Bangladesh’s model employment code needs stronger safeguards

When a Bangladeshi worker is hired, they sign a simple agreement. However, once hired, there is little to no protection from employers. This problem needs a solution. One possible solution could be a new labour law that gives Bangladeshi workers basic protections.

Bangladesh's current labour laws were designed to protect workers, but many jobs fall outside their scope. Many people work for insurance firms, IT companies and NGOs. They carry job titles such as manager or administrative assistant. Because their jobs don't fit the traditional definition of "worker," they have few, if any, legal protections. If the new rules do nothing for those people, the exercise is little more than a paper tiger.

Getting this right also matters for investment. The UN designated Bangladesh a Least Developed Country (LDC) back in 1975. That status has long qualified us for special trade terms with developed countries, including duty-free access and other export preferences. But that chapter is closing. Bangladesh graduates from LDC status on 24 November 2026, though the timeline has been recommended for a three-year extension.

To keep preferential access to the European market afterwards under the GSP+ scheme, the country must ratify and implement a long list of international conventions on labour rights, human rights, the environment, and good governance, including the core ILO standards.

On top of that, the EU's Corporate Sustainability Due Diligence Directive now requires large companies to check working conditions across their entire supply chain. Firms buying from Bangladeshi suppliers increasingly have to show their investors how well those suppliers meet international labour standards. So the pressure on Bangladesh to set a credible national minimum standard, one that lets companies operating here report compliance, is only growing.

Investors look for stability and predictability. By establishing a fair way to resolve employment disputes, reducing turnover through stable practices, and creating an environment where companies can hire and retain qualified people with minimal dispute-resolution cost, Bangladesh can build a real advantage in attracting foreign direct investment.

The Government of Bangladesh has now published a model employment code. It includes provisions for written appointments; a ban on discrimination; due process before disciplinary action; a comprehensive anti-harassment framework; 120 days of paid maternity leave; and a prohibition on blocklisting. These are positive steps toward a more secure and equitable workplace.

However, the model code has significant limitations. 

As drafted, it is voluntary. Employers are encouraged to use it as a template, but they need not adopt it. So an employer may offer good wages and generous holidays out of their own goodwill, but until it is offered voluntarily, the employee has no entitlement to it. Once that principle is accepted, the list of shortcomings grows quickly.

For example, the code provides no provision for an overtime premium. Overtime is permitted up to 60 hours a week, and workers under the Labour Act earn double for excess hours, yet the model code imposes no matching duty on employers to pay a premium.

Similarly, although permanent employees should not be dismissed without reasonable grounds, the code still lets employers terminate them without stating any reason and without a severance package. By contrast, ILO Convention 158 requires a valid, reviewable reason for termination and a genuine opportunity for the employee to defend themself.

Maternity leave runs for 120 days, but it comes with a discriminatory catch: a woman who already has two surviving children loses the benefit, and men receive no paternity leave at all.

Festival bonuses are restricted to "no more than one month." That makes the code a ceiling rather than a floor. The correct formulation should be "at least," not "at most."

Whistleblower protection, the right to disconnect during off-hours, and limits on personal data collection and workplace monitoring appear in almost none of the drafts submitted so far.

Finally, and most critically, there is no clear line between "employees" and "officers" or "consultants." Because no rule defines these categories, an employer can move an employee out of protection simply by handing over a new title.

So what would make the code genuinely protective? I propose three tests. 

As drafted, it is voluntary. Employers are encouraged to use it as a template, but they need not adopt it. So an employer may offer good wages and generous holidays out of their own goodwill, but until it is offered voluntarily, the employee has no entitlement to it. Once that principle is accepted, the list of shortcomings grows quickly

First, employers must provide minimum rights to all employees. Second, employers must not have unfettered discretion over how they use their powers. Third, every right must come with a way to enforce it. These principles suggest practical solutions.

First, instead of publishing the code as a voluntary guide, the Government should issue it as a binding statutory minimum standard, in line with the labour law amendment that already took effect in 2026.

Second, both "employee" and "officer" must be defined by a person's actual duties and functions, not by job title, and the employer must bear the burden of proving that someone is genuinely an officer or consultant rather than an employee.

Third, repeated renewals of a fixed-term contract should count as proof of permanent employment, which is exactly the safeguard ILO Convention 158 expects against the misuse of temporary contracts. The Contract Act 1872 should remain the residual law for employment disputes, including Section 27, under which a post-employment non-compete clause is already void and unenforceable.

Set overtime at double the regular rate for clarity; to stop gratuity and provident-fund entitlements from being hollowed out, require basic salary to be at least 50% of total pay; provide a minimum annual increment tied to inflation; add a Bengali New Year bonus alongside the two festival bonuses, all set as minimums; extend the 5% profit-participation scheme to all levels; settle outstanding dues within 30 days, with penalties for late payment; raise suspension subsistence to at least 75% of base pay; and cap misconduct investigations at 30 days.

Guarantee two weekly rest days; remove the restriction that denies maternity benefit to mothers with two or more children; add at least fifteen days of paid paternity leave, plus paid leave for caregivers, bereaved parents and adoptive parents; require large employers to run childcare facilities; provide secure transport for women working after dark; let employees convert unused leave into cash; and formally recognise flexible and remote work.

Lower the provident-fund threshold so lower-paid staff are included, and make the fund portable; require group health coverage from small and medium enterprises upward; implement the mandatory group life and accident insurance already required under labour law; and route injury compensation through the recently created workplace accident fund.

Build an internal appeals route, from supervisor, to a grievance committee, to an external body, the Alternative Dispute Resolution Authority, before the labour court; cut the misconduct-investigation window from sixty days to thirty; and let employees file complaints electronically.

Senior officers deserve fair treatment too. They should get the same core protections as their teams: indemnity for acting in good faith, a documented-dissent defence, the right to refuse unlawful orders, and equal notice on both sides.

None of this is hostile to business. Employers have every right to measure performance, discipline wrongdoing on the evidence, restructure when they genuinely must, and protect trade secrets. As long as the exercise of those rights has a reason, follows a procedure, rests on evidence, stays proportionate to the offence, and allows an appeal, the outcome is not an imbalance. It is balance.

A final word on the process. This draft must not be finalised on the strength of employer submissions alone. Employee representatives, HR professionals, civil society and researchers must be at the table. Otherwise, we will produce a one-way regulation that will only confirm what your readers may already suspect: that this was never designed to benefit workers.

Sketch: TBS

Subail Bin Alam is an engineer-economist and policy analyst. Email: contact@subail.com 

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.