Labour law overhauled: 20 workers can now form trade union, workers can't be blacklisted

Highlights

• Trade unions can be formed with as few as 20 workers
• Previous 20% threshold requirement removed
• A single factory may have a maximum of five trade unions
• Stricter measures against sexual harassment introduced
• Establishing provident funds or enrolling workers in pension scheme made mandatory
• Advisory Council approves 184 changes to labour law  

The interim government has approved the Bangladesh Labour Act (Amendment) Ordinance, simplifying the process of forming trade unions even with 20 workers and bringing several new sectors under its legal protection. 

The practice of blacklisting workers – a long-standing method by which employers barred certain employees from future jobs based on allegations – has been made entirely illegal.

The revised law was approved today (23 October) at a meeting of the Advisory Council, chaired by Chief Adviser Muhammad Yunus. Following the meeting, Law Adviser Asif Nazrul briefed reporters at the Foreign Service Academy in the capital.

An official from the labour ministry provided the breakdown of the new minimum thresholds required for trade union registration in a factory, stipulating that the minimum required number of workers to form a union is 20 (for 20-300 total workers), 40 (for 301-1,000 workers), 300 (for 1,001-3,000 workers), and 400 (for 3,001 or more workers).

A maximum of five trade unions will be allowed within a single factory, he said.

While the amendments have been welcomed by labour rights advocates, employers' groups have expressed reservations about removing the previous 20% threshold requirement for union formation.

The labour ministry official said that a total of 184 changes have been incorporated into the revised labour law.

The revised law made it mandatory for private-sector employers to establish provident funds or enrol workers in a universal pension scheme.

'This is a historic law'

Asif Nazrul said the new labour law has significantly broadened the definition of labour, ensuring that categories of workers who were previously excluded – including those employed in non-profit organisations, domestic service, and the maritime sector – will now enjoy the same legal rights and protections as other workers.

"This is a historic law," Asif Nazrul said. "It is a milestone in protecting the rights of every worker in the country, especially those who were outside the scope of the law until now."

The law also introduces stricter measures against sexual harassment and enhances maternity welfare benefits for women workers.

"Maternity benefits for female workers have been increased, and the law now explicitly prohibits any wage discrimination between men and women performing the same job," Asif Nazrul said.

Additionally, the formation and registration of trade unions has been made easier, while alternative dispute resolution (ADR) mechanisms have been strengthened to enable workers and employers to settle disputes without going to court.

To ensure accident compensation, the government has approved the creation of a special fund dedicated to supporting workers and their families in cases of workplace injury or death. The fund will provide for rehabilitation and medical treatment for affected workers.

"This law attempts to make the worker-employer relationship more humane and equitable. This is not just the start of a new era for workers, but for the entire industrial sector," Asif Nazrul said.

Mixed reactions from stakeholders

Fazlee Shamim Ehsan, president of the Bangladesh Employers' Federation, told TBS, "If a factory with 1,000 workers is allowed to form a trade union with only 40 employees, it will undermine the trade union culture."

He added, "The government is trying to appease foreign interests, but this shows incompetence and poor judgement. The interim government will eventually leave, but this law could create long-term instability."

However, labour leader Kalpona Akter, executive director of the Bangladesh Centre for Workers Solidarity, welcomed the reform, saying, "If monitoring is strong and both workers and employers understand the law equally, I don't see any harm in allowing union formation with 20 workers."

She, however, cautioned that removing the previous 20% threshold requirement for unionisation must be accompanied by strict oversight to prevent unrest in the industrial sector.

Other approvals

The Advisory Council today also gave final approval to the draft of the Representation of the People (Amendment) Ordinance, 2025 (RPO).

Additionally, the government gave in-principle approval to the drafts of four ordinances. These are: the Supreme Court Secretariat Ordinance, 2025, the Anti-Corruption Commission (Amendment) Ordinance, 2025, the July Uprising Memorial Museum Ordinance, 2025, and the Spatial Planning Ordinance, 2025.