Companies in profits, yet ignore donation to labour fund

The Bangladesh Labour Welfare Foundation, meant for providing grants to informal workers, has received a poor response since its inception in 2006, with many companies in profits refraining from donating to it in defiance of the law.

This has caused many workers to lose out on financial support they are badly in need of.

Over the last 16 years, only 230 companies out of 5,000 donated Tk612 crore to the foundation. On the other hand, the welfare association too seems to have acted slowly as it has so far sent letters to only 350 companies for their non-submissions.

According to the Bangladesh Labour Act 2006, companies have to spend 5% of their net profit for the welfare of their workers and 10% of this portion has to be submitted to the welfare fund.

The Department of Inspection for Factories and Establishments prepared a list of 5000 companies that have the capacity to provide funds to the association. 

To force them to give a portion of their profits to it, the labour welfare association is now going to take a hardline as it has decided to sue the profit-making companies that show reluctance and ignore the law.

Welfare foundation officials say they had prepared a list of 500 companies in the first phase. They will try to ensure donation submissions from all profitable companies by this year. They will primarily contact the companies and request them to follow the law. If any company ignores the law, they will lodge cases against them.

Gokul Krishna Ghosh, acting director general at the Bangladesh Labour Welfare Foundation, told The Business Standard that as per the law, every forcompany is bound to submit a portion from their profits to the fund. But unfortunately, many companies are reluctant to do so.

"We have requested the National Board of Revenue to check during payment of taxes if the companies have clearance from us. The donation document's submission should be mandatory for them," he said.

"We have also asked government and private audit companies not to complete their reports before getting the labour welfare foundation's clearance," he added.

Over 250 listed-companies in profits

The number of companies listed on the Dhaka Stock Exchange (DSE) stands at 348 listed. Of them, 90, including 60 from textiles, are in losses, while more than 250 companies are making profits, according to sources at the DSE. 

The Registrar of Joint Stock Companies and Firms offices sources said they have provided licences to at least 1.5 lakh companies across the country.  

Md Nasir Uddin Ahmed, inspector general at the Department of Inspection for Factories and Establishments, told TBS that they have started a drive against the companies who do not submit required donations to the welfare fund. 

Sources at the labour and employment ministry say Grameenphone alone has given Tk183 crore to the welfare fund. Besides, British American Tobacco Ltd, Unilever Bangladesh Ltd, RobiAxiata Limited, and Walton Group have donated Tk70 crore, Tk56 crore, Tk16 crore and Tk14 crore, respectively.

The foundation has thus far provided Tk39.47 crore to 10,640 labourers for treatment purposes, Tk4.68 crore to 1,277 working-class children for their higher education, and Tk5.81 crore to 564 labourers' families after their deaths in workplace accidents.

The government started to provide assistance to labourers and their family members from the fund in the fiscal 2013-14.

Donations very low against demand

As many as 12,000 labourers and their families out of several millions got support from the foundation since 2013. But there are over 5 crore labourers in formal and informal sectors in Bangladesh. 

According to Bangladesh Institute of Labour Studies, 1,053 labourers died in the workplace. The number was 513 in 2020, 1,200 in 2019 and 1020 in 2018.

But there is no government data on how many labourers died after being injured in the workplace and outside. 

According to labour organisations, the number of deaths is almost above 10,000 and at least 50,000 get injured every year. But labourers hardly get any compensation. They blamed a lack of initiatives on the part of the government to ensure compensation. 

Many workers are still in the dark about the welfare fund too owing to a lack of publicity by the Ministry of Labour and Employment.

Fahad, a student of Islamic University in Kushtia, lost all hopes of continuing his study after his father passed away. Physically-challenged Fahad was a second-year student then.

He had no way of paying his tuition fees as he did not know about the Bangladesh Labour Welfare Foundation scholarship.

"I decided to give up on education as there was no one to support me financially. But, my friend's father provided information about the fund and after I applied for the scholarship and received the money within a short time, it changed my life," he added.

Abdur Razzak, general secretary of the ImaratNirmanShramik Union Bangladesh, told TBS that it will be enough if the companies submit a portion of their profits to the foundation's fund properly. He sees a lack of government plan in this regard.

They have been demanding for workplace safety, introduction of a pension scheme and rationing system, Tk15 lakh compensation for death, and Tk20 lakh for lifelong injuries. But they are still fighting to have their demands fulfilled, he said. 

If the companies submit money to the fund, their demand can easily be met, he noted.

"Working-class people are mostly uneducated. We sometimes ask them to apply for assistance from the fund but many of them seldom follow our instructions," he said.

Golam Murshed, managing director and chief executive officer at Walton Hi-Tech Industries Ltd, told TBS, "It is our responsibility to submit a portion of profits to the welfare fund."

"We will continue to donate to the foundation in the greater interest of the country," he added. 

Professor Dr Selim Raihan, executive director of the South Asian Network on Economic Modelling, told TBS that every company should follow the law and submit money from their profits to the labour welfare foundation. If anyone does not do so, they just ignore the country's law. 

"The government should take stern action against those reluctant companies. The companies are depriving the labourers of their rights," he said.