Labour and Employment Comparative Guide

1 Legal framework

1.1 Are there statutory sources of labour and employment law?

Yes. In Bangladesh, labour and employment matters are primarily governed by the Bangladesh Labour Act, 2006 and the Bangladesh Labour Rules, 2015. These laws comprehensively regulate employment conditions, wages, working hours, workplace safety, termination, industrial relations, and the overall welfare of workers.

However, in areas falling under the Bangladesh Export Processing Zones Authority (BEPZA) labour and industrial relations are governed separately by the Bangladesh EPZ Labour Act, 2019. As a result, the Bangladesh Labour Act, 2006 does not apply within these zones.

In addition, the Bangladesh Labour Act is not applicable to certain non-profit or non-commercial establishment, as specified in Section 1(4) of the Act.

Nevertheless, even in cases where the Bangladesh Labour Act does not formally apply, employers are still required to maintain minimum labour standards in accordance with the Bangladesh Labour Act, 2006. Under Section 3(1) of the Bangladesh Labour Act, 2006, the minimum protections relating to wages, working conditions, and worker welfare operate as guiding benchmarks across all sectors, including those where the Bangladesh Labour Act, 2006 is otherwise inapplicable.

1.2 Is there a contractual system that operates in parallel, or in addition to, the statutory sources?

Yes, a contractual system operates alongside statutory sources. For employment relationships not covered by the Bangladesh Labour Act, 2006 and the Bangladesh Labour Rules, 2015, the individual employment contract is the primary governing document. Furthermore, for roles that are covered by the law, employment contracts and internal HR policies can provide rights and benefits that exceed the statutory minimum standards.

It is critical to note that no employment contract can undermine or circumvent the minimum standards set by the Labour Act. However, employers are free to include additional, more favourable terms that are not inconsistent with the law, such as enhanced bonuses, benefits, or other conditions not explicitly addressed by the statute.

1.3 Are employment contracts commonly used at all levels? If so, what types of contracts are used and how are they created? Must they be in writing must they include specific information? Are implied clauses allowed?

Employment contracts are commonly used along with appointment letters in the formal sector. Appointment letters are mandatory for all categories of workers under Bangladeshi labour laws. However, in practice, a significant portion of the workforce in the informal sector continues to work without formal written agreements, as nearly 85% of workers are engaged in informal employment.

The Bangladesh Labour Act, 2006 recognises several distinct types of employment. The most common type for regular staff is the permanent or indefinite employment, which has no fixed end date and continues until it is terminated by termination simpliciter, retirement, resignation, discharge, death or dismissal as prescribed by law.

In contrast, temporary employment is used for specific projects, peak seasons, or to replace a permanent employee on leave. These contracts cannot be longer than 6 (six) months at a stretch.

Also, another common form of employment contract, is through a contracting agency, wherein the workers are employed through a third-party contractor. In this arrangement, significant responsibilities to ensure compliance with labour laws is on the third-party contractor, including regarding wages, working conditions, and other benefits.

According to Rule 19 of the Bangladesh Labour Rules, 2015, every employer must issue a written appointment letter at the time of employment.

The appointment letter must include key details such as:

1. the worker's full name, parents' names, and spouse's name (if applicable);
2. present and permanent address;
3. designation, nature of work, and date of joining;
4. category of employment (e.g., apprentice, temporary, or permanent);
5. wage or salary details, including rate and increment;
6. other financial benefits such as house rent, medical, education, food, travel, and festival allowances; and
7. a statement confirming that the terms of employment are governed by applicable service rules and the Bangladesh Labour Act, 2006.

While certain implied terms such as mutual trust, good faith, and duty of care are recognized under general contract principles, they remain subordinate to statutory provisions. Any express or implied clause conflicting with the Bangladesh Labour Act, 2006 or Rules promulgated thereunder is deemed void and unenforceable.

