Factory Act Abstract:

Factory means any premises where five or more workers ordinarily work on any day of the year and in
part of which a manufacturing process is being carried out, but does not include any mine. (Bangladesh
Labour Act,2006)

The factory premises should be occupied by the owner and he has to declare the land as his own or
company property before establishing the factory.

According to Factory Act 1979

(1) There shall not be any construction or extension of any factory unless previous permission in
writing is obtained from the Chief Inspector for such construction or extension.

(2) All applications for permission shall be made in Form No. 1 which shall be accompanied by
the following documents, namely-

(a) a flow chart of the manufacturing process supplemented by a brief description of the
process in its various stages;

(b) plans in duplicate showing-

o (i) the site of the factory and its immediate surroundings including adjacent
buildings and other structures, roads and drains; and
o (ii) the plan, elevation and necessary cross-sections of the various buildings drawn
to scale indicating all relevant details relating to construction of walls, roofing,
natural lighting, ventilation and means of escape in case of fire, the position of the
plant, machinery, aisles and passage ways; and

c) such other particulars as the Chief Inspector may require.

(3) The Chief Inspector, if satisfied, shall, in returning to the applicant one copy of the plan
submitted under sub-rule (2) and subject to such conditions as he may specify, approve the plans
of construction or, as the case may be, the extension of a factory, or may call for such other
particulars as he may require to enable him to approve the plan.

(4) No deviation of any kind from approved plans shall be made without the written permission
of the Chief Inspector.

4. The occupier of every factory shall submit to the Chief Inspector an application in Form No. 2,
in duplicate, for its registration and grant of license,-

(a) in the case of a factory already in existence and engaged in manufacturing process,
within six months from the date of coming into force of these rules, and
 (b) in the case of a factory coming into existence and engaging in manufacturing process
on or after the coming into force of these rules, within at least thirty days before the
factory resumes working.

5. (1) Every license for a factory shall, on the payment of the fees specified in the Schedule
below, be granted by the Chief Inspector.

The inspector is responsible to gather all the information related to the factory. Like: factory
area, workers details, power used in the area etc.

After getting approval from the inspector and getting clearance from the Certifying Surgeons the
occupier of the factory need to notify the Government in a writing manner in the official Gazette
within 6 months of publication if no objection comes from any party then it is assumed that the
Factory is now legally carry the manufacturing process to that particular factory premises.

Minimum Wages Abstract:

there are 7 grades of workers in the garments industry. Minimum wage of 7th grade worker in the
garments industry is given below:

Basic Salary + House rent + Medical Allowance + Transport Allowance + Food Allowance

BDT (3000 + 1200 + 250 + 200 + 650) = 5300 BDT

Yearly incentive=5%.

source: Minimum Mage 2013, Risebd.com

The Payment of Wages Abstract:

There are 3 methods of Wage payment:

1. Time Rate Plan: Under this method the worker is paid at an hourly, daily or weekly rate
and his remuneration, thus, depends upon the time for which he is employed and not
upon his contribution to production.
Calculation of Earnings:
Earning= clock hours work * rate per hour
or
Earning= No of days worked * Rate per hour

Time work is most suitable for the two extreme grades of workers like: the highly skilled
and the unskilled including learners and apprentices

2. Price Rate: This system is also known as payment by result. Under this system the
payment of wages is based on performance.

3. Incentive wage plan: Premium Bonus Systems are variations of the piece rate systems
and they mainly differ in showing of bonus. The mechanism of this system is that the
results of efficiency are shared by the employer and employee on some agreed basis.

Manufacturing industry in Bangladesh generally fixed the wage rate by negotiating

between parties. Generally in case of manufacturing industry time rate plan is followed.

The payment of the workers should be paid within the 7th day after completing of the
month. The overtime and other incentives should also be added and cleared timely. The
record of receiving money should be kept in the Pass book of the worker.

The allowances and facilities may differ for union and non union workers. The facilities
should be cleared to all the workers from the employer side.

The payment of gratuity Abstract:

The Labour Law-2006 defines 'gratuity' as wages payable on termination of employment of a

worker which shall be equivalent to not less than 30 days' wages for every completed year of
service or for any part thereof in excess of six months; it shall be in addition to any payment of
compensation or payment in lieu of notice due to termination of services of a worker on different
grounds.
In 2013, the cabinet approved the Bangladesh Labour (Amendment) Act-2013, specifying claim
of gratuity for the workers.

