Outsourced workers in the eyes of Bangladesh's labour law

Organisations within Bangladesh are opting to outsource the security, cleaning, product packaging, labelling, product delivering and transportation of their day to day business, apart from other high end or specialised sectors, such as HR consultancy or management, found a study published in Journal of Business Studies, titled 'Human Resource Outsourcing in Bangladesh: An Empirical Study'. 

Outsourcing is a strategy in which companies use outside people to carry out certain tasks of their own. To do this a company may hire a party outside a company, and the latter's employees are not affiliated with the company. This is usually a cost-cutting measure. 

There is however a question about the status of these kinds of workers in Bangladesh's legal setting. A writ filed by Grameenphone in the Supreme Court of Bangladesh deals with this question (Grameenphone Ltd Vs Chairman, First Labour Court, Dhaka & ors 10 SCOB [2018] HCD).

A conflict arose when 'outsourced' workers asked to be treated as permanent workers, and access to the facilities of permanent workers at Grameenphone (GP). These workers used to drive company cars for GP. Smart Services Limited (SSL)/Jamsons International (Jamsons) were the companies engaged in supplying workers through whom the drivers (respondents of the writ) got employed in GP.

The drivers, on several occasions, requested GP to treat them as its permanent workers, although they refused to do so. Eventually, the workers filed petitions under Section 213 of the Labour Act in the Labour Court for a direction upon GP to treat the drivers as permanent workers.

GP contested the drivers' positions before the Labour Court by filing written statements denying the material allegations made in the petitions contending, inter alia, that there was no contractual relationship between GP and the drivers, who were engaged by SSL/Jamsons to render services for them on 'outsourcing basis' as employees of SSL/Jamsons. 

SSL/Jamsons were being paid by GP for the service. In addition, with the payment made by GP in lieu of the service, SSL/Jamsons paid the salaries and other benefits to the drivers. The drivers came to court to be treated as 'Permanent Worker' under section 4(l)(Cha) of the Sromo Ain, 2006 and proved that they were driving motor vehicles of GP for a continuous period of two to 10 years on the date of filing cases in the lower court, and which was admitted by all the parties. 

Permanent workers have certain rights conferred upon them through the Labour Act. Under section 26(4), when the employment of a permanent worker is terminated, they are to be paid by the employer a certain amount of compensation, in addition to any other benefit to which they are entitled to. The same goes for a worker's resignation. 

According to section 264(9), a worker will subscribe to a provident fund to which their employer shall contribute to it an equal amount.

GP argued that the drivers are not their workers, rather they are workers of 'Outsourcing Companies', as per terms of the contract GP had entered with SSL and Jamsons. 

The concept of outsourcing was a new concept. It has been incorporated in the Bangladesh Labour Act 2006 by way of amendment made by Act No 30 of 2013. The amendment makes it clear through its insertion of section 3(Ka)(3) that workers supplied by contracting agencies will be treated as workers of the contractor concerned, and shall have the oversight of this Act. 

The appellate court ruled in the favour of GP, by stating that those drivers were not employees of GP. SSL/Jamsons received remunerations from GP and SSL/Jamsons recruited the drivers on temporary basis to render service as drivers for GP as employees of SSL/Jamsons. 

GP never appointed the drivers on temporary or permanent basis, and never issued any letters of appointment to them or gave them any assurance that they would be absorbed permanently in the employment of GP. SSL/Jamsons is engaged in providing workers on outsourcing basis and in the course of its business, SSL/Jamsons entered into an agreement with Grameenphone.

Illustration: TBS

But some important points also need to be discussed in favour of the workers (the drivers).

The High Court Division in this instance found that if there is a breach suffered by the contractor, its remedy lies against the contractor. Once a person is engaged for any work, it is the duty of the employer to give him an appointment letter, prepare and maintain a service book, give him identity card, allow him leave and holidays; if leave is not enjoyed to pay wages in lieu of leave, to give service benefit on termination, retrenchment, discharge, retirement, death or even on dismissal. 

These duties are completely the burden of  the employer. It was decided that it is the responsibility of SSL to train all outsourced personnel on their duties and responsibilities, and they remain fully responsible for pay, allowance, festival bonus, food, accommodation, uniform, leave, medical and conveyance of the outsourced personnel. 

Also, the company would be responsible for the arrangement of all kinds of holidays and leave for the outsourced personnel. It was stated that the drivers are liable to receive the benefits under the Labour Act 2006. 

It was also discussed in the case that if SSL/Jamsons International were unable to pay gratuity to the drivers, such denial will not absolve them of their liabilities under the law as true employers of those drivers. 

Maruf Hasan Tamal is the co-lead of the research wing at  AS & Associates and an LLM candidate at the University of Dhaka

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.