Rights of a contractual worker in Bangladesh

Illustration: TBS

The Bangladesh Labour Act, 2006 defines a worker as any person, including an apprentice, employed in any establishment or industry, either directly or through a contractor, to perform any skilled, unqualified, manual, technical, commercial, or clerical hire or reward work, regardless of whether the terms of employment are expressly stated or implied. However, this definition excludes individuals who are primarily engaged in managerial or clerical work.

The aim of this article is to provide an overview of the rights and freedoms of contractual workers as per the labour laws of Bangladesh.

For contractual workers, there may be no precise, suitable agreement term under the laws of Bangladesh. The contractual agreement shall be constructed upon the mutual understanding of the employer and employee.

However, it can be said that the nature of the contractual employee can be regarded as that of a temporary worker under the labour laws of Bangladesh. In Samir Malaker vs The Chairman, Divisional Court, 22 BLD 2OO3 [HCD] 417, it was stated that the term temporary worker has a connotation that is different from the dictionary meaning of the term. The term temporary worker, as defined in 2 (s) of the Employment of Labour [Standing Order] Act, 1965, refers to a worker engaged in work of a temporary nature that is likely to be finished within a limited period.

Hence, a letter of temporary appointment needs to be served on the said employee. The temporary engagements must be for a fixed period and for a specified job, but this period may be extended by the employer depending on the necessity of the job.

Temporary workers should be paid an average wage. Employers are not required to pay allowances such as conveyance allowance, medical allowance, housing allowance, and so on. If necessary, the temporary worker may be paid a bonus in a special case. The temporary worker may be paid for overtime, as determined at the time of his appointment.

A worker is entitled to the following as per the labour laws in Bangladesh: 

Provident Fund: The employer is not required to set up provident funds for the workers. However, if three-fourths of the total number of employees in the organisation submit a request for the establishment of provident funds to the employer, the employer is then required to establish provident funds for his employees within six months of receiving the request.

Every permanent worker shall, after completion of one year of his service in the establishment, where the provident fund is constituted, subscribe to the provident fund, unless otherwise agreed upon, in every month a sum not less than seven percent and not more than eight percent of his monthly basic wages, and the employer shall contribute to it an equal amount. For instance, 10% is the standard rate for the majority of businesses.

Therefore, the temporary worker shall not be entitled to the aforementioned fund, as the provision specifically mentions that it is applicable only to permanent workers.  

Gratuity: Gratuity means the wages of at least 30 days, at the rate of the wages a worker received last, for every completed year of his service or for a period of his service exceeding six months, or, in the case of his service of more than 10 years, the wages of 45 days at the rate of the wages he received last, which are payable to such worker on the termination of his employment. This entitlement is also not applicable to temporary employees. 

Payment of bonus: The term bonus has not been defined under the relevant laws. However, it is included within the definition of wages. A temporary worker may avail himself of a bonus, subject to the discretion of the employer.

The contract period of a contractual employee can be renewable as per the mutual understanding of the parties within the contract.

However, if a temporary worker's contract is repeatedly extended by the same employer, then that temporary worker may be considered a permanent worker. A permanent worker decree will be issued by the court. thereby taking advantage of all permanent worker entitlements under the labour laws of Bangladesh.

The contractual agreement must comply with the Bangladesh Labour Act, 2006, Labour Rules 2O15, Amendments 2O22 and the Income Tax Ordinance 1984.

The contractual employee shall be regarded as temporary in nature as per The Bangladesh Labour Act 2006 (hereinafter referred to as 'BLA 2006').

Section 4(5) of the BLA 2006 specifies:

A worker may be called a temporary worker if he is employed in an establishment for work that is essentially of a temporary nature and is likely to finish within a limited period of time.

 Section 9(5) of the BLA 2006 denotes:

(c) Every temporary worker shall have to pay a temporary ticket that, in the event of abandonment of his employment or in the event of receiving permanent employment,

Previously, the rights of temporary workers were limited as they could not claim the status of permanent workers. However, The 2022 Amendment to Bangladesh Labour Rules 2015 stipulates that any work will be considered permanent work if it has been continuing in the establishment without interruption for a period of 180 days. Hence, now a temporary worker working continuously beyond 180 days may be awarded the status of a permanent worker, thereby availing himself of all the rights of a permanent worker as enshrined within the labour laws of Bangladesh.

As per the Income Tax Ordinance 1984, the employer has to deduct income tax according to the law within the employee's income (i.e., no extra charges beyond salary expenses) at a prescribed rate.

The temporary worker, in the event of any non-compliance by the employer, may raise an issue in court for non-compliance depending on the nature of the breach under the applicable laws of Bangladesh.

SM Anisuzzaman, Barrister at Law, Lincoln's Inn (Call Pending).

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.