As per the amended law, all of the workers who have been working up to 12 years in a factory
will get one month's basic salary as gratuity for each year.

The amount of gratuity will be increased to one-and-a-half months' basic salary for those
workers who have been working for more than 12 years in an industry.

Those workers who have been working for at least six months to one year will also get one
month's basic salary as gratuity.

But there is no rule regarding Gratuity for this reason organization do not follow or pay
accordingly. The minimum gratuity fund should be cleared from both parties.

Gratuity should be given to the worker on time. Additionally if a worker wants to take the
gratuity payment in advance it should be allowed from the company in case of emergency.

The Maternity Benefit Act Abstract:

According to the Labour Law 2015 Maternity leave is 6 months paid leave for an employee. A worker or
employee can join anytime but she cannot do heavy work for 10 weeks before and after of delivery
time. The employee or worker cannot work before and after delivery for 8 weeks.

Entitlement of Maternity Benefit:

To be entitled to maternity benefit, a women needs to work for the employer for at least 6 months
immediately preceding the day for her delivery.

Despite working for more than 6 months a women is not entitled to maternity benefit if she has 2 or
more surviving child.

Payment of Maternity Benefit:

After giving notice to the employer orally or written any day, she may nominate a person to receive the
to receive payment of maternity benefit in case of her death.

If not given such notice, and she has delivered a child, she shall give similar notice to her employer

within 7 days that she has given birth to a child. (Section 47, BLL, 2006)
Amount of maternity benefit:

the wage is calculated as per the previous 3 months payment of the worker in daily, hourly or monthly
basis.

Calculation of maternity benefit:

Total wage earned during the previous 3 months

..................................................................................... *112
No of days she actually worked during those 3 months

The Payment of Bonus Abstract:

To receive the bonus the worker needs to be a permanent worker. No other workers are allowed to get
bonus.

As per the new rules of Bangladesh Labour Law 2015, the festival bonus will not be more than
the basic salary it should be equivalent to basic salary and the worker has to work at least 1 year
as permanent worker. . The bonus % varies company to company. Even if any factory is giving more
than basic they can also change their policy according to Rules. Everything is acceptable which
is not more than basic.

ESI Abstract:

EPF Abstract:

EPF means Employee Provident Fund. In Bangladesh government employees are entitled to receive a
provident fund but for private employees there is no fixed rules and regulations so they are not bound
to pay provident fund to the employees or workers in monthly basis.

Form 11:

The Employees' Provident Fund Organisation (EPFO) has decided to use new F-11 composite
form, which is a declaration document filed by employee through employer to provide details like
bank account number so that the provident fund will transfer to the account automatically after
retirement or even changing the job.

How PF Auto Transfer Works Through Form 11

1) After joining a new organization, the new employee has to fill and submit details through the
new Composite Declaration Form 11, wherein the joinee has to fill personal details and other
details about previous employment. The new joined has to also fill in UAN (Universal Account
Number) and previous provident fund number.
2) The employer enters the information as given in Form 11 in the employer's portal.

3) The data is then validated with the information available against the UAN and in case of any
discrepancy, the employer has to verify/update the information provided.

4) In case, the earlier UAN was Aadhaar seeded and verified, the declaration by the employer of
transfer request made by the employee in Form-11 will trigger an auto-transfer process which
will transfer the accumulations against his previous provident fund account (PF ID) to the new
provident fund account. Form No. 13 is not required to be submitted in such cases.

5) An SMS informing the subscriber about the proposed auto-transfer will be sent on his
registered mobile number.

6) Auto transfer will be completed only after the member does not request to stop the proposed
auto-transfer (either online, or through employer or at the nearest EPFO office) within 10 days of
the SMS, and the first contribution by the present employer is deposited and reconciled.

7) On transfer of the account, the new employee will be communicated by SMS on his mobile
number seeded against the UAN and by e-mail, if registered.

8) Auto transfer of previous PF account would be possible in respect of Aadhar verified

employees only. In case the earlier UAN was not seeded with Aadhaar or UAN was Aadhaar
seeded but not verified, the member needs to apply for transfer in Form-13 as the existing
procedure for physical transfer would be followed.

sources:

http://www.accountingnotes.net/cost-accounting/labour/top-3-methods-of-wage-payment-cost-
accountancy/4592

https://risebd.com/2013/12/08/gazette-minimum-wage-2013/

https://www.bankbazaar.com/saving-schemes/epf-form-11.html