Bangladesh Labour Act 2006

Executive Summary:1. Prior  to  the  promulgation  of  the  Bangladesh  Labor  Law  2006,  the  total  number  of  Acts  and  Ordinances in this field was fifty, of which:  • 15 were enacted during the British regime   • 23 were enacted during the Pakistan regime, and   • 12 were passed after the independence of Bangladesh   In  accordance  with  the  ratified  ILO  conventions  and  with  a  view  to  creating  a  constructive  environment,  for  the  elimination  of  the  imbalances  that  prevailed  in  the  issues  regarding  development of congenial relations between workers and employers, information about existing  labor and industrial laws were sought from concerned stakeholders, of both home and abroad .

Increase  of  productivity,  the  enhancement  of  favorable  environment  for  investment,  the  acceleration  of  industrialization  in  the  context  of  the  changed  environment  during  the  post  independence period, were also studied.

To  meet  the  aforesaid  demand,  the  government  formed  a  National  Labor  Law  Commission  in  1992,  with  a  view  to  enacting  a  modern,  up  dated  and  united  labor  law,  headed  by  Justice  Mohammad  Abdul  Quddus  Chowdhury,  along  with  37  other  members  representing  every  concerned quarter.   After two years of exhaustive study, the Commission submitted its report along with a draft of  the unified modern and updated labor law in 1994.  Subsequently,  the  draft  was  reviewed  by  ILO  and  numerous  Employersand  Workers  Associations and other human rights organizations in phases for the last twelve years, and at last  it  was  promulgated  on  the  11th  of  October  2006  as  “Bangladesh  Labor  Law  2006”  under  the  consensus of all the parties concerned.   The salient features of the newly promulgated law are as follows:   • One  single  modern  updated  code  instead  of  the  25  scattered    Acts  and  Ordinances  • There are 354 sections in 21 different chapters in the Law   • The  scope  and  applicability  of  the  law  has  been  extended  and  definitions  of  different terms have been clarified. Ambiguity regarding the age limit of a child  has been eliminated. According to this law any person below the age of 14 shall  be treated as a child.   •

The  issuance  of  an  appointment  letter  and  the  Identity  card  for  a  worker  has  been made compulsory.   • Death benefits have been provided for even cases of normal deaths or in cases  of any deaths due to causes other than accidents during the continuance of the  service.  • The usual retirement age has been scheduled at 57 and at that time the worker  shall be entitled to get all the benefits as are applicable under this law. Even the  case of a workers’ voluntary retirement, after his continuous service of 25 years with  his  employer,  is  also  a  subject  which  will  come  under  this  retirement  benefit.

Child  labor  is  prohibited  even  in  non‐hazardous  regular  work  in  an  establishment.  Appointment  of  adolescent  and  female  workers  is  prohibited  during the nights and in dangerous occupations.   Maternity benefits have been increased to 16 weeks and the qualifying service  length has been decreased to six months, but this  benefit is limited only up  to  the birth of two living infants.   Special  importance  is  given  on  occupational  health  and  safety  and  working  environment.  There  are  78  sections  exclusively  on  it  out  of  a  total  of  354  sections in the law.

Maintenance and preservation of safety record books and introduction of group  insurances have been provided for.   Time  limits  for  payment  of  wages  have  been  determined  and  a  provision  has  been made to realize the unpaid wages through the court.   Provisions  have  been  made  for  the  declaration  of  sector  wise  minimum  wage  rates after an interval of every five years.    Amount of compensations in cases of death or injury because of accidents at the  workplace  has  been  increased.  For  deaths,  the  amount  of  compensation  has  been  ascertained  at  Taka.  100000.00  per  workerand  for  a  permanent  total  disability, the amount fixed is Taka 125000.00 per worker. In case of an accident  that may happen due to employer’s negligence, the compensation amount shall  be double.

