Employment termination law under the Labour Act 2006

Employment termination law best lawyers in bangladesh
10.27.2022
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Employment Termination Law Under The Labour Act 2006 22

Employment termination law under the Labour Act 2006:

In Bangladesh, either the employer or the worker may terminate an employee’s employment. There are multiple ways in which it can take effect. In sections (20-31) of the Labor Act of 2006, the procedure for terminating an employee’s employment is outlined in detail.

Employment termination law in Bangladesh

Causes for dismissal:

May an employer terminate an employee for any reason, or is “cause” required? How does the applicable statute or regulation define cause?

In accordance with sections 23 and 24 of the Labour Act, an employer may terminate an employee who has been convicted of a criminal offense or found guilty of misconduct.

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Employment Termination Law Under The Labour Act 2006 23

In addition, under section 26, an employee may be terminated without cause by providing the prescribed notice or pay in lieu. Under section 20, a worker may be terminated due to redundancy. In addition, according to section 22, a worker may be let go for reasons of physical or mental incapacity or ongoing ill-health certified by a registered medical practitioner.

Notice : Must termination be communicated prior to dismissal under Employment termination law? May an employer substitute pay for notice?

According to section 23 of the Labour Act, a worker may be terminated (for insubordination or a criminal offense) without notice or pay in lieu of notice. A permanent worker must be given 120 days’ notice for termination under section 26, whereas a temporary worker must be given 30 days’ notice (if he or she is a monthly rated worker) and 14 days’ notice (if he or she is an hourly rated worker) for termination under section 26. (for other workers).

The employer may, however, terminate any employee without notice by paying wages in lieu of notice. If the employee has been continuously employed for at least one year, they are entitled to one month’s notice or wages in lieu of notice. For dismissal, no prior notice is necessary.

In what situations may an employer terminate an employee without notice or payment in lieu thereof?

An employer may terminate an employee without notice or payment in lieu of notice if the employee has been convicted of a felony or found guilty of misconduct.

Separation pay:


Exists legislation establishing the right to severance pay upon employment termination? How is separation pay computed?

If an employee is fired for theft, misappropriation, fraud, or dishonesty in connection with the employer’s business or property, or for disorderliness, riot, arson, or property damage in the workplace, he or she is not entitled to severance pay.

In accordance with subsection 23(3) of the Labour Act, if a worker with at least one year of continuous service is removed under extenuating circumstances rather than being terminated for criminal conduct or misconduct, he or she is entitled to 15 days’ wages for each completed year of service. Nevertheless, a terminated employee is entitled to other benefits under the Labour Act, as applicable (such as provident fund, workers’ profit participation fund, and welfare fund).

If a permanent worker’s employment is terminated pursuant to section 26 of the Labour Act, he or she is entitled to 30 days’ wages for each completed year of service or gratuity (if any), whichever is greater, in addition to any other benefit payable under the Labour Act, as applicable (such as provident fund, etc.).

Under section 20(2)(c) of the Labour Act, a worker who has been in continuous service for at least one year is entitled to 30 days’ wages for each year of service or gratuity, whichever is greater. In addition, he or she will be entitled to any other benefits payable under the Labour Act (such as provident fund, etc).

Section 22(2) of the Labour Act stipulates that a worker who has been in continuous service for at least one year is entitled to 30 days’ wages for every year of service or gratuity (if any), whichever is greater. In addition, he or she is entitled to any other benefits payable under the Labour Act (such as provident fund, etc).

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Employment Termination Law Under The Labour Act 2006 24

Redundancy:

According to Section 20 of the Act, any employee may be terminated from the company in the event of redundancy. A worker who has been employed by the company for at least one year must be given thirty days’ notice prior to termination. In addition, the worker is entitled to compensation equal to 30 days of wages for each year of service completed.

In accordance with section 21, if a worker is laid off and the employer intends to hire a new worker within a year, the employer must send a notice to the retrenched worker’s last known address inviting him to apply for re-employment. If more than one retrenched employee is available, seniority in the previous service shall be given preference.

