{"id":133876,"date":"2026-04-07T13:44:15","date_gmt":"2026-04-07T13:44:15","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=133876"},"modified":"2026-04-07T13:44:15","modified_gmt":"2026-04-07T13:44:15","slug":"bangladesh-employment-and-labour-law","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/bangladesh-employment-and-labour-law\/","title":{"rendered":"Bangladesh: Employment and Labour Law"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-133876","comparative_guide","type-comparative_guide","status-publish","hentry","guides-employment-and-labour-law","jurisdictions-bangladesh"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Vertex Chambers<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2022\/10\/Untitled-1.gif\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Vertex Chambers<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2022\/10\/Untitled-1.gif\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Employment and Labour Law laws and regulations applicable in Bangladesh<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does an employer need a reason to lawfully terminate an employment relationship? If so, state what reasons are lawful in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>An employer may dismiss a worker under Section 23 read with Section 24 of the Bangladesh Labour Act, 2006 (as amended by the Bangladesh Labour (Amendment) Ordinance, 2025) (\u2018Labour Act\u2019) if the worker has been convicted of any criminal offence or if the worker has been found guilty of misconduct. Further, under Section 26 of the Labour Act, a worker may be terminated from employment without any reason by giving the prescribed notice or pay in lieu. Under Section 20 of the Labour Act, a worker may be retrenched on the grounds of redundancy. Moreover, under Section 22 of the Labour Act, a worker may be discharged for reasons of physical or mental incapacity or continued ill-health certified by a registered medical practitioner.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What, if any, additional considerations apply if large numbers of dismissals (redundancies) are planned?  How many employees need to be affected for the additional considerations to apply?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>According to Section 12(8) of the Labour Act, if the period of \u2018stoppage of work\u2019 exceeds 3 (three) working days, then the workers concerned shall be laid off and they shall be paid compensation as per Section 16 of the Labour Act.<\/p>\n<p>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 (three) days may be adjusted against the compensation payable to such worker for the period of such lay-off.<\/p>\n<p>As per Section 12(1) of the Labour Act, a \u2018stoppage of work\u2019 may occur when an employer, at any time, if necessary in the event of fire, sudden catastrophe, breakdown of machinery, stoppage of power supply, epidemics, wide spread riots or any other cause beyond his control, stop any section or sections of his establishment, wholly or partly, for such period as the cause for such stoppage continues to exist. In order for the provisions to apply, no specific number of workers need to be affected.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What, if any, additional considerations apply if a worker\u2019s employment is terminated in the context of a business sale?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Pursuant to Rule 25(3) of the Bangladesh Labour Rules, 2015 (\u2018Labour Rules\u2019), any factory or establishment whose workers have been laid-off or which is temporarily closed cannot be transferred to any other owner or establishment by way of lease or tenancy agreement for the purpose of engaging in production or joining in a service process, unless all the lawful dues of the workers are paid.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do employees need to have a minimum period of service in order to benefit from termination rights?  If so, what is the length of the service requirement?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Firstly, for retrenchment compensation, Section 20 of the Labour Act mandates that a worker must have worked for at least 1 (one) year continuously to be eligible for retrenchment compensation or gratuity, whichever is higher.<\/p>\n<p>Secondly, for termination without cause, only a permanent worker is entitled to compensation or gratuity (whichever is higher) and other applicable benefits as prescribed under Section 26 of the Labour Act. Under Section 4(7) of the Labour Act, a \u2018permanent worker\u2019 is defined as someone who is employed in an establishment on a permanent basis or if he has completed the period of his probation (3 (three) to 6 (six) months) satisfactorily in the establishment.<\/p>\n<p>Thirdly, for dismissal, if a worker is dismissed on account of theft, misappropriation, fraud or dishonesty in connection with the business or property of the employer, or on account of disorderliness, riot, arson or breakage in the establishment, he or she is not entitled to any compensation for the dismissal. However, if a worker who has been in continuous service for at least 1 (one) year is, under extenuating circumstances, dismissed or removed, instead of being dismissed for criminal conviction or misconduct, he or she will be entitled to compensation for such dismissal or removal as provided under Section 23(3) of the Labour Act.<\/p>\n<p>Fourthly, for discharge (due to medical reasons), Section 22 of the Labour Act prescribes that if a worker who has completed at least 1 (one) year of continuous service, is discharged from his or her service, he or she will be entitled to compensation or gratuity, whichever is higher.