As a corporate lawyer, I often advise my clients regarding various issues relating to commercial employment in the light of Bangladesh Labour Law.
Most frequent queries are relating to the issues like “leave” and “service benefits”. In this Article, I will describe the types of leaves and other service benefits with all necessary details which are applicable under Bangladesh Labour Act 2006 read with Bangladesh Labour Rules 2015.
There are 3 types of leaves which an employee/worker is entitled as per Bangladesh Labour Act (hereinafter BLA) 2006. They are namely (i) casual leave, (ii) sick leave and (iii) annual Leave. As per Section 115 of BLA 2006 every worker shall be entitled to casual leave for 10 days with full wages in a calendar year. Such leave shall not be accumulated and carried forward to the succeeding year. As per Section 116 of BLA 2006, except a newspaper worker, every worker shall be entitled to sick leave with full wages for 14 days in a calendar year. Such leave shall not be accumulated and carried forward to the succeeding year. As per Section 117 of BLA 2006 every adult worker who has completed 1 year of continuous service in an establishment shall be allowed, during the following period of 12 months, 1 day leave for every 11-22 days of work (depending on the nature of establishment). If a worker does not, in any period of 12 months, take the leave either in whole or in part, to which he is entitled to, such leave shall be added to the leave which he is entitled to in the succeeding 12 months. The total number can be up to maximum 60/80 days (depending on the nature of establishment). It is also pertinent to mention that if a worker/employee takes one day leave then only one day leave will be counted. Whether the one day leave has been availed on Sunday or Thursday is not relevant. However, if any holiday occurs into the annual leave granted shall be included in such leave.
Apart from leaves, there are 2 types of holidays namely (i) weekly holidays and (ii) festive holidays. Labour Law mandates that every worker is entitled to one day holiday in a weak [Section 103]. In addition to that every worker shall be allowed in a calendar year 11 days of festival holiday with wages [Section 118]. Furthermore, there is a provision of maternity benefit for female workers under BLA 2006. Every woman worker, after completing six month tenure, shall be entitled to 16 weeks maternity benefit [Section 46]. The total leave period is to be 8 weeks preceding the expected date of delivery and 8 weeks immediately thereafter. This benefit applies with full payment as per the average of her daily income. This benefit will not be applicable if there are 2 or more surviving children.
Now let me shed some light regarding encashment of un-availed leaves. A worker can only apply for encashment of his earned leave i.e. un-availed annual leave. Furthermore, only 50% (maximum) of the earned leave can be encashed and it can be encashed once in a year. If any annual leave is due to a worker and he has resigned or retrenched, discharged, dismissed, terminated or retired from his service, then he shall be entitled to receive wages in lieu of un-availed leave at the rate he is entitled to the payment of wages during the period of leave in accordance with the provisions of Bangladesh Labour Act.
As per Act an employer must make payment for the un-availed leaves as aforesaid as per definition of wages. However, at the time of making payment deductions can be made in the following, inter alia, circumstances (i) fine imposed under Section 25, (ii) deduction for unauthorized leave, (iii) deduction for damage or loss of any goods under custody of the worker/ loss of money and (iv) deductions from wages for recovery of loans or advances.
Now I would like discuss about few related benefits like (i) provident fund, (ii) gratuity and (iii) Workers Participation Fund (WPF). As per BLA 2006 private companies can set up provident fund for the benefit of the workers. The fund will be governed in the light of Section 264 of BLA 2006 and Provident Funds Act 1925. This is a directory provision. Furthermore, the definition of wages provided in Section 2(45) of BLA 2006 expressly excluded the provident fund. Therefore, it is explicit that the law does not make it compulsory for the employer to set up a provident fund.
As per Section 2(10) of BLA 2006 gratuity is payable to a worker on termination of his employment provided he completed required tenure of service. The Act also provides that in certain situations, such as death, retrenchment, discharge or termination of employment, a worker is entitled to compensation or gratuity, whichever is higher. Therefore, it is apparent that the employer must set up a gratuity fund for its employees.
A worker may also be entitled to Workers Participation Fund (WPF), if applicable to the establishment. As per Section 232 of BLA 2006 the WPF shall apply to a company or establishment which fulfills any one of the following conditions, namely: (i) the amount of its paid-up capital on the last day of its accounting year is not less than taka 10 million; (ii) the value of its permanent assets on the last day of the accounting year is not less than taka twenty million. If any company matches the above two requirements then WPF will be applicable.
Author: Syed Emran Hossain