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Analysis: Current and Pending Labour Legislation of Bangladesh

or
A review of current Labour Act, 2006, its amendments, and rivate sector
accords with analyses outlining the imlications for wor!ers rights and
imroved wor!ing conditions for wor!ers in the "#$ sector%

&ame of Consultant: A% '% #% &asim, (r% Counselor, )he (olidarity Center%
*ate: +une ,2, 20,-%

The labor legislation of Bangladesh mainly deal with the workers employed in the formal
sectors. A vast majority of the workers employed in informal sector remain outside of the ambit
of the labour laws of the country. Up until 200! there were more or less thirty separate laws
which related to labour issues in the country. To simply the labour laws and make a
comprehensive single labour code! the "overnment formed a commission namely the #abour
#aw $ommission! %&&2 with members from employers and workers! as well as "overnment
representatives and legal e'perts. Based on the report submitted by the commission on (%st
)arch! %&&* and followed by long discussions with the +mployers and ,orkers! "-B passed
the #AB-U. A$T! 200 on the %%th -ctober! 200 repealing the e'isting 2/ laws of the
country.
This Bangladesh #abour Act! 200 deals with the employment of labour! relations between
workers and employers! determination of minimum wages! payment of wages and
compensation for injuries to workers! formation of trade unions! raising and settlement of
industrial disputes! health! safety! welfare and working conditions of workers! and
apprenticeship and matters ancillary thereto.
Although! the Act was passed in 200! no rules under this law have yet been made! the
conse0uence of which the proper implementation of the law is being hampered. The rules made
under the previous repealed laws although remain in force! but those are considered insufficient
for the proper implementation of the B#A! 200.
1n 200&! the "overnment of Bangladesh initiated a process to amend the Bangladesh #abour
Act! 200 following the demands mainly from the labour unions to make it consistent in the line
of the 1#- $onventions! which are ratified by Bangladesh. The labour unions particularly
demanded that workers must be allowed to e'ercise their rights to organi2e themselves and
collectively bargain in the line of the 1#- $onventions 34 and &3.
The filing of the "56 petition of the American 7ederation of #abor and $ongress of 1ndustrial
-rgani2ations 8A7#9$1-: alleging violation of domestic labour laws and internationally
recogni2ed labour standard in readymade garments industry before the U5T. to withdraw the
"56 benefits as well as the possible establishment of Better ,ork 6rogram in Bangladesh by
1nternational #abour -rgani2ation have added the urgency on the "overnment for 0uick
passage of labour law amendment. 7ollowing a series of deadly industrial accidents! the
"overnment of Bangladesh has been left with no choice but to move towards passing of the
amendment in a faster pace.