No one, other than those in the pay‐roll of the employer, shall be the member or  officer of an establishment based basic trade union.  The purview of unfair labor practices on the part of the workers, employers or  the trade unions has been extended.  Determination of CBA from amongst the establishment based basic trade unions  has  been  made  easier  and  the  period  of  such  determination  has  been  fixed  within a time frame of 120 days.   Industrial  or  craft  Federations  of  trade  unions,  under  certain  conditions,  have  been given the jurisdiction to act as CBA  Provisions  have  been  made  to  form  compulsorily  participation  committees  in  every establishment where 50 or more permanent workers are engaged.

Labor courts shall be the only courts to adjudicate all issues under labor law and  all appeals shall lie to the labor appellate tribunal   Time has been fixed for the adjudication of each and every stage of the cases in  the labor court to accelerate the procedure  Only  the  workers  employed  in  an  establishment,  irrespective  of  their  designation and wage scale are entitled to get the benefits of the participation  fund and the welfare fund developed out of the profit of the company.  Provisions for provident funds have been made for the establishments run under  the private management

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The  punishments  for  the  breach  of  the  provisions  of  the  labor  law  have  been  revised appropriately. Imprisonment has also been provided for along with fines   • A  provision  has  been  made  to  form  a  “National  Industrial  health  and  safety  council”  to  enact  the  national  policy  to  ensure  the  occupational  health  and  safety at the enterprise level.  • Provision  has  been  made  for  the  strict  implementation  of  the“Equal  pay  for  equal amount of work”  policy of ILO convention   • Any  discrimination  or  indecent  behavior  towards  female  workers  has  been  prohibited under the new law.    • Sick Leave: 14 days sick leave with full average wages have been provided, in the  new Labor Law. In previous laws sick leaves were paid for half average wages.

• Annual  leave  with  wages:  For  adults  one  day  for  every  18  (eighteen)  days  of  work performed by him/her during the previous period of twelve months. And  for adolescents one day for every 15 days of work performed by him/her during  the previous period of 12 months.  • Festival Leave: Every worker shall be entitled to eleven days festival leaves in a  calendar year. The Employer shall fix the days and dates of such leaves.

• Children  Room:  A  children  room  for  every  40  female  workers  having  their  children below the age of 6 years have been provided by the law. Previously it  was provided for every 50 female workers.  • Termination  of  employment  by  the  worker:  A  permanent  worker  may  terminate  the  employment  serving  a  30  days  notice  to  the  employer  and  a  temporary worker may terminate it serving a notice of 30 and 14 days case wise.  In lieu of the notice, the worker can even terminate the employment returning  the wages for that period.  • Grievance  Procedure:

Limitation  for  the  application  of  grievance  has  been  extended to a period of 30 days, though previously it was 15 days only.  • Fitness certificate: Previously a fitness certificate was issued by the District civil  surgeon but now it is to be issued by any registered physician at the cost of the  employers.   • Training on the labor law: Arrangements for training on law was never provided  for  but  now  in  this  new  law,  training  arrangement  is  made  compulsory  for  the  laborers.

The worker participating in the training program shall be deemed to be  in his or her official duty during continuance of such training.This unified law is applicable with equal force to all the industrial and commercial establishment  as previous Shops and Establishment Act‐1965 and other labour laws has been abrogated by the  promulgation of this new labour code.

PART 1: WORKING CONDITIONS1.1 1.1.1 WAGES Definition

Provisions of the new labour law: Chapter 10 of the new labour law deals with the provisions related to the wages of the labour. Wages include the following items as per section 120 of the new labour law: Any bonus payable or any other additional wages as per the terms and conditions of the employment; Any remuneration payable during leave, holiday and overtime; Any amount payable against the order of the court or against the award of arbitrator; Any amount payable to the worker against out of the contract between the owner and the worker after the employment is expired by dismissal, discharge, retrenchment, or termination; Any amount payable due to lay off or temporary suspension. The new law has also provided a list of exclusion in section 2(45) to exclude the following accounts head from the term wages: • Expense of housing facilities like lighting facilities, water supply, medical or any other facilities; •

Owners’ contribution to the provident fund of the worker; • Traveling allowances or concessions thereof; • Any other sum paid to worker to cover any special expenses entailed to her/him by the nature of the employment. But, as per different decisions of the courts of Bangladesh, the following items are also treated as part of the wages of a worker: Any amount payable to the worker by the order of the court or the award of the arbitrator shall be treated as the wages; Overtime allowance shall be treated as wages;

