The Bangladesh Labour Act 2006 for Employers: Coverage, the Paper, the Money, the Unions, and What the 2025 Ordinance and the 2026 Act Changed

In this guide: What the 2025 Ordinance and the 2026 Act changed · Coverage: establishments, workers and the people outside the Act · The paper: records, rules and returns · The money: hours, leave, wages and benefits · Ending employment and the Chapter II arithmetic · Enforcement: inspectors, the Director of Labour, the courts and the unions

The short answer

Read the Act as four questions. Who does it cover? Everyone employed for hire in an establishment outside the zones, in the seven classes of s.4, unless the person is mainly a manager, administrator or supervisor; the 2025 Ordinance pulled officers and staff into the definition and the 2026 Act took them out again, so a department head is still outside the Act and a clerk is inside it. What paper must exist? Appointment letters, ID cards, service books, the register, approved service rules if you have your own, the hours and holiday notices and the two annual returns (our appointment letter and service rules guides). What must be paid and when? Wages by the seventh working day; overtime at double; the leave and holiday entitlements; maternity; the separation payments in Chapter II (termination); gratuity, provident fund and the 5% profit participation; all set out in our wages and leave guide. Who can come after you? DIFE’s inspectors, the Director of Labour (now with power to order a stop and compensation without a court), the Labour Courts and the new ADR Authority, and the unions, whose registration threshold fell from 20% of the workforce to 20 members (courts and unions guide). The table below lists every threshold that moved in 2025 and 2026.

What the 2025 Ordinance and the 2026 Act changed

Three things did not change and are often reported as if they had: the 120-day termination notice in s.26, the WPPF thresholds in s.232, and the EPZ Labour Act 2019, which was not amended in parallel. The Act number of the 2026 amendment is given as 40 of 2026 by one professional source and 43 by another, and the assent date was not published in the sources we could read; we cite it by title and bdlaws entry until the gazette is in hand.

Coverage: establishments, workers and the people outside the Act

Section 1(4) lists who is outside: government offices and their establishments (except Chapter II where the government owns a commercial establishment), security printing and ordnance factories, non-profit institutions for the sick, aged, destitute and orphaned, non-profit educational, training and research institutions, hostels and messes, shops at religious or charitable fairs, seamen (except Chapters XII to XIV), agricultural farms with fewer than five regular workers, domestic servants and family-run establishments without hired workers. Professional summaries of the 2025 Ordinance say hospitals, clinics and diagnostic centres and the staff of non-profit institutions were brought inside, and that domestic, agricultural and platform workers gained partial coverage; the gazette text should be read before relying on either. Inside the Act, the critical line is s.2(65): a worker is anyone employed, directly or through a contractor, for skilled, unskilled, manual, technical, trade-promotional, business-development or clerical work for hire, excluding a person employed mainly in a managerial, administrative or supervisory capacity. The test is function, not title: a “manager” who supervises nobody and signs nothing is a worker; an “executive” who hires, disciplines and approves leave is not. Contract and outsourced workers are workers of the establishment for Chapter II purposes through the “through a contractor” words, the contracting agency must be licensed under s.3A, and the 2022 Rules require pay parity and treat work beyond six months as permanent. Section 4 gives the seven classes (apprentice, badli, casual, temporary, probationer, permanent, seasonal) and fixes probation at six months for clerical work and three months otherwise, extendable by three for a skilled worker; a probationer who completes the period is permanent whether or not a confirmation letter issues.