Released due to medical inability:

A worker may be discharged from service under section 22 for physical or mental incapacity, as certified by a licensed physician. If a worker has completed one year of continuous service, his employer must compensate him with 30 days’ wages for each completed year of service.

Dismissal due to misconduct:

Section 23 discusses the penalties for infractions and convictions. A worker is punished for his or her misconduct and conviction. A worker may be subject to retrenchment, discharge, or termination of service without notice or pay in lieu of notice if he is found guilty of misconduct or committing a crime.

A worker found guilty of misconduct may receive a sanction other than dismissal, such as:

  • Removal
  • Demotion to a lower rank.
  • Stoppage of promotion for a maximum of one year and withholding of increment for a maximum of seven days.
  • Warning\ fine


The Act constitutes misconduct, specifically:

  • Wilful disobedience to any lawful order from a superior, whether committed alone or in conjunction with others.
  • Theft, deceit, and dishonesty
  • Persistent absence without leave or permission to be absent, absences exceeding ten days.
  • Habitual late attendance.
  • Consistent violation of any law, rule, or regulation.
  • Workplace negligence on a regular basis.
  • Altering, tampering with, damaging, or destroying an employer’s official records.
  • If an employee who was terminated is exonerated on appeal, he must be reinstated to his original position or appointed to a suitable position. If neither option is feasible, he will be compensated.

In the event of an allegation of misconduct, a committee must investigate the matter, and the employee in question must be shown cause and given the opportunity to defend himself. It should be noted that a worker can be terminated without prior notice in the event of a criminal conviction or misconduct.

Methods of punishment:

According to section 24, no order of punishment may be issued against a worker unless the allegation against him is made in writing, he is given a copy of the allegation and at least seven days to respond, and he is afforded the opportunity to be heard. No order of punishment shall be issued against a worker unless the worker is found guilty after an investigation conducted by a committee comprised of employer and worker representatives and concluded within sixty days. If no disciplinary action is taken against an employee, the employer or manager approves the dismissal.

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Employment Termination Law Under The Labour Act 2006 25

A worker accused of misconduct may be suspended pending an investigation, unless the matter is pending before a court, and for no longer than sixty days. During the period of suspension, however, a worker must be paid by his employer and receive his full allowance. The suspension order must be in writing and take effect immediately upon delivery to the employee. In the event that a worker is punished, a copy of the punishment order must be provided to the worker in question.

No fine exceeding one-tenth of wages payable to a worker during a wage period may be imposed on any worker, according to section 25’s special provision regarding fines.

A worker who is under 15 years old shall not be subject to a fine. No fine imposed on a worker may be collected in installments or more than 60 days after the date it was imposed. Employers are required to record all fines in a prescribed register.

A dismissal without cause

Section 26 permits an employer to terminate a worker’s employment for convenience. Under this Section, an employer may terminate the employment of a permanent worker by providing him with a written notice of 120 days if he is a monthly rated worker and 60 days if he is another worker.

In addition, it is impractical to provide notice to the employee; an employer may offer compensation in lieu of notice. In the event of such a termination, the employee must be compensated at a rate of 30 days’ pay for each completed year of service or gratuity, whichever is greater.

Resignation of an employee under labour law of Bangladesh:

According to section 27, a permanent employee may resign by providing 60 days’ written notice to the employer. In contrast, a temporary worker may terminate his employment by providing 30 days’ written notice if he is a monthly rated worker and 14 days’ written notice in all other cases. However, if an employee wishes to resign without notice, he may do so by paying the employer an amount equal to the wages for the notice period.

Retirement under labour law of Bangladesh:

Retirement is discussed in Section 28. A worker must retire at the age of 60, and he or she must be compensated for all outstanding obligations. To determine the age of a worker, the date of birth recorded in his or her service book shall serve as conclusive evidence. Any authority may employ a contract-holding retiree if it sees fit.

Under section 28, if an industry is shifted or a sector is permanently closed due to a natural disaster or other disaster beyond human control, the government may determine the employer-employee relations in accordance with rules.

According to section 29, if a worker is a member of a provident fund and is entitled to any benefit from such a fund, including the employer’s contribution, he or she is exempt from income tax. He shall not be disqualified from receiving the benefit due to layoff, discharge, dismissal, retirement, removal, or termination of service.