<\/p>\n<p>Finally, in the case of resignation on the part of the employee, to receive termination benefits, the employee must be a permanent worker. In such a case, he or she will be entitled to compensation or gratuity, whichever is higher.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What, if any, is the minimum notice period to terminate employment?  Are there any categories of employee who typically have a contractual notice entitlement in excess of the minimum period?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Section 23 of the Labour Act, a worker may be dismissed (for misconduct or criminal conviction) without notice or wages in lieu of notice. For termination without cause under Section 26 of the Labour Act, a permanent worker must be given 120 (one hundred twenty) days\u2019 notice (if he or she is a monthly rated worker), and 60 (sixty) days\u2019 notice (for other workers). On the other hand, a temporary worker whose termination is not due to the completion, cessation, abolition or discontinuance of the temporary work for which he or she was appointed, must be given 30 (thirty) days\u2019 notice (if he or she is a monthly rated worker) and 14 (fourteen) days\u2019 notice (for other workers). For retrenchment, if the worker has been in continuous service for at least 1 (one) year, the worker must be given 1 (one) month\u2019s notice or wages in lieu of notice.<\/p>\n<p>As for resignation, in case of a permanent worker, the notice period is 60 (sixty) days. For a temporary worker, the notice period is 30 (thirty) days (if he is a monthly rated worker) or 14 (fourteen) days (for other workers).<\/p>\n<p>On the other hand, non-workers are usually governed by the contractual provisions agreed with the employer.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is it possible to make a payment to a worker to end the employment relationship instead of giving notice?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, under Section 26 of the Labour Act, the employer may terminate any worker without notice by paying wages in lieu of notice.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can an employer require a worker to be on garden leave, that is, continue to employ and pay a worker during their notice period but require them to stay at home and not participate in any work?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are no provisions contained in the Labour Act in relation to garden leave. However, if garden leave is provided in an agreement or contract between the employer and the employee then it can be enforced under the laws of Bangladesh.<\/p>\n<p>Under Section 24 of the Labour Act, a worker charged for misconduct may be suspended for a maximum period of 60 (sixty) days pending enquiry into the charge, provided that during the period of such suspension, a worker shall be paid by his employer subsistence allowance and he shall get other allowances in full. If the worker is later reinstated, he shall be paid his wages making adjustment of the allowances paid during the suspension. Furthermore, if on enquiry, a worker is found guilty and is punished under Section 23(1) of the Labour Act, he shall not be entitled to his wages for the period of suspension, but he shall be entitled to the subsistence allowance for such period.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does an employer have to follow a prescribed procedure to achieve an effective termination of the employment relationship? If yes, describe the requirements of that procedure or procedures. Is an employee entitled to appeal against their termination?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Section 24 of the Labour Act prescribes the procedure for dismissing a worker, which primarily requires that (a) the allegation against the worker is recorded in writing; (b) the worker is given a copy of the allegation and a period of at least 7 (seven) days has been given to explain; (c) the worker has been given an opportunity of being heard; (d) the worker is found guilty after an enquiry made by the enquiry committee consisting of an equal number of representatives of the employer and the worker; (e) the employer or the manager approves the order of dismissal. Additionally, the worker may be suspended in accordance with the procedures mentioned in Section 24 of the Labour Act. However, in awarding any punishment, the employer shall take into consideration the previous record of the worker concerned, the seriousness of the offence, his achievements and contributions during his service and any other special circumstances.<\/p>\n<p>Furthermore, in relation to appeals, under Section 33 of the Labour Act, a worker who has any complaint arising under the Labour Act due to lay-off, retrenchment, discharge, dismissal, removal or termination, must first submit a written complaint to the employer within 30 (thirty) days of being informed of the cause of the complaint. The employer is required to investigate the complaint, provide an opportunity of hearing, and communicate a written decision within 30 (thirty) days.<\/p>\n<p>If the employer fails to decide within that period, or if the worker is dissatisfied with the decision, the worker may, within the prescribed 30 (thirty) days, file a written complaint before the labour court. The labour court may pass such order as it deems just, including reinstatement with or without back wages, or conversion of dismissal into a lesser penalty.