Bangladesh Employment Act / Labor Laws

Bangladesh labor law encompasses rules and regulations governing all aspects of employment and the relationship between employers and employees. It is based on the Bangladesh Labor Act of 2006 (amended) and Bangladesh Labor Rules of 2015 that govern all laws related to labor and employment, including employee rights, salaries, employee benefits, compensation in case of accidents and injuries, and other employment matters. 

The primary bodies supervising the enforcement and implementation of the labor regulations in Bangladesh are the Department of Labor and the Department of Inspection for Factories and Establishments under the Ministry of Labor and Employment. 

This employment law Bangladesh guide covers the fundamentals of employment in Bangladesh.

Applicability of the Act

With its enormous population of over 160 million, Bangladesh is known for affordable labor, working in agricultural and non-agricultural sectors. According to Bangladesh’s labor law, any individual employed in an industry or establishment as a technical, manual, promotional, skilled, or unqualified works as an “employee,” irrespective of whether or not the employment terms are explicitly stated in a contract or implied.

This work may be temporary, contractual, or permanent, excluding professionals in clerical or managerial positions.

Employment Contract

An employment contract is a legal, written document binding on both the employer and employee. It clearly defines the relationship between them along with the specific details and terms and conditions of employment.

The Bangladesh labor code mandates that an employment contract should comprise all the benefits, rights, privileges, compensations, working hours, job responsibilities, salary, and termination policies.  

Employment contracts in Bangladesh should include the following tenets:

Title of agreement

This mentions the nature of work of the employee, whether temporary or permanent.

Identity of parties

The names of both parties - employer and employee - should be mentioned.

Term or duration

The duration of the contract specifies the period within which the contract is effective and should be mentioned compulsorily.

Place of work

This includes the exact location where the employee is to work.

Job responsibilities

These should be mentioned in detail as per the worker's expectations.

Remuneration

The salaries in sync with the minimum wages of the labor regulations in Bangladesh should be clearly stated. 

Benefits

This should include all mandatory benefits such as sick leaves, casual leaves, maternity leave in Bangladesh for foreigners, festival leaves, and additional bonuses per year. 

Termination regulations

All details according to the Bangladesh employment law termination should be mentioned, whether termination would be with or without notice, duration of the notice period, severance pay, etc.

Dispute resolution

In case of disputes between the two parties (employer and employee), if one is engaged in a breach of conduct, the other party should seek redressal at the Labor Courts of Bangladesh. 

Key Provisions of the Act

According to Bangladesh’s labor law, all employers must follow the federal labor guidelines and rules that state all the conditions of employment. In addition, the country’s labor code allows employees to be associated with and join labor unions under the Employee Rights and Labor Law. 

Here is a glimpse into the core provisions of the labor act rules in Bangladesh.

Types of workers

According to the country’s labor code, employees are categorized into several categories, depending on the condition and nature of work. The categories include apprentice, substitute, casual, probationer, temporary, permanent, and seasonal employees. 

Conditions of employment

Under the 2006 Bangladesh Labour Act, the country’s labor law states specific work conditions to be followed by every employer/company. 

Recruitment

In Bangladesh, no employer can hire employees without providing them with an appointment letter along with a photo-bearing identity card. 

Working hours

The 2006 Bangladesh Labor Act lists the working hours on both a daily and weekly basis along with overtime charges. Accordingly, the daily working hours are 8 hours with one interval, weekly working hours are 48 hours with a maximum of 10 hours per day, and 60 hours per week. Women workers cannot be given shifts between 10 PM and 6 AM without their consent. Road transport workers get 150 hours of overtime every year. The country’s law states they should be given a 24 hours gap between two shifts for night shift employees.

Wages

Wage-related laws under the Bangladesh labor code encompass salary, bonuses, compensation, overtime payments, etc. Accordingly, every worker should be paid before the 7th of every month, and the maximum period would be one month of work. In case of termination, employees are entitled to receive their salary within seven days from the day of termination, irrespective of the dismissal charges. The remuneration payments are always paid on a working day. The mode of payment for salaries should be a cheque or legal tender or through the employee’s bank account. 