2 Employment rights and representations

2.1 What, if any, are the rights to parental leave, at either a national or local level?

The Bangladesh Labour Act, 2006 provides the right to maternity leave for female workers. As per Section 45 to 47 of the Act, every female worker is entitled to maternity leave and benefits if she meets the qualifying conditions. However, there is no provision for paternity or parental leave for male employees under the current law. Some private organizations, especially in the banking and corporate sectors, voluntarily provide paternity leave for male employees through internal HR policies, but it is not a statutory right.

If a female worker has a miscarriage she shall be entitled to leave with wages at the rate of maternity benefit for a period of four weeks immediately following the day of her miscarriage.

2.2 How long does it last and what benefits are given during this time?

As per Section 46 of the Bangladesh Labour Act, 2006, a female worker is entitled to 120 days (four months) of paid maternity leave, which includes at least 21 days preceding the probable date of delivery. The employer is legally bound to provide full wages for this period, subject to the condition that the worker has been employed for at least six months immediately preceding the expected date of delivery. During this period, she cannot be dismissed, discharged, or otherwise penalized by the employer.

2.3 Are trade unions recognised and what rights do they have?

Yes. Trade unions are recognized under Sections 175–218 of the Bangladesh Labour Act, 2006. Workers in any establishment or group of establishments have the right to form and join trade unions for the purpose of regulating relations between workers and employers.

Where 20 or more workers are employed, the formation of a trade union becomes permissible. The required number of workers consent depends on the size of the establishment. Under the law, 20 workers may form a trade union in establishments employing between 20 and 300 workers. In establishments with 301 to 500 workers, at least 40 workers are required to form a trade union. For establishments employing 501 to 1,500 workers, a minimum of 100 workers consent is needed. In establishments with 1,501 to 3,000 workers, 300 workers must consent, and in establishments with more than 3,000 workers, at least 400 workers are required to form a trade union.

Recognized trade unions are entitled to collective bargaining rights, representation of workers in industrial disputes, and negotiation of agreements with employers. The Labour Act also protects trade union members from unfair labour practices, including victimisation, discrimination, or dismissal due to union involvement or activities.

2.4 How are data protection rules applied in the workforce and how does this affect employees' privacy rights?

Under Bangladeshi law, there is no fully enacted comprehensive data protection statute that exclusively regulates the processing of employee personal data. However, significant developments are underway, the government has approved the draft Personal Data Protection Ordinance, 2025 (PDPO 2025), which if promulgated will establish a legal framework regulating how personal data is collected, stored, processed, transferred and disposed of including by both private employers and public sector bodies.

In the employment context, while the specific law is pending, employers are still expected to comply with general obligations under the Bangladesh Labour Act, 2006 (and associated rules) regarding record-keeping and confidentiality of worker data. Many larger multinational or locally leading firms supplement these statutory obligations with internal privacy or confidentiality policies aligned with international standards to safeguard sensitive employee information (e.g., health records, financial details, disciplinary data).

2.5 Are contingent worker arrangements specifically regulated?

Yes, to some extent. The Bangladesh Labour Act, 2006 (Section 4) recognizes several categories of workers, including permanent, temporary, casual, apprentice, substitute, probationer, and seasonal workers. Temporary workers are engaged for work that is essentially short-term (less than 6 months), while casual workers perform ad-hoc or irregular tasks. Apprentices are employed for training and receive allowances during their training period and substitutes temporarily fill in for permanent or probationary employees. Probationers serve in permanent posts under a probationary period (typically 3–6 months, depending on skill level), after which they may be confirmed as permanent employees. Seasonal workers are employed for specific work seasons, with preference often given to those employed in the previous year.

3 Employment benefits

3.1 Is there a national minimum wage that must be adhered to?

Yes. Under Section 138 of the Bangladesh Labour Act, 2006, a statutory body called the Minimum Wages Board is constituted by the Government. The Board recommends and declares minimum wage rates for different sectors and classes of workers. Once approved by the Government and published in the official Gazette, such minimum wages become legally binding on all employers in that industry or sector. Employers are obliged to comply with the gazetted minimum wages, and payment of a lower wage constitutes a punishable offence under the Act.

