Parliament passes labour bill; layoff compensation, trade union rights among key reforms
On 17 November 2025, the draft of the Bangladesh Labour (Amendment) Ordinance, 2025, was approved in principle and finally by the Advisers Council meeting during the interim government.
Parliament today (9 April) passed the Bangladesh Labour (Amendment) Bill, 2026, introducing a wide range of reforms aimed at strengthening workers' rights and aligning the country's labour standards with international norms.
Labour and Employment Minister Ariful Hoque Chowdhury placed the bill in the House to turn the earlier ordinance issued by the interim government into law, with several amendments and additional provisions. The bill was passed by voice vote.
The new law seeks to enact the Bangladesh Labour (Amendment) Ordinance, 2025, which was approved by the Advisers Council on 17 November 2025, and introduces significant reforms to advance the decent work agenda and enhance protection of workers' rights.
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Key reforms on unions, benefits
Under the amended law, trade unions can now be formed with the consent of a minimum of 20 workers, simplifying earlier requirements and expanding freedom of association and collective bargaining rights to previously excluded workers.
However, membership thresholds will vary depending on workforce size – ranging from 20 members for establishments with up to 300 workers to 400 members for those employing over 3,000 workers. The number of trade unions in a single establishment has been capped at three to ensure better governance.
The law also mandates that trade union structures and activities, including executive and general meetings, follow constitutional provisions, with at least one general meeting required annually. Authorities will verify registration through worker lists and digital systems to ensure transparency.
Layoff compensation, service definition clarified
The amendments introduce clearer provisions on layoffs and compensation. Continuous service has been defined as 240 days within 12 months or 120 days within six months. Compensation will be calculated based on last drawn wages and allowances.
Workers registered with at least three months of service will now be entitled to full layoff compensation, while transferred workers with one year of continuous service will not be treated as transfer workers for compensation purposes.
Expanded worker benefits
The law increases maternity leave for female workers from 112 days to 120 days and raises annual festival holidays from 11 to 13 days.
It also requires establishments employing 100 or more workers to form a provident fund or join the national pension scheme upon written request from two-thirds of employees.
Protection against discrimination, harassment
The amendments place strong emphasis on workplace safety and equality. For the first time, "sexual harassment" has been clearly defined, and institutions are required to form complaint committees, with a focus on female representation.
New provisions prohibit both direct and indirect discrimination based on race, gender, religion, disability, political opinion, or social status. Equal pay for equal work has also been reinforced.
Measures against unfair labour practices
The law introduces strict provisions to prevent unfair labour practices and anti-trade union discrimination. Employers are prohibited from blacklisting workers, interfering in union activities, forming employer-controlled unions, or retaliating against workers for filing complaints or participating in legal proceedings.
They are also barred from encouraging rival unions or dismissing union leaders in a discriminatory manner.
A new mechanism empowers authorities to immediately intervene in such cases, order employers to stop violations, and provide compensation to affected workers. New sections have been added to ensure proper handling of complaints related to unfair practices.
Broader labour inclusion, dispute resolution
The amended law expands coverage to include domestic workers, agricultural labourers and seafarers under specific provisions, granting them legal recognition of rights.
It also includes provisions for appointing collective bargaining representatives, forming a national social dialogue forum, and establishing an independent alternative dispute resolution authority to handle labour disputes more efficiently.
Workers' personal data protection has been ensured, and unjust "blacklisting" has been criminalised as an unfair labour practice.
Aligning with global standards
Lawmakers said the passage of the bill reflects long-standing demands of workers and aligns Bangladesh's labour framework with global standards set by the International Labour Organization.
It is also expected to help retain duty-free and quota-free access to the European Union market and support eligibility for GSP+ benefits.
The government hopes the implementation of the law will improve employer-worker relations, reduce industrial unrest, and ensure a more stable and productive working environment, particularly in the country's export-oriented sectors such as garments.