Compensation on retrenchment (on ground of redundancy) shall be treated as wages; Allowance during lay-off or temporary suspension shall be treated as wages; Increment shall be treated as wages; Compensation at the expiry of the employment by any means like dismissal, discharge or otherwise shall be treated as wages; Gratuity on discharge or any other gratuity shall be treated as wages; House rent allowances shall be treated as wages;

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Wages during leaves or holidays shall be treated as wages. Changes in the present law: 1. Previous law excluded the gratuity on discharge from the wages of a worker but the new law includes it as part of the wages. 2. The word “gratuity” was never defined anywhere in the earlier labour law but the new law defines it properly in section 2 (10) where it is defined as the amount of the wages of at least 30 days payable to a worker who worked in a factory not less than 6 months at the expiry of her/his employment. 3. Previous law provided only the exclusion list with the definition of the wages but the present law provides both the inclusion and exclusion lists to make a complete sense. 4. Provident fund is considered to be the wages and is payable within 30 days of the expiry of the employment. 1.1.2 Persons responsible for the payment of wages

Provisions of the new labour law: Under the new law the following persons shall be responsible for the payment of the wages of the worker. Owner of the factory; Chief Executive Officer (CEO) of the company; Manager/person assigned responsibility by the company; The Contractor, for payment to workers appointed by the Contractor. Changes in the present law: In case of the failure of the contractor to pay the wages to the worker, the principal owner shall pay the same and subsequently it can be adjusted with the accounts of the contractor. 1.1.3 Fixation of wage periods and time of payment of wages

Provisions of the new labour law: The person responsible for the payment of wages of the worker shall fix a period of wages and accordingly pay it as per the time given in the law. Section 122 guides the paymaster to fix a period not exceeding 30 days and section 123 provides that payment shall be made within seven working days of the expiry of a wage period. Changes in the present law: There is a big change. In previous law, where there is lessthan 1000 workers employed, the employer had to pay before the expiry of the 7th day from the end of the wage period and in the railway or any other factory or industry , the employer had to pay before the expiry of the 10th day from the end of the wage period.

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1.1.4

Deductions from the wages

Provisions of the new labour law: Section 125 of the labour law 2006 deals with the deductions made from the wages of the workers. Following are the deductions valid under the present law: 1. Fines under section 25 (section 25, however, states that no fine shall be allowed more than one-tenth of the total wages receivables by a worker in a particular wage period and no fine for a worker aged below 15); 2. Deductions for absence from duty; 3. Deduction for damage or loss of goods entrusted upon the worker in her/his custody; 4. Deduction for house accommodation supplied by the employer; 5. Deduction for such amenities or services supplied by the employer as the government has authorized; 6. Deduction for recovery of advances or for adjustment of overpayments;

7. Deduction for Income tax payable by the worker; 8. Deduction for subscription to and for repayment of advances from the provident fund 9. Deduction for the payment to the co-operative societies approved by the government. Up to these 9 points the new law remains exactly the same as section 7 of the earlier Payment of Wages Act 1936, but the new law added more deductions like the following: Deductions for the subscription of CBA Union in check-off method; Deduction for any welfare fund formed by the employer and authorized by the Government. 1.1.5

Grievance procedure in case of illegal deductions or delay in payment Provisions of the new labour law: Application by the worker her/himself or her/his successor in case of her/his death; Application to the labour court only; Application within 12 months from the date of such illegal deduction or the date of the payment being due, but the court can take it even after the expiry of the said period; Up to 25% as compensation on the wages due at that time may be ordered; No court fee is payable by the aggrieved worker; rather, if the worker wins the case it is the owner who shall reimburse the payable court fees; Single application on behalf of all the workers so aggrieved.

Changes in the present Law: At present, the Chairman of the Labour Courts is only eligible to hear the cases; Previously, the limitation period was only six months, now it is twelve months.