3.2 Is there an entitlement to payment for overtime?

Yes. Under Section 108 of the Bangladesh Labour Act, 2006, where a worker works more than the prescribed hours under the Act or Rules, the employer must pay overtime wages at the rate of twice (2x) the ordinary rate of basic wage plus dearness allowance and any ad-hoc or interim allowance.

3.3 Is there an entitlement to annual leave? If so, what is the minimum that employees are entitled to receive?

Yes. Under Section 117 of the Bangladesh Labour Act, 2006, every worker who has completed one year of continuous service in an establishment is entitled to annual leave with wages, calculated as follows:

• One day's leave for every 18 days of work performed, in the case of a worker employed in a shop, commercial, industrial establishment, or factory, or a road transport establishment.
• One day's leave for every 22 days of work performed, in the case of a worker employed in a tea plantation.
• One day's leave for every 11 days of work performed, in the case of a newspaper worker.

3.4 Is there a requirement to provide sick leave? If so, what is the minimum that employees are entitled to receive?

Yes. Under Section 116 of the Bangladesh Labour Act, 2006, every worker is entitled to sick leave with full wages for 14 days in each calendar year. Unused sick leave cannot be carried forward to the next year.

3.5 Is there a statutory retirement age? If so, what is it?

Yes. Under Section 28 of the Bangladesh Labour Act, 2006, a worker employed in any establishment shall automatically retire (ipso facto) upon reaching the age of 60 years. However, the employer may re-employ a retired worker on a contractual or temporary basis if mutually agreed. Upon retirement, the worker becomes entitled to benefits such as gratuity or provident fund, where applicable under company policy or law.

4 Discrimination and harassment

4.1 What actions are classified as unlawfully discriminatory?

Under Section 291 of the Bangladesh Labour Act, 2006, any discriminatory or unfair labour practice committed by an employer, worker, or trade union is a punishable offence. This includes anti-trade union discrimination or unfair labour practices as described in Sections 195, 196, and 196A of the Act. Specifically, it is unlawful to:

• Discriminate against a worker for participating in or joining a trade union.
• Dismiss, discharge, or otherwise prejudice an employee for union activity or lawful participation in collective bargaining.
• Treat any employee unfairly based on sex, race, trade union affiliation, or other unjustified grounds.
• Terminate the employment of a women during pregnancy and ensure entitlement to maternity benefits

Punishment may include imprisonment up to one year or fine up to BDT 100,000 (approximately USD 850), or both.

4.2 Are there specified groups or classifications entitled to protection?

The Bangladesh Labour Act, 2006, generally provides equal protection to all workers, without discrimination on the basis of sex, religion, race, caste, nationality, or political belief. While there is no distinct classification system, certain groups receive additional statutory protections, including:

• Women workers: Protections such maternity benefits and safeguards during pregnancy.
• Workers with disabilities: Employers must give preference to disabled workers in training and accommodation and cannot assign them to dangerous work.

4.3 What protections are employed against discrimination in the workforce?

The Bangladesh Labour Act, 2006 ensures several statutory protections to prevent discrimination in employment:

• Section 345: Ensures equal wages for equal work irrespective of gender.
• Sections 45-50: Protect women from discrimination during pregnancy and ensure entitlement to maternity benefits.
• Section 195: Prohibits discriminatory action against workers involved in trade union activities.

The Act prescribes specific penalties for unfair labour practices or discriminatory conduct by employers, which may include imprisonment for up to three months, a fine of up to BDT 50,000 (approximately USD 425), or both.

4.4 How is a discrimination claim processed?

If a worker experiences discrimination or any unfair treatment that constitutes an offence under the Bangladesh Labour Act, 2006, the worker must first file a written complaint to the employer within 30 days of learning of the cause of complaint, either by registered post or by direct submission (with written acknowledgment). The employer is then required to investigate the matter and communicate a written decision within 30 days after giving the worker an opportunity to be heard. If the employer fails to respond within this period or if the worker is dissatisfied with the decision, the worker may submit a complaint before the Labour Court within the next 30 days. Upon receiving the complaint, the Labour Court will hear both parties and may issue appropriate orders such as reinstatement, payment of arrear wages, or other suitable remedies. Any party aggrieved by the Labour Court's decision may appeal to the Labour Appellate Tribunal within 30 days, whose decision shall be final. Notably, no court fee is required for such complaints or appeals under this section.