The paper: records, rules and returns

Chapter II is enforced through paper, and the DIFE inspector’s first request is for it. Every worker must have an appointment letter and a photo identity card (s.5; Rule 19, Form 6); a service book kept at the employer’s cost and in the employer’s custody (ss.6–8; Rule 20); and an entry in the register of workers available to the inspector at all working hours (s.9). An establishment that wants its own service rules submits them to the Inspector General under s.3; they take effect only on approval, which must be given or refused within 90 days (the six-month period went in 2013), with an appeal to the Government within 30 days decided in 45; government-owned establishments are exempt from approval. The working-hours notice (s.111(8)), the list of festival holidays (s.118), the abstract of the Act in Bangla (s.337) and the half-yearly and annual returns on Forms 80 and 81 (s.333) complete the set. Section 80 requires notice of a workplace accident to the inspector within two working days and a register of injuries causing more than 48 hours’ absence. From fifty workers a participation committee (s.205) and, in a factory, a safety committee (s.90A); from a hundred, group insurance (s.99); from five hundred, a welfare officer (Rule 79). Our DIFE guide lists what the licensing inspector checks; the point here is that the same file answers the Labour Court.

The money: hours, leave, wages and benefits

Two notes. The figures for Chapters IX to XI come from the consolidated text to 2018 and professional summaries; where the 2025 Ordinance is said to have changed a rate on the strength of one source (the 1-in-14 annual leave), we say so and do not rely on it. And the money in this table is the floor: service rules, a collective agreement or an appointment letter can give more and cannot give less (s.3(1)).

Ending employment and the Chapter II arithmetic

Chapter II provides seven exits, each with its own notice and payment, and the Labour Court’s first question in a s.33 complaint is which one the employer used. Termination simpliciter (s.26): 120 days’ notice for a monthly-rated permanent worker, 60 for others, 30 and 14 for temporary workers, or pay in lieu, plus 30 days’ wages per year of service or gratuity, whichever is higher; no reason need be given, and the section was not changed in 2025 or 2026. Retrenchment (s.20) for redundancy: one month’s notice with reasons and a copy to the Inspector General and the union, 30 days per year or gratuity, last in first out, and a right of re-employment (s.21). Discharge (s.22) for certified ill-health: 30 days per year. Dismissal (s.23) for conviction or proved misconduct, after the s.24 procedure: written charge, seven days to reply, an enquiry committee of equal representation completed within 60 days, suspension on half pay for no more than 60 days, a reasoned order; a dismissed worker with a year’s service is reported under the 2026 Act to receive 15 days’ wages per year. Lay-off (s.16): half of basic plus allowances for up to 45 days a year, now after three months’ service. Resignation (s.27): 60 days’ notice from the worker, with a graduated benefit of 7, 15 and 30 days a year by length of service. Retirement (s.28) at 60, on the s.26(4) terms. Every exit ends with the same arithmetic: wages to date, leave encashment, notice pay, the statutory compensation or gratuity, provident fund balance, and payment within 30 working days (s.123(2)). Our termination guide has the calculator; the hub point is that choosing the wrong exit (calling a redundancy a termination, or a termination a dismissal) is the commonest way an employer loses in the Labour Court.

Enforcement: inspectors, the Director of Labour, the courts and the unions

Four institutions police the Act. The Department of Inspection for Factories and Establishments, through its inspectors under s.319, enters, examines, seizes and prosecutes in the Labour Court; the general penalty for an offence with no specific punishment (s.307) is now reported at Tk 25,000 to 50,000 and up to three months. The Director of Labour registers unions (within 55 days of application, s.182), supervises CBA elections and, since the Ordinance, may under ss.196A–196B order an employer to stop an unfair labour practice and pay compensation without going to court, with a fine of Tk 50,000 to 1 lakh for non-compliance. The Labour Courts (thirteen, each a district judge with an employer and a worker member) hear s.33 complaints, s.213 applications and industrial disputes, with appeal to the Labour Appellate Tribunal within 60 days (s.217); the new ADR Authority under s.348C offers conciliation and arbitration with binding awards, and the National Social Dialogue Forum under s.348B sits above sectoral bargaining. The unions: registration now needs a fixed number of members (20 in an establishment of up to 300 workers) rather than 20% of the workforce, at most three unions per establishment, check-off for any registered union, and a list of employer unfair labour practices that now names blacklisting, sponsoring a union and paying workers to leave one. An employer with fifty workers should expect a participation committee; one with three hundred should expect a union application and should know that obstructing it is an offence under s.291. Our courts and unions guide covers procedure; this is the map.