When a worker’s employment ends due to retirement, discharge, retrenchment, dismissal, termination, or any other reason, the appointing authority must pay all amounts owed to him within a maximum of 30 working days.

Section 31 stipulates that, at the time of retrenchment, discharge, or termination of service, every employee is entitled to receive a service certificate from his employer.

Section 307 specifies the amount of punishment for violating a provision of Bangladesh labor law when no other provision of law specifies a punishment. Whereas section 310 stipulates that if an employer is punished for the violation of any law, rule, regulation, or scheme of the law, the court may, by written order, impose additional punishment for removing the cause for which the offense was committed.

Dismissal under labour law in Bangladesh:

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Employment Termination Law Under The Labour Act 2006 26

Due to “Misconduct,” an employee may be “Fired.” “Dismissal” is defined by Section 2(39) of the Labour Act, 2006 (as amended in 2013) as “the termination of a worker’s services by an employer for misconduct.”

The following definitions of “Misconduct” from Section 23(4) of the said Labour Act, 2006 (as amended in 2013) may be applicable in this instance:

willful insubordination or disobedience, alone or in conjunction with others, to any lawful or reasonable order of a superior theft, embezzlement, or fraud in connection with the employer’s business or property absence without leave for more than ten days riotous or disorderly conduct in the workplace, arson, or any act subversive of discipline

According to Section 24 (1) of Said Labour Act, the following procedures must be followed in the event of a Dismissal:

The charges against him must be documented in writing.


He must be found guilty after an investigation conducted by an Investigation Committee comprised of an equal number of representatives from the Employer and the Workers, with the duration of the investigation not exceeding sixty days.
The employer or manager must approve such a dismissal order.

The said section 24 goes on to state in terms Employment termination law:

i)An employee accused of misconduct may be suspended pending an investigation into the charges against him, but such suspension shall not exceed sixty days unless the matter is pending before a court.
During the period of such suspension, a worker’s subsistence allowance and other allowances, if any, shall be paid by his employer.

ii) A suspension order must be in writing and take effect immediately upon delivery to the employee.

iii) During an investigation, the accused worker may be assisted by any establishment employee nominated by him.

iv) If oral evidence is presented on behalf of a party during an investigation, the opposing party may cross-examine the witness.

v) If, after an investigation, a worker is found guilty and punished under section 23 (1), he is not entitled to wages for any period of suspension, but is entitled to subsistence allowance for such period.

vi) If the charges against the worker are not proven in the investigation, he shall be deemed to have been on duty during the period of suspension for investigation, if any, and shall be entitled to his wages and subsistence allowance for the period of suspension.

When a worker is punished, a copy of the order imposing the punishment must be provided to the worker in question

viii) If a worker refuses to accept any notice, letter, charge-sheet, order, or other document addressed to him by the employer, it shall be deemed that such notice, letter, charge-sheet, order, or document has been delivered to him if a copy of the same has been displayed on the notice board and another copy has been sent to the worker’s address as available from the employer’s records, by registered post.

ix) When determining a worker’s punishment, the employer must consider the employee’s prior record, the severity of the misconduct, and his or her achievements and accomplishments during his or her employment.

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Employment Termination Law Under The Labour Act 2006 27

According to subsection (2) of section 23 of the aforementioned Labour Act, a worker convicted of misconduct may, in lieu of dismissal under subsection (1), be subject to any of the following punishments, namely:

Removal; reduction to a lower post, grade, or pay scale for a maximum of one year
Promotion halted for a period not to exceed one year;
Withholding of increment for up to a year; fine; suspension without pay and subsistence allowance for up to seven days; reprimand or admonition.

According to section 23(3), a worker who is “removed” as a form of retaliation must be compensated by his employer at the rate of fifteen days for each full year of service if his continuous service is at least one year. Except in cases of theft, embezzlement, or fraud related to the employer’s business or property, riotous or disorderly conduct in the workplace, arson, or any act subversive of discipline.

Reinstatement as per employment law in Bangladesh:

As per Sonali Bank vs Abdul Barek,

“Reinstatement of a dismissed employee pursuant to section 34 of the Industrial Relations Ordinance of 1969 (briefly, the Ordinance).