Amendment in Bangladesh Labour Act, 2006:
A proposal of the )inistry of #abour and +mployment to amend the B#A was approved by the
$abinet on %( )ay 20%(! which is now in the parliament for final enactment. 1t is e'pected that
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amendment shall be passed in the budget session of parliament in the last week of ;une 20%(.
According to the "-B! the amendment proposal of the B#A 200 will ensure workers< welfare!
rights and safety= industrial safety and e'pansion of the industry= transparency in Trade Union
registration and wage payment system= and promoting trade unionism and collective
bargaining. The amendment will make the B#A! 200 more in conformity with the international
labour standards. 1t is the hope of the "overnment that this amended law will improve the
working conditions at enterprise level through social dialogue and better understanding among
the workers and employers.
Under the amendment proposal! 4 articles 8out of (/* articles of the B#A! 200: are to be
amended and 4 new articles are to be included. 5ome of the key features of amendments are>
8%: .mloyment through /utsourcing Comany> ,hat?s more! the series of deadly
industrial accidents have also left the "overnment of Bangladesh with no choice but to move
towards passing the amendments in a faster pace.
82: Bar in engaging temorary wor!er in ermanent wor!: An establishment shall not
be entitled to employ any temporary 8i.e. casual or daily basis or contractual worker: in any
permanent work and shall not be able to contract out any work to any other establishment or
person if such work is essentially permanent in nature for that establishment.
8(: $ratuity to 0or!ers> All workers who have been working up to %2 years in a factory
will received (0 days? basic salary as gratuity for each completed year. The gratuity money will
be increased to */ days? basic salary for those workers who have been working for more than
%2 years in a factory.
8*: 1ormation of )rade 2nions: -n the registration process! the amendment will removed
the re0uirement of the @irector of #abour! on receipt of the registration application! to send a
copy thereof along with the list of officers of the union to the employer concerned for
information. This was a longstanding demand of the unions.
8/: Particiation Committee> The workers representatives in the participation committee
shall be elected by the by the workers. 1n the absence of trade union in an establishment!
workers representatives in the participation committee of an establishment shall act as $BA! till
a trade union is formed in that establishment.
8: 0elfare Board and 0elfare 1und> .)" sector will be e'empted from the application
of $hapter AB of the Act. As a result the .)" employers are no longer re0uired to distribute
/C of the profits to the workers of their establishments. 1n place of profit sharing! a new
provision for creating of a welfare fund for the workers has been incorporated in the proposed
amendment.
84: 0or!ers3 (afety> The factory owners will ensure safety of the workers by providing all
personal protection e0uipments. They will have to ensure secured power system! ensure that
the e'it paths are unlocked and the staircasesDpaths in the factories are kept open during the
working hours to meet any emergency. A new provision for keeping consistency between the
structural design of the building and factory lay9out has also been included in the amendment.
1t will be mandatory for every factory to keep its workers abreast of work risk8s: with a view to
securing occupation health and safety of the workers.
83: (afety Committees: 5afety $ommittees will have to be formed in the factories having
more than /0 workers. The security staff employed in the establishment must be provided
training on fire safety. 8subject to framing of rules:
8&: $rou insurance: "roup insurance will have to be made in those factories where a
minimum %00 workers have been working. The factory will ensure that insurance money are
paid within &0 days of the claiming of the money.
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8%0: 4ealth Centre5s67Clinic: The owners will have to setup a permanent Eealth
$entre8s:D$linic to ensure the health of workers at the factory where /!000 or more workers
are employed.

8mact of the roosed Amendment on the "#$ sector%
The new amendments may have considered a positive step towards making the labour law
evenhanded and well9timed but in reality the implementation of some of the provisions still
remain reliant to the succeeding framing of rules by the government. 1t is disappointing to note
no rules under the B#A have yet been framed even with the passage of an inordinately
lengthen period of seven years of enactment of the B#A.
The amendments have still been unsuccessful to meet the terms with the most basic standards
set out by the 1#-! particularly as regards a basic issue like the workers< right to form union in
the establishment. The registration of the union will yet remain at the mercy of the @epartment
of #abour 8the F@#G:. The proposed amendment will not lessen the @#<s enormous discretionary
powers while according registrations to the unions. 5o! the @# still has the scope of being
guided by his whims and caprices in disposing of the application for registration of unions.
The proposal of increasing FgratuityG in the amendment will curve no niche in improving the lot
of workers. ,ithout effecting corresponding modifications in other relevant sections of the law!
the amendment will earn no benefit to the workers rather be rendered nearly of no use. 1t is
either an unhappy drafting or not well9thought9out or might be a deliberate attempt to mislead
the workers.
A close scrutiny will also reveal that in many important areas! the employers are being given
undue benefits over the interests of workers. The amendment to the law would rather take
away some of the workers< rights which had even e'isted in the 200 law. 5ome of the
e'amples are9
8a: $urrently! a worker who is dismissed for misconduct is entitled to compensation 8H %* days
wages for every completed year of service. A worker! however! shall not be entitled to any
compensation if he is dismissed for committing theft! fraud or dishonesty in connection with the
employer<s business or property. Iow "-B proposes that a worker shall also not be entitled to
any compensation if he is dismissed for misconduct for riotous or disorderly behavior in the
establishment or for arson! vandalism or for preventing others to work. The concern is that the
employer will now have the wider opportunities to deprive the workers of their end service
benefits saying that the misconduct is of Fdisorderly behaviorG.
8b: 6resently! the B#A re0uires .)" company to establish a ,orkers< 6articipation 7und and a
,orkers< ,elfare 7und and pay every to the 6articipation 7und! and the ,elfare 7und five
percent of its net profits with the workers. 1n fact! this has been in prevalence since %&3 and
continued under the erstwhile Fthe $ompanies 6rofits 8,orkers< 6articipation: Act! %&3.
The .)" employers have been refusing to comply with these provisions while the unions were
demanding implementation of this law. BrandsDBuyers also have started demanding
implementation of this law. 1nstead of implementation! "-B is now proposing to e'empt the
.)" from its application.
8c: This amendment is eliminating the e'isting scope of the union leaders to represent
workers in conducting their cases in the #abor $ourts. This will force the workers to be
e'clusively dependent on the professional lawyers! who are usually very e'pensive.

