Labour Law Bangladesh and latest updates:
The Labour Law Act of Bangladesh was recently revised with modifications in 2013 and 2018. Since the implementation of the Bangladesh Labour Act (BLA) in 2006 and the Bangladesh Labour Rules (BLR) in 2015, labour law compliance has increased significantly. Bangladesh has established a reputation as one of the world’s most labour-intensive countries. With its domestic readymade garment (RMG) industry and internationally known labor export sector, there was an increased requirement for labor law compliance, which was reduced by the enactment of the Labour Act 2006 and the Labour Rules 2015. Nonetheless, our labor regulations have come under intense examination from several international organizations.
Following the Labour Law Act in 2006 and Labour Rules in 2015, it was further revised in 2013 and 2018, attempting to ensure the
Productivity, working-class well-being, and acceptable responses to human rights pressure groups’ compliance. In 2015, the government of Bangladesh (GoB) amended Labour Rules in accordance with the assurance given to the International Labour Organization (ILO) in areas such as trade unions, employee rights under third-party contractors, classification of permanent work, incorporation of a digital labour registrar, timelines for misconduct investigation procedures, and representation of an accused employee.
Definition of Workers and Their Expansion
In terms of worker categorization under the BLA 2006, an individual worker is considered permanent once his or her probationary period or extended period of three months is completed. Each individual’s employment would be conditioned on successfully completing his or her probationary period. However, if it is clerical in nature, then six months. For other workers, an initial three-month period, followed by another three-month extension if necessary to determine his or her quality, with a total of 180 days.
However, the 2022 Amendment adds a new provision to the BLR 2015 that states that any work that has been continuous in the institution without interruption for 180 days shall be considered primary or permanent work.
This raises the question of whether an individual worker’s classification is determined by the number of days he or she has worked or if the work or position to which such a person is assigned has been ongoing for more than 180 days. This modification will be crucial for corporations due to the risk of litigation brought by outsourced personnel. Outsourced workers may now attempt to rely on these amended provisions to argue that employers can no longer engage outsourced workers in a designation or post that is included in the employer’s permanent manpower structure or organogram and requires more than 180 days of work.
Employees of Third Party Contractors.
Employee rights under third-party contractors have historically resulted in legal disputes between employers and employees. One of the noteworthy revisions to the Bangladesh Labour Act, 2006, during its 2013 amendment was that workers provided by a contracting agency would be treated as employees of the contractor in question. They were denied the same privileges as direct employees, including equal pay and other financial perks. Even if these individuals are hired by third-party contractors, they are more likely to sue direct companies, resulting in unexpected inconvenience and expenditures. According to the recently modified regulations 4 and 5, third-party contractors must pay their employees the same wages as direct firm employees. In addition, companies that do not already have an operating gratuity system must now establish a ‘Workers’ Social Security Fund’ to give third-party employees with the same benefits as gratuity.
The 2022 Amendment to the Bangladesh Labour Rules (BLR) 2015 currently states that the pay of a contracting agency worker must not be lower than those of a permanent worker or employee of a similar level. The basic wage must be at least 50% of the determined salary. This has both financial and practical implications for its implementation.
Hiring drivers, security guards, cleaners, and other third-party contractors would provide third parties with professional services at competitive rates. Employees of such contracting agencies will be expected to be paid pay equivalent to those of permanent employees of a similar rank within the firm, which will result in additional expenditures. This may increase the cost burden before contracting agencies may generate a profit. Furthermore, it creates complications because it is unclear how the contracting agency and engaging firm will know each other’s specific wages.
It may be impossible for a contracting agency to ensure that its compensation in diverse positions match those of its clients, who have distinct pay structures. These may cause confusion among the parties.
Nature of work and its expansion.
Another key rule in the modified Act is for permanent work; the changed rule specifies that, depending on the type of employment, any work performed in a workplace for more than six months is considered permanent. This revision is expected to significantly alter the character of what is now referred to as ‘contractual work’. Previously, firms could keep employees for more than six months, even if the job appeared to be permanent. Contractual labor can now only be offered for transitory or project-based duties.
The Act now covers more workers, including those employed in inland water, allowing them to benefit from the same rights and protections. Other types of workers, such as those in the tea business, can now keep their present leisure facilities in addition to monetary incentives.
Yearly increment
The BLR 2015, as amended, now requires an obligatory yearly wage rise of at least 5% of basic earnings. Interestingly, the 2022 Amendment makes no mention of any provision or exception that an employer can use to set preconditions, such as reaching KPIs or having a certain profitability threshold, while attaining salary increases. In the workplace, firms will confront the push to increase personnel expenditures regardless of practicality, despite the overall slowdown in growth during these times of global economic crisis.
Furthermore, the fundamental legislation, BLA 2006 as modified, contains no statutory provision requiring such mandated annual salary increases. This raises the question of whether such an act lacks legitimate authority if it is not expressly sanctioned by statute.
Disciplinary Action Procedure.
