The Appointment Letter, the Employment Contract and Probation: What s.5 of the Labour Act Requires, What to Put In, and Which Clauses Fail

In this guide: The statutory contents under s.5 and Rule 19 · Probation and the classes of worker · Model letter for a worker (clauses) · Model contract for a manager or officer (differences) · Clauses that fail, and why · Contract workers, outsourcing and apprentices

The short answer

Issue the letter before the first day, in Bangla (an English version may accompany it), signed by the employer, acknowledged by the worker, with a copy on file. State the class from s.4, because the class fixes probation, notice and benefits; state the probation period within s.4 and the date on which it ends, because silence or an over-long period makes the worker permanent from the start; state wages by component (basic, house rent, medical, conveyance, food) because overtime, gratuity, maternity benefit and the festival bonus are calculated on basic; state hours, weekly holiday and leave by reference to the Act or the approved service rules; and state the notice as the Act gives it (120 days from the employer for a monthly-rated permanent worker, 60 from the worker), because anything shorter is void. Issue the Form 6 identity card at the same time, open the service book and enter the worker in the register. For a manager or officer outside the Act, the same letter is a contract: add the executive terms (notice as agreed, bonus and incentive scheme, confidentiality, intellectual property, conflict of interest, a reasonable non-solicitation) and leave out the clauses the courts will not enforce. The models below are what we issue; our termination guide shows how each clause plays out at the end.

The statutory contents under s.5 and Rule 19

Rule 19(1) forbids appointment without the letter; Rule 19(5) prescribes the identity card in Form 6 (name, designation, card number, photograph, employer’s seal); s.6 to s.8 require a service book in the Rule 20 form kept by the employer, with a copy the worker may keep at own cost, and s.9 the register of workers open to the inspector. The letter, the card, the book and the register are checked together on every DIFE visit and are the four documents the half-yearly return is built on.

Probation and the classes of worker

Section 4 is the clause employers most often draft against the Act. The classes are seven: apprentice (a learner paid an allowance), badli (a substitute for a permanent or probationer worker who is absent), casual (employed for casual work), temporary (for work essentially of a temporary nature likely to finish within a limited period), probationer (provisionally employed to fill a permanent vacancy, during the probation period), permanent (employed for permanent work or having completed probation satisfactorily), and seasonal. Probation is six months for a worker whose function is of a clerical nature and three months for any other worker; for a skilled worker whose quality of work cannot be judged in three months the employer may extend once by three months. On completion the worker is deemed permanent: the Act does not require a confirmation letter, so an employer who stays silent at the end of probation has a permanent worker, and an employer who “extends” a clerical worker’s probation at six months has one too. A worker who had earlier completed probation in the same establishment and is re-employed is permanent at once. A probationer may be released during probation by the employer with the notice the letter provides (the Act fixes notice for permanent and temporary workers; for probationers the letter governs, and most firms give 14 to 30 days or pay in lieu), and without the s.26 compensation, which is why the probation end date must be unambiguous. Fixed-term “contractual” appointments for permanent work do not escape the Act: the Labour Courts look at the nature of the work and the renewals, and the 2022 Rules treat a contracted worker beyond six months as permanent. Temporary and casual classes are for genuinely temporary and casual work.

Model letter for a worker (clauses)