1.2 1.2.1

WORKING HOURS AND LEAVES Daily hours

Provisions of the new labour code: Section 100 makes a provision of 8 working hours a day for an adult worker, but an adult worker may work 10 hours a day provided all the conditions of section 108 have been fulfilled. According to that section, the employer is required to pay the worker, overtime, double the rate of her/his usual wages. i.e. basic & dearness allowance, if any. The employer is also required to maintain an overtime register as per the law.

Changes in the present law: Daily hours has been reduced to 8 hours-a-day from previous 9 hours-a-day 1.2.2 Interval for rest and meal* Provisions of the new labour code: Interval for rest is provided in the following manner: 1. One hour interval for rest or meal for six hours of work; 2. Half an hour interval for rest or meal for 5 hours of work. Changes in the present law: No change has been made. 1.2.3 Weekly hours**

Provisions of the new labour code: The new law makes a provision of total 48 (forty eight) working hours for a worker, but it can be extended up to sixty hours, subject to the payment of overtime allowances as per section 108 of the law. However, an average of 56 working hours per week in a year for a labour must not be exceeded under any circumstances. But the new law makes a provision for exemption approved by the government if it thinks so fit. Changes in present law:

Exemption clause has been inserted in the new law, by which the government is empowered to exempt any of the factories for the purpose of this rule for a maximum period of six months at a time. 1.2.4 Weekly Holiday*** Provisions of the new labour code: Section 103 of the new labour code makes the provision of one day weekly holiday for all the workers employed in a factory.

* Section 101 of the Labour Law, 2006 ** Section 102 of the Labour Law, 2006 *** Section 103 of the Labour Law, 2006

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Changes in the new law: No change. 1.3 1.3.1 PAID ANNUAL LEAVE Annual leave with wage

Provisions of the new labour law: Section 117 of the new labour law deals with the provisions for annual leave with wages. The section provides as follows: 1) Each worker, who has completed one year of continuous service in a factory, shall be allowed during the subsequent period of twelve months’ leave with wages for a number of days calculated at the rate of i) for adult workers, one day for every 18 (eighteen) days of work performed by her/him during the previous twelve months; ii)

For adolescent worker, one day for every 15 (fifteen) days of work performed by her/him during the previous twelve months. 2) An adult worker shall cease to earn any such leave when the leave due to her/him amounts to 40 (forty) days and an adolescent worker shall cease to earn the said leave when the leave due to her/him amounts to 60 (sixty) days. 1.3.2 Festival holiday*

Provisions of the new labour law: 1) Every worker shall be entitled to eleven days festival-leave for every calendar year. The employer shall, at the beginning of the year, fix the day and date of such leaves. 2) The employer may require any worker to work on a festival holiday provided that two days additional compensatory holidays with full pay and one alternative holiday should be given to her/him under section 103. Changes in the present law:Festival holiday has been increased by a day in the new labour law 2006. 1.3.3 Casual leave

Provisions of the new labour law: Section 115 of the new labour law deals with the provisions for casual leave of a worker. It makes a provision for 10 days casual leave with full wages. 1.3.4 Sick leave **

Provisions of the new labour law:

9* ** Section 118 of the Labour Law, 2006 Section 116 of the Labour Law, 2006

All workers employed in a factory shall be entitled to get 14 (fourteen) days sick leave with full average wages. Provided, such a leave shall not be granted unless a Registered Physician employed by the employer or any other Registered Physician has certified her/his illness. Changes in the present law: Earlier laws provided for the same period of leave with half average wages, whereas, the new law makes provisions for the sick leave to be one with full average wages. The requirement for certification by a Registered Physician does not exist in the earlier laws. However, it has been added to the new law. 1.4 EMPLOYMENT OF FEMALE

Provisions of the new labour law: There are a number of sections where the employment and protection of women have been discussed. The sections are 45, 50, 79, 87, 94, 109, 332 and 345 of the new labour law, 2006. Night-shift work of female workers: Section 109 of the labour law, 2006 creates a bar on the night works of the female workers. The section states as follows: “No female worker shall be engaged for work in any establishment without her consent between 10 pm and 6 am”. 1.5 1.5.1 MATERNITY BENEFITS Maternity leave

Provisions of the new labour code: In section 46 of the new labour law 2006 provisions have been created for maternity leave of 16 weeks (8 weeks before and 8 weeks after the delivery). But the law also makes a provision that no worker shall be entitled to receive the benefit unless she has served under the owner for a minimum period of six months prior to the notice of the probability of the delivery.