4.5 What remedies are available?

Depending on the nature of the claim, the Labour Court or competent authority may provide the following remedies:

• Reinstatement or re-employment of an unlawfully terminated worker.
• Payment of compensation or arrears of wages and benefits.
• Correction of discriminatory decisions (e.g., denial of promotion, pay inequity).
• Payment of maternity or other statutory benefits wrongfully denied.

Imposition of fines or criminal penalties against employers for unfair labour practices.

4.6 What protections and remedies are available against harassment, bullying and retaliation/victimisation?

Bangladesh provides multiple statutory, criminal, and constitutional protections against harassment, bullying, and retaliation or victimisation in the workplace, such conduct is recognised as a punishable offence under the Bangladesh Penal Code, 1860. Victims of these acts may file a complaint with the Police Station or the Magistrate Court for appropriate legal action. Following the 2009 High Court Directive in Bangladesh National Women Lawyers Association (BNWLA) V. Government of Bangladesh and the Bangladesh Labour Act, 2006, has been amended guidelines on Sexual Harassment for all workplaces. As a result, the guidelines operate as binding standards for employers and serve as the primary framework for addressing workplace harassment, discrimination, and related misconduct.

The Bangladesh Labour Act contains several provisions addressing violence and harassment at work. Section 2(52A) of the Act defines violence and harassment, expressly covering workplace sexual harassment, bullying, discrimination, and other abusive behaviour and section 332 further places a general responsibility on all individuals within the workplace to prevent and combat such misconduct. Under Section 332A, every employer is required to establish a Discrimination, Violence and Harassment Complaints Redressal Committee. The committee must consist of five members, with a majority of women, and must be chaired by a woman. Two members must come from organisations working on gender issues or sexual harassment. The committee is responsible for receiving, investigating, and resolving complaints while ensuring confidentiality, dignity, non-retaliation, and a zero-tolerance approach. Upon receiving a written complaint, the committee must take action as prescribed in the Labour Rules.

5 Dismissals and terminations

5.1 Must a valid reason be given to lawfully terminate an employment contract?

No. Under the Bangladesh Labour Act, 2006, an employer can terminate a worker's employment without assigning a valid reason under Section 26 of the Bangladesh Labour Act, 2006. The notice period for termination under Section 26 is 120 days and the compensation for termination is payable at the rate of 30 (thirty) days wages for every year of service.

However, note that the law also recognizes several lawful grounds for termination of service such as dismissal for misconduct, discharge for physical or mental incapacity and retrenchment for redundancies and resignation at the option of the employee each with specific procedural requirements to ensure fairness and due process.

5.2 Is a minimum notice period required?

Yes. A minimum notice period is required under the Bangladesh Labour Act, 2006 for most forms of separation, except in cases of dismissal for proven misconduct. The required notice periods differ depending on the mode of separation:

• Termination without cause (Section 26): 120 days written notice (or wages in lieu) for monthly-rated workers and 60 days written notice (or wages in lieu) for other categories of workers. The employer must also pay compensation equal to 30 days wages for every completed year of service or gratuity (if applicable), whichever is higher.
• Retrenchment (Section 20): 1 month (30 days) written notice to the worker, or wages in lieu of notice. The employer must also notify the Government or Labour Office in the prescribed form before retrenchment.
• Discharge (Section 22): A worker discharged due to physical or mental incapacity must be given notice or wages in lieu equivalent to the notice periods required under Section 26 (120 days for monthly-rated workers, 60 days for others). Such workers are also entitled to the same compensation as under Section 26.
• Resignation (Section 27): A permanent worker must give 60 days' notice if monthly-rated and 30 days' notice if other categories of workers. If the worker fails to provide the required notice, the equivalent wages for the notice period may be deducted.
• Dismissal (Sections 23–24): No notice period is required if dismissal is for proven misconduct and due process is followed. If misconduct is not proven or procedure is defective, the dismissal may be treated as illegal.