<\/p>\n<p>Furthermore, under Section 218 of the Labour Act, any person aggrieved by an order of the labour court may appeal to the Labour Appellate Tribunal within 30 (thirty) days.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">If the employer does not follow any prescribed procedure as described in response to question 8, what are the consequences for the employer?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The failure to follow a prescribed procedure provided under the Labour Act and\/or the Labour Rules may expose the employer to litigation in the labour court and, in extreme cases, a fine or penalty may be imposed. However, in our experience, substantial compliance with the procedures is usually considered to be satisfactory.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How, if at all, are collective agreements relevant to the termination of employment?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Section 2(25) of the Labour Act defines \u2018settlement\u2019 as a settlement arrived in the course of a conciliation proceeding, and includes an agreement between an employer and worker arrived at otherwise than by conciliation proceedings, where such agreement is in writing and signed by both parties and a copy thereof is sent to the Director General and the Conciliator; moreover, Section 203A(4) of the Labour Act mandates that, the process and time frame for preparing the draft agreement and finalizing the joint\/collective agreement may be determined by mutual agreement between the parties concerned.<\/p>\n<p>In light of the above, Section 222(2) of the Labour Act states that, any settlement reached by agreement between an employer and a trade union of workers in his establishment, other than through arbitration proceedings, shall be binding on all parties to the agreement.<\/p>\n<p>Therefore, any agreement reached by the worker and the establishment in relation to termination shall be binding upon the parties as long as it is not in conflict with the existing rules governing termination under the Labour Act and the Labour Rules.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does the employer have to obtain the permission of or inform a third party (e.g local labour authorities or court) before being able to validly terminate the employment relationship? If yes, what are the sanctions for breach of this requirement?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Section 20(2) of the Labour Act, if any worker has been in continuous service under an employer for not less than 1 (one) year, the employer, in the case of retrenchment of such worker, shall: (a) give him 1 (one) month\u2019s notice in writing mentioning the reason for his retrenchment or, in lieu of such notice, pay him wages for the period of notice; (b) send a copy of the notice to the Chief Inspector or any other officer specified by him, and another copy to the collective bargaining agent of the establishment, if any.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What protection from discrimination or harassment are workers entitled to in respect of the termination of employment?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There is no specific provision regarding discrimination or harassment of workers in relation to termination. However, generally no discrimination is allowed in an establishment. No employer can conduct \u2018discriminatory behaviour\u2019 against its workers. The term \u2018discriminatory behaviour\u2019 has been defined as any conduct that discriminates, excludes, or gives less importance to a person on the basis of race, colour, sex, gender identity, religion, political opinion, nationality, social status, ancestry, or disability and that results in the loss of equal opportunity and treatment in employment. It should be noted that both direct and indirect discrimination are prohibited under the Labour Act (Section 345B(1) of the Labour Act). Direct discrimination occurs when a person treats another person less favourably on the basis of a prohibited ground (such as sex, race or religion), whether done overtly or covertly, and it includes sexual and other forms of harassment (Section 345B(2) of the Labour Act). Indirect discrimination occurs when a person imposes a condition or rule which, although apparently neutral: (a) places some persons at a greater disadvantage than others on the basis of a prohibited ground, and (b) is not practically necessary for the purpose of the work (Section 345B(3) of the Labour Act). It will be the employer\u2019s burden to prove that any less favourable treatment is not discriminatory and any condition or rule imposed is reasonable (Section 345B(4) of the Labour Act).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the possible consequences for the employer if a worker has suffered discrimination or harassment in the context of termination of employment?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>If an employee who has experienced discrimination or harassment initiates proceedings before the labour court, the employer may, in appropriate circumstances, be subject to fines or penalties under the Labour Act. However, in practice, such penalties are imposed only sparingly.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are any categories of worker (for example, fixed-term workers or workers on family leave) entitled to specific protection, other than protection from discrimination or harassment, on the termination of employment?