Provisions of the previous labour laws: Section 3 of the Maternity Benefits Act, 1939 provides maternity leave of 12 weeks (6 weeks before and 6 weeks after the delivery). Changes in present law: The new law increases the maternity leaves to sixteen weeks from twelve weeks and decreases the duration of the qualifying service period – for availing the benefit – to six months from 9 months. Also, no maternity benefit shall be payable to any woman if at the time of her confinement she has two or more surviving children.

1.5.2

Procedure of payment of the maternity benefit

Provisions of the new labour code: Three options are open to the mothers as per section 47 of the new labour law: 1. The owner shall pay the total benefits payable for the preceding 8 weeks within 3 days from the submission of the certificate of the probability of delivery (childbirth) by a Registered Physician and shall pay the remaining amount after three working days of the submission of the proof-of-delivery. 2. The owner shall pay the benefits payable for the preceding 8 weeks including the day of the delivery within 3 days from the submission of the proof of delivery and pay the remaining within the next eight weeks after the proof of delivery is submitted 3. The owner shall pay all the benefits payable within 3 days from the submission of the proof-of-delivery to the owner. Provisions of the previous labour laws: Previously the procedure was guided by the Maternity Benefits Act. 1939.

Section 5 of the aforesaid Act provided more stringent payment procedure as there was the provision of payment within 48 hours after the certificate from any physician was submitted, whether there remains any working day or not. Changes in the present law: Changes have been made in favor of the management, as the management is required to pay the benefit within three working days. As per the earlier law, it was binding upon the management to pay the benefit within 48 hours only. 1.5.3 Amount of the Maternity Benefits Provisions of the new labour code:

As per sections 48 of the new labour code there is a provision of the payment in terms of daily, weekly or monthly, as and where applicable, average wages. The section also provides the formulae for the calculation of the aforesaid average wages as follows: DAW* or WAW** or MAW*** = The total amount received by the worker during the immediate preceding three months / Total actual working days during that period. Changes brought by the new law: No change has been made. 1.5.4 Benefits in case of the death of mother****

Provisions of the new labour code: The person nominated by the mother who died, or in the case where no such person is nominated, her legal representative, shall be entitled to receive the benefits as described above. Changes brought by the new law: No change has been made. * ** *** **** Daily Average Wages Weekly Average Wages Monthly Average Wages Section 49 of the Labour Law, 2006

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1.6 1.6.1

EMPLOYMENT OF ADOLESCENT Prohibition of employment of children and adolescent

Provisions of the new labour law: Section 34 of the new labour law creates a bar on the appointment of children in any establishment. The section states as follows: • No child shall be required or allowed to work in any factory. • Adolescent workers to carry token: An adolescent who has completed fourteen years of age shall not be required or allowed to work in a factory unless: 1. A certificate of fitness granted to her/him under section 68 is in the custody of the manager of the factory; 2.

Such adolescent carries a token – giving a reference to such certificate while he is at work; 3. Nothing in this section shall be applicable to an adolescent employed in any occupation or in a factory as an apprentice for vocational training; 4. If the Government considers appropriate, it may as well waive the enforcement of the pre-conditions of the employment of an adolescent for a particular period. Child : In the present law child means a person who has not yet completed his fourteen years of age. Adolescent: Adolescent means a person who has completed her/his fourteen years but has not completed her/his eighteen years of age.

