law or rule or regulation applicable to the establishment;
- Riotous or disorderly behaviour in the establishment, or any act subversive of discipline;
- Habitual negligent work;
- Habitual breach of any rule of employment, including conduct or discipline, approved by the Chief Inspector of Factories and Establishments;
- Falsifying, tampering with, damaging, or causing loss of the employer’s official records; and
- Conviction for any criminal offense.
A worker found guilty of misconduct may, instead of being dismissed, under any extenuating circumstances, be awarded any of the following punishments, namely: (a) removal; (b) reduction to a lower post, grade or scale of pay for a period not exceeding one year; (c) stoppage of promotion for a period not exceeding one year; (d) withholding of increment for a period not exceeding one year; (e) fine; (f) suspension without wages or without subsistence allowance for a period not exceeding seven days; (g) censure and warning.
Any worker who has a grievance in relation to any employment matter (including in relation to the termination of his or her employment) and intends to seek redress must inform his or her employer in writing within 30 days from the date on which the grievance arose. Within 30 days of receiving information in relation to a grievance, the employer must:
- inquire into the matter;
- provide the worker an opportunity to be heard; and
- communicate its decision to the worker.
If the employer fails to come to a decision or if the worker is dissatisfied with the employer's decision regarding the grievance, the worker may lodge a complaint in writing to the Labour Court within 30 days (ie either from the date of the employer's failure to provide the decision or the date of the employer's decision, as applicable).
The Constitution of Bangladesh provides all citizens with fundamental rights that provide protection against discrimination on grounds of religion, sex, caste, race, or place of birth, and guarantees equality in matters of public employment. The Constitution prohibits all forms of forced labour and using forced labour is a punishable offence. In addition, the Constitution provides women with equal rights in all spheres of State and public life.
The Labour Act prohibits employers from discriminating against any person in relation to any employment, promotion, conditions of employment or working conditions on the ground that such person is (or is not) a member or officer of a trade union. The Labour Act, 2006 also imposes equal ay for equal amount of work allowing no discrimination to be made in this respect on the ground of being male, female or handicapped.
In addition, the Labour Act prohibits employers from refusing to employ, terminating or threatening to terminate, injuring or threatening to injure, workers in respect of their employment by reason that the worker proposes to become (or seeks to persuade any other person to become) a member or officer of a trade union. The Labour Act provides that in determining wages or fixing minimum rates of wages for any worker, the principle of equal wages for male and female workers for work of equal nature and value must be applied.
In addition, the Labour Act contains a prohibition on any conduct towards a female worker which may seem to be indecent or repugnant to the modesty or honour of that female worker.
Compulsory Training Obligations
There are no compulsory training obligations placed on either the employers or employees.
Following deductions are allowed under the Labour Act, 2006:
- fines imposed under the Labour Act;
- deductions for unauthorised absence from duty;
- deductions for damage to or loss of any goods under the custody of a worker or for loss of money for which he or she is liable to account, where such damage or loss is directly attributable to his or her neglect or default;
- deductions for accommodation provided by the employer;
- deductions for facilities and services approved by the Government and provided by the employer, other than the raw materials and equipment used for the requirement of employment;
- deductions for recovery of advances or loans, or adjustment of overpayments of wages;
- deductions of income tax payable by the worker;
- deductions by order of a court or any authority competent to make such an order;
- deductions for subscriptions to, and payment of advances from, any recognised provident fund;
- deductions for payment to any co-operative society approved by the Government or to an insurance scheme maintained by the Bangladesh Postal Department or any Government Insurance Company;
- deductions made with the written consent of the worker for contribution to any fund or scheme constituted by the employer with the approval of the Government for the welfare of workers or their family members; and
- deduction of subscription to the Collective Bargaining Agent Union through a check-off system.
Payments For Maternity And Disability Leave
Except for maternity leave and sick leave with pay, there are no mandatory payment granted for Maternity and Disability Leave.
Group medical insurance is mandatory for industries employing over 100 workers to meet payment liability for bodily harm or disease contracted by the employees during the course of employment.
Absence For Military Or Public Service Duties
If an employee is required to participate in compulsory military or public service, the employee is generally entitled to return to the same position following the completion of such service, but they are not paid while they are on such leave.
Works Councils or Trade Unions
The entitlement of workers to join any trade union is based on the fundamental right of freedom of association guaranteed by the Constitution of Bangladesh. The primary role of trade unions in the workplace is to regulate relations between:
- workers and employers;
- workers and workers; and
- employers and employers.
The Labour Act provides that workers have the right to:
- form trade unions, primarily for the purposes of regulating relations between workers and employers and workers amongst themselves; and
- join a trade union of their choice (subject to the constitution of the union concerned).
Workers may form a trade union if minimum 20% workers in that company becomes members of such a prospective union. Relevant prospective union may apply to the Department of Inspection of Factories & Establishment (Ministry pf Labour) for its recognition as a union. If there are more than one union in a company, the company is required to arrange a vote to nominate a collective bargaining agent (CBA).
If a company does not have any trade union but have minimum fifty workers, then such company is required to form a participation committee with equal participation from the employer and workers. The participation committee does not have any bargaining power but it acts as a bridge between employer and workers to maintain cooperation, standardization, skill development and increase productivity. Participation committee can provide non-binding recommendation to the employers for the wellbeing of the workers.
In general, trade unions play the role of advancing the social and economic wellbeing of workers. Trade unions may participate in collective bargaining and the settlement of disputes between workers and employers. Trade unions may participate in collective bargaining, and collective agreements may be implemented in Bangladesh.
Employees’ Right To Strike
The right of workers to strike and the right of employers to lock-out employees are guaranteed under the Labour Act provided certain conditions are met. Upon institution of an industrial dispute, if conciliation fails and if the parties do not agree to settlement by arbitration, the parties may go on strike or impose a lockout subject to compliance with the relevant rules.
Employees On Strike
The party which raises any industrial dispute may, within 15 (fifteen) days of receipt of the certificate of failure of the conciliation process give a notice to the other party, of strike or lockout, as the case may be, in which the date of commencement of such strike or lockout shall be mentioned, which shall not be earlier than seven days and later than 14 (fourteen) days of the date of giving such notice, or the party raising such dispute may make an application to the Labour Court for adjudication of the dispute.
A collective bargaining agent cannot serve any notice of strike, unless two-thirds of its members give their consent to it through a secret ballot, specially held for that purpose, under the supervision of the Conciliator. If a strike or lock-out begins, either of the parties to the dispute may make an application to the Labour Tribunal for adjudication of the dispute.
If any strike or lock-out lasts for more than 30 (thirty) days, the Government may, by order in writing, prohibit it. The Government may, by order in writing, also prohibit a strike or look-out at any time before the expiry of 30 (thirty) days if it is satisfied that the continuance of such strike or lock-out is causing serious hardship to the public life or is prejudicial to the national interest.
Employers’ Responsibility For Actions Of Their Employees
Employers are generally liable under the doctrine of vicarious liability for negligent misconduct of its employees performed during the course of employment.