1. Appointment. You are appointed as [designation] in the class of [probationer / temporary / casual] with effect from [date] at [establishment and address]. 2. Probation. You will be on probation for [three / six] months ending on [date]; on satisfactory completion you will be permanent from [date] without further letter; the company may extend probation once by three months under s.4(8) of the Labour Act 2006 where the quality of your work cannot be judged, by written notice before the end date. 3. Wages. Your monthly wages are Tk [ ], comprising basic Tk [ ], house rent Tk [ ], medical Tk [ ], conveyance Tk [ ], food Tk [ ], payable by the seventh working day of the following month by bank transfer, subject to deductions permitted by ss.125 to 129 of the Act. 4. Hours. [8] hours a day and [48] a week, [shift / times], with rest and overtime as provided in ss.100 to 108; overtime at twice the ordinary rate of basic and dearness allowance. 5. Weekly holiday and leave. [Friday]; casual, sick, annual, festival and maternity leave as provided in the Act and the company’s approved service rules. 6. Benefits. Festival bonus, provident fund, gratuity, group insurance and other benefits as provided in the Act, the Rules and the approved service rules. 7. Duties and conduct. You will perform the duties of your post and such related duties as assigned, observe the service rules and the code of conduct, and keep the company’s information confidential during and after employment. 8. Place of work and transfer. Your place of work is [ ]; the company may transfer you to any of its establishments on [ ] days’ notice on the same terms with the relocation allowance in the service rules. 9. Notice and separation. Termination, retrenchment, discharge, dismissal, lay-off, resignation and retirement are governed by ss.16 to 28 of the Act and the service rules; on separation your dues will be paid within thirty working days. 10. General. The approved service rules form part of this letter; where the Act is more favourable, it prevails; the Bangla text governs. Signed, acknowledged, dated, with the Form 6 card issued the same day.

Model contract for a manager or officer (differences)

For staff employed mainly in a managerial, administrative or supervisory capacity the Act’s Chapter II does not apply, and the letter is a contract under the Contract Act 1872. Keep the structure above and change the content where the law allows. Probation may be longer than s.4 (six months is customary, with an extension by agreement). Notice is as agreed, commonly one to three months either way, with pay in lieu and garden leave; the company may provide for summary termination for defined gross misconduct after a fair hearing (the general law expects a reasonable procedure even where the Act does not apply). Compensation on termination is contractual (the Act’s 30 days per year does not apply), though gratuity under the company’s scheme and provident fund balances remain payable, and the income tax exemption for gratuity applies to approved funds. Restrictive covenants. Section 27 of the Contract Act 1872 voids agreements in restraint of trade; the Bangladesh courts enforce confidentiality and intellectual-property clauses, a non-solicitation of clients and staff for a reasonable period, and recovery of actual training cost under a bond, but treat a post-employment non-compete as unenforceable except in narrow cases; draft for what the courts will enforce. Remuneration should still be stated by component for tax (TDS under the Income Tax Act 2023) and for the gratuity base. Benefits such as car, phone, club and bonus are contractual and should say whether they survive notice. Dispute resolution may provide for arbitration under the Arbitration Act 2001, which is valid for non-workers. One caution runs through all of it: if the “manager” in fact does clerical or technical work without managerial authority, the Labour Court will apply the Act regardless of the heading of the contract.

Clauses that fail, and why

Contract workers, outsourcing and apprentices

Three categories need their own paper. Workers supplied through a contracting agency are workers of the establishment for Chapter II purposes under the “through a contractor” words of s.2(65); the agency must be licensed under s.3A (DIFE registers contracting agencies with a security deposit); the 2022 Rules require pay parity with directly employed workers doing the same work, a social-security fund where no gratuity scheme exists, and treat work beyond six months as permanent. The principal should hold the agency’s licence, the parity schedule and the agency’s own appointment letters on file, because the Labour Court will look through the agency to the principal when dues are unpaid. Apprentices are a s.4 class and are “workers” under s.2(65); the Apprenticeship Ordinance 1962 and the 2008 Rules govern formal apprenticeship with an allowance, a training programme and a certificate; an “intern” doing a worker’s job on a stipend is a worker. Foreign nationals employed in Bangladesh are workers or staff like anyone else for the Act, and additionally need the work permit from Invest Bangladesh (or BEPZA, or the NGO Affairs Bureau) and a security clearance before they start, with the appointment letter matching the permit’s designation and salary; our work permit guide has the procedure. In every case, the letter should exist before the first day; the only thing worse than a bad appointment letter in the Labour Court is none.