Changes in the present law: In the earlier laws, the term “child” was used to mean a person who had not completed 16 years of age and the term “Young Person” was used to mean and include both the child and adolescent. Under the earlier law, even a child could have obtained a fitness certificate to get a job in a factory. But in the new law, child means a person who has completed her/his fourteen years of age and adolescent means the person who has completed sixteen years and has not completed eighteen years of age. The present law specifically prohibits employment of children and makes a provision for fitness certificates for the adolescent only. Exception :

A child who has completed twelve years of age, may be employed in such light work as not to endanger his health and development or interfere with his education. Provided that the hours of work of such child, where he is school going, shall be so arranged that they do not interfere with his school attendance. (as per section 44) 1.6.2 Certificate of fitness Provisions of the new labour law: Section 37 of the new labour law requires an adolescent to obtain a fitness certificate to be employed in any occupation or in a factory. • A registered medical practitioner shall, on the application of an adolescent or her/his parent or guardian accompanied by a document signed by the manager of a factory that 12

such person will be employed therein if certified to be fit for the work he or she has proposed to be employed for, issue a certificate of fitness. • • Such certificate shall be valid only for the subsequent 12 months. The employer shall pay the fees for obtaining such certificate and the fees cannot be realized from the parents or guardians of the worker.

1.6.3 Working hours of adolescent Provisions of the new labour law: Section 41 of the new labour law deals with provisions relating to the working hours of the adolescent. As per the section following points are important and relevant for the RMG industry. • • • • No adolescent shall be allowed or required to work 5 hours a day and 30 hours a week No adolescent shall be allowed or required to work between the hours from 7 pm to 7 am In every factory, the work of an adolescent shall be limited up to two shifts and no such shift shall be more than 7 and a half hours An adolescent can only be appointed in a single relay and such relay shall be changed only with the prior approval of the inspector for once in a month. Restriction of appointment of adolescent in certain work

1.6.4

Provisions of the new labour law: Section 39, 40 and 42 of the new labour law reports some activities for which the employment of the adolescent is strictly prohibited. As per the above mentioned sections, the employment of the adolescent are strictly restricted for the following activities: • • • • Cleaning of the machinery while it is in motion. Lubrication or for other adjustment operation of the machinery while it is in motion. Any work in-between the moving parts of a machine. Any work under ground or under water.

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PART 2: EMPLOYMENT

2.1 Employer Definition in New Labour Law: The Term Employer is defined in section 2, Subsection (XLIX), previously the term was defined in different law for different purposes like for payment of wages, for Employment, for Factories and for Shops and establishment. But the new law provides a single definition to cover all the purposes. As per the above section any person in relation to an establishment who employs workers therein and includes: • An heir, Successor, Assignees, Guardian or legal representative of such persons • Manager or the person responsible for the management and control of the establishment •

The authority appointed by the government or the head of the Ministry or division concerned for the State owned establishment • Officer appointed for the purposes or where no such authority is appointed the CEO of the Local authority for the establishment run by the local authority. • For any other establishment, the Owner of the establishment and every director, Manager, Secretary or the agent of such persons • The person in occupation of the establishment or the person in ultimate control of the establishment

2.2

Forced labour

Provisions of the new labour law: Forced labour is strictly prohibited by the Constitution of the Peoples Republic of Bangladesh. Therefore, any Law approving forced labour is Void ab initio as per the constitutional framework of legislation in Bangladesh. Article 34 of the Constitution of the Peoples Republic of Bangladesh stated as follows: —-“All forms of Forced Labour are prohibited and any contravention of this provision shall be an offence and shall be punishable in accordance with the Law” Again, the two ILO fundamental rights Conventions (nos. 29 and 105) also addresses the abolition of forced labour, and Bangladesh has ratified these two conventions long time ago. But, this constitutional guideline is still ignored in the new Labour Law as the Law has not defined the word forced labour in it and has not provided for the punishment and procedure thereof. 14

Therefore, forcing the worker to work in a factory for days together continuously by the factory owners against their intention should be strictly prohibited and law should address this issue as per our Constitution and ratified ILO Conventions. 2.3 Discrimination

Provisions of the new labour law: Any discriminatory behavior on the basis of sex, color and creed is totally prohibited in any law in Bangladesh. Articles 27 and 28 have provided a guideline to the legislator to make the discrimination free environment in every walk of national life. Section 345 of the new labour law is, however, noteworthy in this connection. The section is stated as follows: “In determination of the wages for a worker or in fixation of the minimum wages equality irrespective of the sex of the worker, shall be maintained.<