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Section 50 of the Labour Act states that if any notice or order of discharge, dismissal, removal or otherwise termination of employment is given by the employer to a woman worker within a period of 6 (six) months before and 60 (sixty) days after the delivery of her child and such notice or order is given without sufficient cause, she shall not be deprived of any maternity benefit to which she would be entitled if such notice or order had not been given.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are workers who have made disclosures in the public interest (whistleblowers) entitled to any special protection from termination of employment?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, under Section 5 of the Information Disclosure Act (Provide Protection), 2011, if any discloser (a worker in this context) discloses any information in the public interest, his identity shall not be disclosed to anybody without his consent. Furthermore, under Section 5(2) of the Information Disclosure Act (Provide Protection), 2011, no criminal or civil case or, as the case may be, departmental proceedings shall be instituted against the discloser on the ground of such disclosure of public interest information.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">In the event of financial difficulties, can an employer lawfully terminate an employee\u2019s contract of employment and offer re-engagement on new less favourable terms?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There is no specific provision as such. However, Section 21 of the Labour Act prescribes that there can be re-employment of retrenched workers where any worker is retrenched and the employer intends to employ again any worker within a period of 1 (one) year of such retrenchment, the employer shall send a notice to the last known address of the retrenched worker asking him to apply for employment. Any worker who applies for re-employment in response to such request shall be given preference, and if more than one such retrenched worker applies, preference shall be given on the basis of their seniority in their previous services.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What, if any, risks are associated with the use of artificial intelligence in an employer\u2019s recruitment or termination decisions? Have any court or tribunal claims been brought regarding an employer\u2019s use of AI or automated decision-making in the termination process?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The risks remain uncertain since, to the best of our knowledge, such artificial intelligence processes are yet to be put to use in Bangladesh with respect to an employer\u2019s recruitment or termination decisions. To the best of our knowledge, there has been no such court or tribunal claim or ruling.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What financial compensation is required under law or custom to terminate the employment relationship? How is such compensation calculated?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Dismissal: If a worker is dismissed for misconduct on account of theft, misappropriation, fraud or dishonesty in connection with the business or property of the employer, or disorderliness, riot, arson or breakage in the establishment, he or she is not entitled to any compensation for the dismissal. However, if a worker who has been in continuous service for at least 1 (one) year is, under extenuating circumstances, dismissed or removed, instead of being dismissed for criminal conviction or misconduct, he or she will be entitled to compensation of 15 (fifteen) days\u2019 wages for every completed year of service under Section 23(3) of the Labour Act. Nevertheless, a dismissed worker is entitled to other benefits under the Labour Act, as applicable (e.g., provident fund, worker\u2019s profit participation fund and welfare fund).<\/p>\n<p>Termination: If a permanent worker&#8217;s employment is terminated under Section 26 of the Labour Act, he or she will be entitled to compensation of 30 (thirty) days&#8217; wages for every completed year of service or gratuity, if any, whichever is higher, in addition to any other benefit payable under the Labour Act, as applicable (e.g., provident fund), under Section 26(4) of the Labour Act.<\/p>\n<p>Retrenchment: If a worker who has been in continuous service for at least one year is retrenched from his or her service, he or she will be entitled to 30 (thirty) days&#8217; wages for every completed year of service or gratuity, if any, whichever is higher, under Section 20(2)(c) of the Labour Act. Further, he or she will also be entitled to other benefits payable under the Labour Act, as applicable (e.g., provident fund).<\/p>\n<p>Discharge: If a worker who has been in continuous service for at least one year is discharged from his or her service, he or she will be entitled to 30 (thirty) days&#8217; wages for every completed year of service or gratuity, if any, whichever is higher, under Section 22(2) of the Labour Act. He or she will also be entitled to other benefits payable under the Labour Act, as applicable (e.g., provident fund).<\/p>\n<p>Resignation: Where a permanent worker resigns from his service under Section 27 of the Labour Act, he\/she shall be paid compensation by the employer for every completed year of service: (a) at the rate of 7 (seven) days\u2019 wages, if he or she completes 3 (three) years of continuous service; (b) at the rate of 15 (fifteen) days\u2019 wages if he or she completes more than 3 (three) years but less than 10 (ten) years of continuous service under the employer; (c) at the rate of 30 (thirty) days\u2019 wages for every completed year of service if he or she completes 10 (ten) years of continuous service or more under the employer or gratuity, whichever is higher. This compensation shall be in addition to any other benefit payable to such worker by the employer under the Labour Act.