These notice requirements are mandatory, and failure to comply can result in penalties or remedial orders from the Labour Court.

5.3 What rights do employees have when arguing unfair dismissal?

Under the Bangladesh Labour Act, 2006, a worker who believes they have been unfairly or unlawfully dismissed has the right to challenge the dismissal. The process generally begins with the worker submitting a written complaint to the employer within 30 days of learning about the cause of dismissal. If the employer fails to resolve the matter within 30 days, or the worker is dissatisfied with the employer's decision, the worker may file a formal complaint before the Labour Court within the next 30 days.

The Labour Court may investigate the claim and, if it finds the dismissal to be unjust, discriminatory, or without valid reason, it can order one or more of the following remedies, reinstatement of the employee with or without back wages, conversion of dismissal into a lesser disciplinary measure (such as a warning or suspension) or compensation or damages in lieu of reinstatement.

5.4 What rights, if any, are there to statutory severance pay?

Employees are entitled to statutory severance pay (compensation) under the Bangladesh Labour Act, 2006, depending on the mode of termination:

• Termination simpliciter (Section 26): A permanent worker must be paid 30 days wages for every completed year of service or gratuity (if applicable), whichever is higher, in addition to all other dues.
• Retrenchment (Section 20): A worker retrenched due to redundancy or shortage of work is entitled to 30 days wages per year of service, subject to proper notice and "last in, first out" principle.
• Discharge (Section 22): If a worker is discharged for physical or mental incapacity, they are entitled to similar compensation as provided in Section 26.
• Resignation (Section 27): A worker who resigns under Section 27 is entitled to all earned wages, leave encashment, and any applicable gratuity, provided proper notice is given. Additionally, Section 27(4) entitles permanent workers to statutory compensation based on their length of service: 7 days wages per completed year for those employed for at least three years, 15 days wages per year for workers with more than three but less than ten years of service, and 30 day' wages or gratuity (whichever is higher) per completed year for workers with ten years or more. This compensation is provided in addition to all other benefits under the Act.
• Dismissal (Sections 23–24): If a worker is dismissed for proven misconduct following due process, they are not entitled to severance compensation but must receive earned wages and accrued leave benefits. If misconduct is not proven or procedure is not followed, the dismissal may be treated as illegal termination.

These payments are considered mandatory statutory entitlements, and failure to comply can result in penalties or Labour Court orders against the employer.

6 Employment tribunals

6.1 How are employment-related complaints dealt with?

Employment-related complaints in Bangladesh are adjudicated by the Labour Courts, which have jurisdiction over all disputes arising under the Bangladesh Labour Act, 2006. According to Section 33 of the Act, any worker including one who has been laid-off, retrenched, discharged, dismissed, removed, or otherwise terminated may submit a written complaint to the employer within 30 days of becoming aware of the cause of the complaint. The employer must then inquire into the matter and provide a written decision within 30 days of receiving the complaint. If the employer fails to respond within this period or if the worker is dissatisfied with the decision, the worker may file a formal complaint before the Labour Court within 30 days thereafter. Upon receipt, the Labour Court issues notice to both parties, hears their statements, and passes an order deemed just under the circumstances, which may include reinstatement, payment of arrears, or conversion of dismissal into a lesser penalty. As per Section 219, such complaints or appeals must be made in the prescribed form and include details such as the names and addresses of the parties, the legal provisions invoked, and the relief sought. Any party aggrieved by a Labour Court order may appeal to the Labour Appellate Tribunal within 30 days, and the Tribunal's decision is final.

6.2 What are the procedures and timeframes for employment-related tribunals actions?

Under Section 216(12) of the Bangladesh Labour Act, 2006, the Labour Court is required to deliver its judgment, decision, or award within 60 days from the date of filing the case. However, if it is not possible to issue a decision within that timeframe, the Court may, by recording valid reasons in writing, extend the period by an additional 90 days, as permitted under Section 216(13). The process generally involves filing a written application, serving notice to the opposite party, presenting evidence and witness testimony, and concluding with the Court's judgment or award. Appeals from Labour Court decisions may be made to the Labour Appellate Tribunal, which also follows a similar timeframe and procedure as prescribed by law.

