Mazharul Islam
Amid the current COVID-19 pandemic, it is relevant to discuss about the procedures available in the Bangladesh Labour Act, 2006 (“the Act”) concerning continuation of factories, offices and legal ways of cost cutting measures to secure survival.
1. What options are available in the Act to an employer to minimize its costs on worker/employee salary?
Option one:—
Section 12 of the Act, provides that an employer can stop work or shut down its factory or establishment for any reason beyond its control including epidemic/pandemic.
If the period of such closure is more than one working day, every worker except a causal or a substitute worker shall be entitled to salary except for one working day.
If the period of such closure is more than three working days, as per section 12(8) of the BLA, the workers may be laid-off under section 16 of the Act.
In the event of lay-off, every worker except a casual or substitute worker, who has completed one year or more service in the establishment shall be entitled to compensation for all days during which he is so laid-off, except for weekly holidays (for maximum 45 days in a calendar year) as per section 16 of the Act.
The amount of compensation during the period of lay-off would be—
half of basic salary and
dearness allowance and
ad-hoc or interim salary (if any) and
full amount of housing allowance that would have been payable to him if he had not been so laid-off.
However, if there is any agreement between the employer and the employees contrary to this provision an employee may get compensation for more than 45 days.
If during a calendar year any worker is laid-off for more than 45 days, whether continuously or intermittently, and for further 15 days or more, the worker/employee shall be entitled to compensation for every subsequent period of lay-off for 15 days or more as per section 16(5).
However, if there is any agreement between the employer and the employees contrary to this provision an employee may get compensation for more than 15 days.
The lay-off shall be effective from the first day of stoppage of work, and any wage paid to a worker for the first 3 days may be adjusted against the compensation payable to such worker for the period of such lay-off.
Option two:—
According to section 16(7) of the Act, if the period of lay-off extends beyond 45 days for any continuous period of 15 days or more (during a calendar year), the employer may choose to retrench the workers instead of laying off such worker.
While any worker of any particular category is to be retrenched, the employer shall make workers redundant on the “last come first go” basis.
If an employer chooses to retrench employees, every employee who has worked with the employer for 01 year or more shall be given 30 days’ notice or salary in lieu of notice. The employer, in the case of retrenchment of such worker, shall pay him as compensation 30 (thirty) days’ wages for his every year of service or gratuity, if any, whichever is higher.
However, for the workers who had been laid off for 45 days or more, no notice shall be necessary; but the worker so retrenched shall be paid further 15 (fifteen) days’ wages, in addition to the compensation or gratuity, which may be payable to him.
2. Is there any option to employer to grant leave without pay unilaterally?
There is no scope to grant leave without pay unilaterally unless an employee seeks such leave. However, the employer and employee can come to an arrangement mutually whereby the employee will be granted leave without pay for a certain period with option to cancel or extend the leave period at the option of the employer.
3. Can an employer deduct salary for the period of general public holiday declared by the Government of Bangladesh?
According to section 125 of the Act, an employer is allowed to deduct salary of a worker/an employee for “unauthorized absence” from duty (among other grounds). But public holidays cannot be treated as “unauthorized absence” under this section since such holidays has been declared by government of Bangladesh. Therefore, deduction cannot be made on this ground for the period of general public holiday. Further, the Government also did not declare that the employer would be entitled to deduct from salary for such unscheduled holiday.
The writer Mazharul Islam is a Corporate Legal Practitioner and Legal Analyst and who is reached on Email: mazharkj528@gmail.com.