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can an employer reach agreement with a worker on the termination of employment in which the employee validly waives his rights in return for a payment? If yes, in what form, should the agreement be documented?  Describe any limitations that apply, including in respect of non-disclosure or confidentiality clauses.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Bangladesh law, an employee cannot validly waive statutory rights granted under labour legislation, and any agreement attempting to waive such rights will be void and unenforceable. However, an employee may waive contractual or other non-statutory rights through a mutually agreed settlement or contractual arrangement, provided that the agreement is lawful and does not defeat the provisions of any law.<\/p>\n<p>Additionally, under Section 165 of the Labour Act, it has been prescribed that any agreement, whereby a worker relinquishes any right of compensation from the employer for personal injury arising out of or during the course of the employment, shall, to such extent as to remove or reduce the liability of any person to pay compensation under Chapter XII (Compensation for injury caused by accident) of the Labour Act shall be void.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is it possible to restrict a worker from working for competitors after the termination of employment? If yes, describe any relevant requirements or limitations.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Section 27 of the Contract Act 1872 (\u2018Contract Act\u2019), every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind is void; hence, post-termination restrictions not to compete are in violation of Section 27 of the Contract Act and thus are generally invalid and unenforceable.<\/p>\n<p>Since post-employment restrictive covenants not to compete are generally invalid and unenforceable, there is no question of an employer continuing to pay an employee after their employment has ended.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is it possible to restrict a worker from soliciting customers or clients, or employees of the employer, after the termination of employment? If yes, describe any relevant requirements or limitations (including any payments that must be made to the worker for the restriction to be valid and enforceable).<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Generally, post-termination restrictions not to compete are invalid in view of Section 27 of the Contract Act. However, a post-termination non-solicitation clause may be enforceable as it protects a legitimate business interest (e.g., by prohibiting the solicitation of existing clients or the direct or indirect solicitation, hiring, or recruitment of employees) if it is for a reasonable duration and scope. Overly broad restraints risk being struck down as void for restraint of trade.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can an employer require a worker to keep information relating to the employer confidential after the termination of employment?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Section 304 of the Labour Act prohibits any person from disclosing, in contravention of any provision of the Labour Act, any secret information relating to any construction or business that came to their knowledge during discharge of their official duties.<\/p>\n<p>Further, Section 341 of the Labour Act prohibits any person from disclosing any information relating to any manufacturing or commercial secret that might have come to their knowledge in the course of discharging their official duties under the Labour Act or any rules, regulations or schemes, either during or after leaving their service. However, the prohibition does not apply where:<\/p>\n<ul>\n<li>the disclosure is in connection with the administration of the Labour Act; or<\/li>\n<li>the employer gave prior written consent to the disclosure; or<\/li>\n<li>the disclosure is for the purposes of any legal proceeding.<\/li>\n<\/ul>\n<p>The above provisions are aimed at officials discharging their duties under the Labour Act. Apart from these, there is no specific legislation aimed at employees to protect trade secrets and other confidential business information of the employer.<\/p>\n<p>However, an employer and employee may contractually agree to maintain confidentiality for a fixed period post-employment in the form of a restrictive covenant.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are employers obliged to provide references to new employers if these are requested?  If so, what information must the reference include? What duties apply to employers giving references?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, under Section 31 of the Labour Act every worker, other than a casual or substitute worker, shall be entitled to get a \u2018certificate relating to service\u2019 from his employer at the time of his retrenchment, discharge, dismissal, removal, retirement or termination of service.<\/p>\n<p>As per Rule 31 of the Labour Rules, the employer is required to issue a certificate relating to the service of the worker, mentioning details such as duration of employment and the reason for the exit of the worker from the establishment. Employers are obligated to provide such a certificate of service within a period of 15 (fifteen) days from the date of submission of an application by such worker.