Bangladesh 1ire and Building (afety Accord
After the .ana 6la2a collapse Bangladesh 7ire and Building 5afety Accord! more commonly
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called the "eneva Accord or the +U Accord! has been put together. 1n fact! planning for this
accord had started some time ago! initially as a "1J plan= the work was then e'pedited
following the Ta2reen factory fire. $learly! the horrific .ana 6la2a collapse e'patiated the
process further with many major international companies! alongside 1ndustriA## "lobal Union
and UI1 "lobal Union! agreeing to work together to implement the accord as 0uickly as
possible.
5ince last April 2*! appro'imately *0 global fashion companies that work with suppliers in
Bangladesh have signed on this the Accord. 5ome of the leading global brands and retailers are
6BE 8world<s largest shirt9seller:! EK) 8largest global buyer from Bangladesh:! Tesco 8third9
largest retailer in the world:! 1ndite' 8world<s largest fashion retailer! owner of FJaraG and many
other brands:! and several others. Eowever! brands like! ,almart and "ap! refusing to sign!
announced that they would develop their own nonbinding safety code.
This Accord re0uires signatory companies to take certain steps to implement and maintain
safety standards within their Bangladeshi suppliers< workplaces. The Agreement! in substance!
commits signatory brands and retailers to three things> 8%: participating in the governance and
development of an effective fire and building safety program= 82: funding the administration
and operation of the program<s inspection! reporting and training elements= and 8(: re0uiring
their supplier factories< remediation of safety ha2ards identified through the program<s
inspections and financing this remediation to the e'tent that contract suppliers lack the
financial means.
+ach signatory company shall contribute funding for these activities in proportion to the annual
volume of each company<s garment production in Bangladesh subject to a ma'imum
contribution of L/00!000 per year for each year of the term of this Agreement.
The agreement establishes a permanent bilateral F5teering $ommitteeG to monitor
implementation of the agreement. The representatives on the 5teering $ommittee are
appointed in e0ual numbers by! on one hand! the signatory companies! and! on the other hand!
the global unions who signed the agreement. The committee will be chaired by a person
nominated by the 1nternational #abour -rgani2ation.
Eowever! the Bangladesh Accord is still in its formative stages. The signatories have agreed to
develop and agree an 1mplementation 6lan within */ days of signing this Agreement. 1t is also
yet to be worked out how local unions and government of Bangladesh shall be involved in the
implementation process
1t is hoped that this Accord will contribute to creating safe working conditions in the garment
industries in Bangladesh. But at the same time this Accord is full9si2e! wide and a comple' one.
The Accord runs the risk of becoming a victim of its own success.

Conclusion: The proposed amendments lack compliance the basic standards set out by 1#-
particularly when it relates to main issue of workers< right to union. The proposed amendment
wants to ensure smooth formation of the trade unions in the sector! which may contribute in
reducing the discrepancy between the growth of the garment sector and compliance issues. But
the issue of FregistrationG should be liberali2ed and got it freed from any trickery. The sector
improves but the life style of the workers does not. To reduce the incidents of workers unrest in
the factories! the adjustments of their salaries in view of the inflation of every year is also
needed! but unfortunately which we will continue to miss this in our labour law. The new
amendment will again not provide any protection to the worker from being stripped off the right
of becoming member of a trade union of a factory in the event he loses the job.
,orkers in garment sectors are still some of the lower wage earners in the world! living and
working in deplorable conditions in the face of unapologetic e'ploitation. Unless concrete steps
are taken to safeguard the security of the workers! both in terms of physical and livelihood! the
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whole .)" sector<s future will remain at stake. Bangladesh 7ire and Building 5afety Accord is a
noble initiative on the part of the buyers and global unions. But it remains to be seen how
effectively this e'ternal initiative is integrated locally.
1mportantly! strict and timely monitoring of the compliance including factory inspection shall
have to be ensured and a new provision of stringent punishment for the delin0uent officials!
which is presently missing in B#A! has to be added to the law. At last not least! the proposed
amendment needs to be intensely discussed as an attempt to have the amendments flawed
free and pragmatic for betterment of all concerned.