To preserve worker discipline, allowing participatory committees to select representatives for employees facing misbehavior allegations, if the employee is unable to do so within the period allocated for the investigation, will now be extended to 60 days. This would be calculated from the moment a show-cause notice is served to the time a judgment is rendered. However, in order to reduce the delay, harassment may occur.
BLA 2006 and BLR 2015 both require the disciplinary inquiry procedure to be completed within 60 days. However, it did not specify when these 60-day periods would begin, potentially leading to conflicting court procedures and interpretations. The 2022 Amendment seeks to provide clarity and alleviate this confusion by stating that the day the show-cause notice was issued until the day the complaint was disposed of shall be considered for the purpose of counting these 60 days.
The fact that the 60-day term begins with the issuance of the show-cause notice reduces the amount of time available to the disciplinary investigation committee because the accused employee is expected to be given 7 days to respond to the show-cause notice. In the event of an unsatisfactory response, the disciplinary investigation committee requests a nomination from both the accused employee and the employer. The inquiry committee is then intended to properly investigate each of the claims and give the accused the opportunity to present his or her case. In this regard, the investigation committee must draft and submit a report. Completing all of these actions within 60 days following the show-cause notice is tough to achieve.
Maternity Leave for Female Employees
Amendments that ensure that workplaces are better for women workers, such as Rule 16, which fixes the maternity benefit computation and divides the salary rate by 26, which improves their benefits. A woman can now take maternity leave for at least 8 weeks after the birth of her kid, even if she did not declare her pregnancy prior to delivery. The previous Act was ambiguous about what should happen in such a scenario, but this modification clarifies that the woman worker can now get 8 weeks of paid leave in addition to her other benefits. The rule does not apply to a woman who has miscarried, although she is still entitled to sick leave as required. According to the clause, in the event of a miscarriage, a woman worker is entitled to a four-week absence with pay.
Abusive behavior against female employees
Another much-needed modification is Rule 88, which redefines sexual harassment in the workplace. The case laws on this issue, in the form of court precedent, have been given due weight. With women working in a variety of fields, including companies, multinationals, and the RMG sector, this rule was actively sought. The guidelines now contain a provision prohibiting indecent and abusive behaviour towards female employees in any establishment. The amendment requires all workplaces to organize a five-member sexual harassment prevention group led by a woman.
Better workspace
Men and women in major industries work under substandard conditions and deserve a better working environment. To that purpose, the revised Act now requires medium-sized enterprises employing at least 25 persons to offer appropriately spacious lunchrooms for their employees. This was previously only required for businesses with 50 or more employees.
Looking after workers’ families
In the event that a worker dies while on the job, the new clause also provides for the worker’s family. Previously, the employer would pay compensation to the labour court. Now, if a worker dies or goes missing, the company must pay the person’s nominee or legal heir directly.
If this is not possible, the benefit will be transferred to a workers welfare group, where it will remain for a maximum of ten years or until a claimant comes. If there is no claimant within a decade, the funds will be used to meet the needs of the remaining members of the organization. This law allows the benefit to be transferred directly to the workers’ families rather than having to go through the inconvenience of obtaining it from the labor court, or at the very least to be used for the benefit of other workers rather than simply lying in labor court.
Compensation for work during holidays and worker wages
Workers can now be called into work on any major holiday with only one physical substitute day and two (two) days of monetary benefits. Previously, employers were required to provide three compensatory days. Even though this amendment primarily benefits businesses, it does not fail to protect employees.
Under the newly modified BLR 2015, workers’ basic earnings cannot be less than 50% of their total wages if the government has not established a separate minimum wage.
Compensation
This change alone has the potential to have a significant impact on a company’s overall compensation system. Many organizations already have a compensation structure in place where the total value of extra benefits and allowances exceeds the basic salary payable. That is no longer the case under the new standards, as basic wages payable to workers must be at least fifty percent (50%) of total compensation. Companies with various pay arrangements may be obliged to change the status quo and incorporate this new obligation.
This may prove to be more difficult than it appears because entities that currently provide higher perks and allowances in relation to basic wages may now be required to boost basic wages rather than merely changing and revising the heads. This is because reducing payments for such perks and allowances may only attempt to attain a 50:50 ratio.
The trade union
Other revisions that assist employees include making it easier and less expensive for workers to join trade unions, so helping to protect workers’ rights and interests.
Bangladesh is a booming economy, and more needs to be done to ensure that the enormous number of individuals engaged in various industries contribute to the economy. Keeping people happy and motivated is a pleasant gesture made possible by these labor law improvements. While these changes have not totally eliminated all of the kinks, they are a promising beginning toward providing the kind of work environment that these individuals deserve.
While the 2022 Amendments to BLR 2015 have been a much-anticipated legal update for the legal fraternity and entities doing business in Bangladesh, several of its provisions may be subject to legal challenge in courts of law on the grounds that they are ultra vires, or without lawful authority. The government will work more closely with key stakeholders to meet the requirements of businesses in the coming days, including achieving greater legal clarity and supporting investment.
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