Mr. Asrarul Hossain, the learned Advocate for the petitioner, the employer, and Mr. Mozammel Huq Bhuiya, the learned Advocate for respondent No. 1, the employee, have been heard. It is not necessary to reproduce the facts of the case in order to dispose of this rule, as it can be disposed of based on the construction of Section 2(XXVIII) of the Ordinance in conjunction with Section 34 of the same ordinance. Respondent No. 1 was employed as a Supervisor by the petitioner, Sonali Bank, at the relevant time; however, he was terminated by the petitioner after an internal investigation into allegations of misconduct.

He had challenged the dismissal order under Section 34 of the Ordinance and was granted the remedy following a thorough hearing. Mr. Asrarul Hossain has referenced section 2 of the Ordinance’s definition of a worker or workman.

He argued that a worker who has been terminated or removed from employment and whose termination or removal is unrelated to any industrial dispute cases is not a worker for the purposes of any proceeding under the Ordinance, and therefore cannot file an application under section 34 with the labor court. He has cited a number of court decisions in support of this position, including the Supreme Court’s decision reported in 30 DLR 251 and two decisions of this court reported in LEX/BDHC/0101/1975: 28 DLR 160 and 30 DLR 211.

Evidently, Mr. Hossain’s argument has merit and must be upheld, as it is now a settled point of law that a dismissed worker, whose dismissal is unrelated to an industrial dispute, cannot file an application under section 34 of the Ordinance, and that his remedy is to file a complaint under section 25 of the Employment of labor (Standing orders) Act, 1965. Consequently, it is evident that the application for reinstatement under section 34 was not maintainable, and that the challenged order of the labor court was void for lack of jurisdiction.”

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Employment Termination Law Under The Labour Act 2006 28

“The respondent was fired from the company for insubordination after a thorough investigation and with the prior approval of the Managing Director, who is the Chief Executive Officer of the company. As the dismissal order was issued as a matter of routine procedure by the Assistant Labour Officer, the High Court Division found nothing wrong with the order and consequently declared the Labour Court’s judgment and order to have been passed without legal authority and without legal effect.

Hopefully, the preceding discussion has enabled everyone to comprehend layoffs and their prescribed procedures.

What are the procedural requirements for dismissing an employee in Bangladesh?

Section 24 of the Labour Act specifies the procedure for dismissing a worker, which includes informing him or her of the allegation in writing and providing an opportunity for a hearing. However, by law, no prior approval from a government agency is required.

Under what conditions are employees protected from dismissal in Bangladesh?

Despite being found guilty of misconduct, a worker may be sentenced to any of the following punishments under section 23(2) of the Labour Act in extenuating circumstances: 

  • removal (in which case he or she is entitled to 15 days' pay for each completed year of service, provided that he or she has been in continuous service for at least one year); 
  • reduction to a lower post, grade, or pay scale for a period of no more than one year; 
  • Promotion suspension for a period of no more than one year; withholding of increment for a period of no more than one year; fine; suspension without wages or subsistence allowance for a period of no more than seven days; or censure and warning.

Is there a set of rules in place for mass terminations or collective dismissals?

No.

Are class or collective actions permitted, or must employees assert labor and employment claims individually?

In employment cases, class and collective actions are permitted.

Is it legal in your state for employers to impose a mandatory retirement age? If so, at what age and with what restrictions?

The Labour Act, Section 28(1), establishes a retirement age of 60 years.

How ‘Tahmidur Rahman & TR Barristers in Bangladesh Associates’ helps the Employee/Employer according to Labour Law Provisions of Bangladesh

At TR Barristers in Bangladesh in Gulshan, Dhaka, Bangladesh, the barristers, lawyers and lawyers are highly experienced in dealing with labor disputes. It also has experience in consulting and assisting numerous international clients, in addition to handling various issues related to employment service among domestic clients on a regular basis.

For queries or legal assistance, please reach us at:

E-mail: [email protected]
Phone: +8801847220062 or +8801779127165
House 410, Road 29, Mohakhali DOHS

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