No headway in implementing unemployment insurance

Seven years have passed since the issue of unemployment insurance was incorporated into the National Social Security Strategy formed by the government in 2015, but it has not come into effect yet.

Sources in the know about the matter say the kind of legal framework or workers' database required for this has not been done yet. 

Besides, most workers and employers do not know anything about the matter. There is no outline of how it will be implemented, they add.

Entrepreneurs in the industrial sector say the initiative of unemployment insurance is good, but it will not be possible to implement it without a reliable database of workers. 

At a ceremony on Thursday, labour and employment ministry secretary Md Ehsan-E-Elahi announced plans to begin work on creating a database of workers.

An event organised by the International Labour Organisation (ILO) at a hotel in the capital discussed why the unemployment insurance programme could not be implemented even after work on it started a few years ago, the reasons behind it and the way forward for its implementation.

RAPID Chairman MA Razzaque presented a preliminary feasibility assessment paper on behalf of the ILO at the event titled "Towards improved unemployment protection in Bangladesh".

An analysis of the paper shows that no such work has been done in the last seven years.

Besides, there have been a lot of talks about introducing an injury insurance scheme in factories but it has not seen the light of day yet.

Unemployment insurance provides unemployment benefits to eligible unemployed workers

Unemployment insurance provides unemployment benefits to workers who have lost jobs. Eligible workers will get a part of their previous salaries for a certain period. As a result, even if someone suddenly becomes unemployed, he or she will not fall into financial problems with their family members.

While presenting the paper, Razzaque said initially, it will not be possible to bring all the workers under this scheme. Therefore, it can be started with the workers engaged in the country's formal sector. Employees currently working in more than 40 formal sectors account for 14.9% of the total workforce.

At present, 4.6% of workers in the agricultural sector, 10% of the workers in the industry and 28.2% in the service sector are employed in the formal sector.

Unemployment insurance has been introduced in India, Vietnam, Japan, Kuwait, Malaysia, Korea, Saudi Arabia, Thailand and several other countries.

He suggested launching the scheme in Bangladesh based on the experience of India, Vietnam and Thailand.

"There is no legal basis for unemployment insurance in our country yet, and neither the factory owners nor the workers are aware of it," he told The Business Standard.

He said not all workers will be unemployed at once. But everyone will be included in this scheme. Those who are unemployed will receive a portion of their last workplace salary for a fixed period.

Fazlee Shamim Ehsan, vice-president at Bangladesh Knitwear Manufacturers and Exporters Association, told TBS, "We appreciate the initiative of unemployment insurance. But it is not possible to start this programme without a legal basis and workers' database. For this, the work on creating a database has to be done first."

According to the paper presented by Razzaque, this type of insurance usually involves the financial participation of workers and employers. In some countries, the government also has its part in it.

The labour secretary said a database of all types of workers would be created to bring workers under social protection. He also said this feasibility study of ILO will help them in this regard.

Sources said as the initial action of the government has not made the expected progress, a new action plan has been fixed for the next five years from 2021.