Leaves and holidays

Bangladeshi employees are entitled to leaves and holidays, including casual leaves, sick leaves, annual leaves with wages, festival leaves, maternity leaves, etc. Each leave category is allotted a specific number of days per year. For instance, there are ten casual Leaves, 14 days of sick leave with a medical certificate, and industry-specific annual leaves. 

Termination policies

The Labor Act of 2006 lays down reasons or guidelines for termination. If an employee commits a breach of conduct, or any crime/offense, or engages in stealing, bribing, forgery, or deliberate disobedience, they can be terminated with or without notice, depending on the reason for termination and terms of the contract. The employer may or may not charge a penalty. 
In case of retrenchment, an employee should be given at least one month’s notice mentioning the reason for their termination or be paid full salary for the notice period. For employees nearing retirement, employers must offer them a reimbursed compensation of 30 days over their gratuity or annual service. 
For company lay-offs, employees are paid adequate compensation, which is half of their monthly salary and half of any ad-hoc compensation (e.g., dearness allowance, house allowance, etc.).

The Bangladesh employment law concerning termination states that employers a notice prior to termination to the employer. Notice periods may differ in duration depending on the job and industry. For instance, permanent workers serve a notice period of 60-120 days, while for temporary skilled workers, it is 30 days.

Penalties

According to Bangladesh’s labor code, if an employee is found guilty of misconduct, breach of conduct, or any crime through proper evidence, there are appropriate penalties based on the nature of the offense. 

The following penalties are can be meted out according to the Labor Act of 2006:

  • ~Dismissal occurs on multiple grounds like willful disobedience, absence from work without notice for over ten days, theft or forgery, misbehavior in the workplace, etc. For dismissing an employee, the case should be recorded in written format. Also, the employee should be given a chance of hearing for seven days and can only be penalized if proven guilty by the representatives of the Investigation Committee.
  • ~Suspension, which must be informed in writing, may be carried out if the employer feels the crime does not qualify for dismissal. Several additional penalties can supplement suspension, such as withholding wages. The penalty can vary depending on the employee’s history or the severity of their crime. 
  • ~Other penalties include demotion, denying promotion for a year, withholding annual salary increment, fines, suspension without wages compensated by subsistence allowance for seven days, etc. 

Compliance Strategies for Employers

To comply with the labor act rules in Bangladesh, here are some compliance strategies for employers: 

HR management

Having a Human Resource management team eases many business processes as this department effectively manages your employees. HR staffs handles the onus of recruiting the right employees, their training and appraisals, and offering benefits adhering to the labor regulations of Bangladesh. 

Draft employment contract with standard templates

One of the best ways to comply with country-specific laws is to set up industry-standard templates for official documents, including appointment letters, employment contracts, termination letters, etc.

Outsourcing

Outsourcing your HR requirements to a global PEO-EOR firm can streamline your business operations, including employee onboarding, payroll management, international employee management, legal compliance, and much more.

How Can Multiplier Help?

If you wish to navigate through the intricacies of the labor code in Bangladesh, it’s best to partner with Multiplier. Our SaaS-based platform can help you to generate employment contracts in seconds and help you employ talent in Bangladesh compliantly without an entity.

By outsourcing your HR responsibilities to us, you’ll be relieved of the stress of compliance, payroll management, and employee onboarding, to name a few.

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Frequently Asked Questions

Is it mandatory to have a written employment contract?

Yes, according to Section 5 of the Bangladesh labor code, it is mandatory to issue an appointment letter to employees detailing all crucial information regarding their employment, such as employee’s and employer’s name, employee’s address (both present and permanent), designation, job responsibilities, place of work, joining date, etc.

Is there any medical testing to be done before employment?

There is no law in the Labor Act or Labor Rules of the Bangladesh labor code that prohibits or restricts the conduction of medical testing before employment. Therefore, it is up to the employer to make it a mandate and refuse an employee if they fail to submit a medical certificate.

How is overtime pay calculated?

The overtime rate applies to all workers with certain exceptions. Overtime rates are calculated as double the basic wage, dearness allowance, and any ad hoc or interim salary, in case there exists any.

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