7 Trends and predictions

7.1 How would you describe the current employment landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

The employment landscape in Bangladesh remains largely informal, with nearly 85% of the total workforce operating without formal contracts or access to social protections. While the ready-made garments (RMG) sector continues to dominate employment, emerging industries such as ICT, services, and small-scale enterprises are gradually transforming the labour market. A 2025 report by the Labour Law Reform Commission proposed several key reforms, including introducing a universal definition of "worker" to encompass both formal and informal employment, establishing a digital ID system, and creating a central registration database. However, challenges persist as of mid 2025, over 20,000 labour-related cases remain pending in the country's 13 labour courts and appellate tribunal, with more than 13,000 delayed beyond the statutory resolution period of 60 to 150 days, leaving justice out of reach for many workers.

Over the next 12 months, Bangladesh is expected to witness significant legislative reforms aimed at strengthening labour rights and workplace protections. Proposed amendments to the Bangladesh Labour Act, 2006, include simplifying trade union registration by allowing 20 workers to apply, recognizing household staff and domestic workers as employees entitled to labour rights, and extending benefits such as provident funds or pensions to all workers. The government also plans to harmonize labour regulations in Export Processing Zones (EPZs) and is taking steps toward ratifying ILO Conventions 121 and 189, which address occupational safety, compensation for employment injuries, and domestic worker protection. Although these reforms signal progress toward better compliance and inclusivity, enforcement capacity and implementation consistency remain critical challenges for the near future.

8 Tips and traps

8.1 What are your top tips for navigating the employment regime and what potential sticking points would you highlight?

Navigating the employment regime in Bangladesh requires a strong understanding of both statutory obligations and practical workplace realities. Employers should ensure full compliance with the Bangladesh Labour Act, 2006, the Bangladesh Labour Rules, 2015, and any sector specific regulations. Key priorities include maintaining proper employment records, issuing appointment letters and ID cards to all workers, ensuring timely payment of wages and benefits, wage registers, attendance records and strictly adhering to occupational safety and health standards as labour inspectors routinely review these documents during audits. Employers are also encouraged to establish internal grievance-handling mechanisms and adopt clear anti-harassment and equal opportunity policies, as these are increasingly emphasized by regulators and international buyers. From a compliance perspective, companies should prioritize:

• Timely payment of wages within seven working days after the wage period (Section 123).
• Proper calculation and documentation of overtime with double pay (Section 108).
• Formation of participation committees and safety committees in establishments with 50 or more workers, as required by law.
• Annual health and safety audits to prevent liabilities under occupational safety provisions.
• Women worker protections

In practice, the most common compliance pitfalls in Bangladesh include improper termination procedures, failure to provide the required notice or compensation, and inadequate documentation of disciplinary actions all of which may result in reinstatement orders or monetary penalties from the Labour Courts. Another persistent challenge is the misclassification of workers, particularly where contract or casual employees perform continuous work that legally qualifies them as permanent under Section 4(7) of the Labour Act, 2006.

Employers should also note that labour authorities, including the Department of Inspection for Factories and Establishments (DIFE) and the Minimum Wage Board, are becoming more active and coordinated in enforcing compliance standards. With the proposed amendments to the Labour Act expected in 2025, companies are strongly advised to conduct periodic reviews of their HR and compliance policies to ensure alignment with the evolving regulatory framework. However, several sticking points remain in practice. Frequent legislative amendments can cause uncertainty in implementation, and enforcement gaps often lead to inconsistent compliance across sectors. The processes for trade union registration and dispute resolution also remain slow and bureaucratic, contributing to worker dissatisfaction and potential unrest. Therefore, maintaining proactive legal compliance, ensuring transparent and fair employment practices, and staying informed of ongoing labour law reforms are essential strategies for effectively navigating Bangladesh's complex and evolving employment landscape.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.