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What, in your opinion, are the most common difficulties faced by employers in your jurisdiction when terminating employment and how do you consider employers can mitigate these?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Employers in Bangladesh commonly face legal, procedural, and practical difficulties when terminating employment. A primary challenge is non-compliance with statutory requirements under the Labour Act, particularly regarding notice, payment in lieu of notice, and settlement of final dues. Any substantial deviation may expose employers to labour court litigation.<\/p>\n<p>Calculating the correct notice period and compensation can be administratively burdensome under Section 26 of the Labour Act (termination without cause) and Section 20 of the Labour Act (retrenchment due to redundancy). Employers often conflate termination simpliciter, dismissal for misconduct, and retrenchment. Each carries distinct legal thresholds and procedures, especially in cases of misconduct, where a domestic inquiry is mandatory. Failure to conduct a fair inquiry may result in a non-favourable outcome in litigation.<\/p>\n<p>Poor documentation is also a recurring issue. Inadequate employment contracts, incomplete service records, and a lack of written warnings weaken the employer\u2019s defence in disputes. Delays and uncertainty in labour court proceedings further increase cost and reputational risk.<\/p>\n<p>Employers can mitigate these risks by adopting clear, written employment contracts aligned with statutory requirements, maintaining robust human resource documentation, and strictly following due process. For misconduct, conducting a proper domestic inquiry in line with the principles of natural justice and statutory provisions is essential. Seeking early legal review before termination and using amicable settlement mechanisms, where appropriate, can significantly reduce litigation exposure and operational disruption. Dismissing a worker for misconduct can be time-consuming and burdensome, and sometimes quite costly.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are any legal changes planned that are likely to impact the way employers in your jurisdiction approach termination of employment? If so, please describe what impact you foresee from such changes and how employers can prepare for them?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Significant legal changes in Bangladesh have already been made under the new Bangladesh Labour (Amendment) Ordinance, 2025 (\u2018Ordinance\u2019). While the changes are not regarding termination per se, the Ordinance has promulgated the following important changes:<\/p>\n<p>&#8211; Under Section 2(9B) of the Labour Act, domestic workers and additional categories of workers are now legally recognized. Therefore, in essence, termination rights and entitlements now extend to more employees.<\/p>\n<p>&#8211; Under Section 2, sub-sections (78) and (79) have been newly added under the Ordinance, whereby employers are prohibited from maintaining blacklists that bar workers from future employment, which was previously a common informal practice after termination among some employees.<\/p>\n<p>&#8211; Trade unions can now be formed with as few as 20 (twenty) workers, increasing collective bargaining and litigation risk around terminations perceived as unfair or anti-union.<\/p>\n<p>&#8211; The Ordinance under Section 332A proposes for a discrimination, violence and harassment resolution committee in every establishment and separately an alternative dispute resolution authority under Section 348C, which could reduce labour court backlog but require employers to engage in structured internal processes before and after termination.<\/p>\n<p>However, it should be noted that the employers should review and update employment contracts and termination policies to comply with the changes made to the Labour Act. They must eliminate any blacklisting practices, strengthen internal grievance and inquiry procedures, and build capacity for negotiation and dispute resolution. Training human resource teams on the updated legal entitlements, documentation standards, and union engagement is vital to avoid costly disputes and sanctions.<\/p>\n<p>However, the Ordinance has been criticized by many experts and stakeholders for having certain mistakes and overlapping provisions. As a result, the Cabinet Division has formulated the \u2018Committee to make recommendations for the revision of the Bangladesh Labour (Amendment) Ordinance, 2025\u2019 through Memo No- 04.00.0000.0000.611.06.00003.25.12 dated 15.01.2026. The Committee will be responsible for recommending specific revisions and amendments to the Labour Act because many stakeholders have raised objections that some existing provisions are in conflict with the new provisions. Also, some of the provisions, according to many critics, are not compatible with the existing labour practices and environment of Bangladesh and that they are way too advanced to be applicable in Bangladesh.<\/p>\n<p>Following a change in the government of Bangladesh through the National Parliamentary Elections held on 12 February 2026, it is now for the newly elected government of Bangladesh to ratify the Ordinance promulgated by the previous interim government. Therefore, if the Ordinance is not ratified within a prescribed period by the newly elected government, it may become invalid.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">4758<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/133876","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=133876"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}