An amended labour law got passage in parliament yesterday to boost worker rights and ensure freedom to form trade unions, a breakthrough that is expected to help Bangladesh regain the GSP status in the US market.
The law puts in place provisions including a central fund to improve living standards of workers, and a requirement for 5 percent of annual profits of a company to be deposited in employee welfare funds.
Labour and Employment Minister Rajiuddin Ahmed Raju placed in parliament the Labour Law (amendment)-2013 bill, which was passed by voice votes by the treasury bench lawmakers in absence of the opposition MPs.
The parliament also accepted 26 new amendments proposed by two treasury bench lawmakers Mujibul Haque and Zunaid Ahmed Palak.
The amendments were made to appease the Obama administration to regain the duty benefits suspended by the US last month on grounds of poor labour rights and unsafe working conditions in Bangladeshi factories.
The changes in the law also ensure freedom to associate, one of the sticking issues for Western countries and advocacy groups.
Employees would no longer need approval from factory owners to form trade unions. They will only need to apply to the labour directorate to collect registration of trade unions.
An owner can sack a worker if he/she remains absent in the workplace for 10 consecutive days without prior notice, according to the amendments.
The owners will have to introduce an insurance scheme if a factory employs at least 10 workers.
If a worker is injured in an accident, he/she will get assistance for treatment from the insurance scheme.
There should be a woman union leader in the factory if 20 percent of the total workforce are women, the amended law says.
No member of a trade union’s executive committee can be transferred to another factory of the same owner after a labour unrest.
Moreover, up to five trade unions can now be formed in one factory instead of just two permitted in the previous law.
The amendments also allow trade unions in the different administrative wings of a factory, which was restricted in the previous law.
To improve the living standards of workers, the government, buyers and owners will have to form a ‘central fund’ for the beneficiaries of 100 percent export-oriented industries and wholly foreign-owned companies.
The law also requires a company to deposit 5 percent of its annual profit in provident and welfare funds.
No change can be made in the factory layout plan without an approval from factory inspectors, according to the amended law.
If a worker dies after two years in service, the management of the factory will pay compensation equivalent to his/her one month’s salary.
And, if a worker dies in an accident during service, his relatives will get a compensation equivalent to 45 days’ salary.
If an owner sacks a worker who has served the company for more than a year, he/she will get 15 days’ salary for every year of service.
But if the worker is sacked for misconduct, he/she will not be entitled to any compensation. Theft, embezzlement, vandalism, arson and disruptive behaviour will be considered as misconduct under the amended law.