Pandemic, retrenchment and labour law

Due to the ongoing pandemic the business operation of our company has been substantially reduced. Recently, the company authority has informed us that they no longer need some members of staff (mostly in non-management departments) as they have nothing to do at this moment. Already the tenure of a few members has been terminated without any sort of notice and/or compensation. Some of their performances were very good and they are not at fault of any kind. Do you think the action taken by our company authority is appropriate?

Ashik, Dhaka

Response

Thank you for your query. The ongoing pandemic certainly has adversely affected the employment scenario in Bangladesh, like most other countries of the world. Several people have lost their jobs as the employers were unable to run the business smoothly. The employers have limited options to protect their business and the most obvious action for some of them is to reduce the number of employees. However, the question that arose is whether the correct procedures have been followed when an employee has been terminated from the organisation due to redundancy.

In the context of Bangladesh, the issues related to employment of non-management members of staff are governed by the provisions of the Bangladesh Labour Act, 2006 (hereinafter referred to as 'BLA') and the Bangladesh Labour Rules, 2015 (hereinafter referred to as 'BLR'). There are several methods of termination of employment and one of the waysis known as 'retrenchment on the ground of redundancy', which has been dealt with in sections 20-21 of the BLA read withrule 27 of the BLR.

The BLA and BLR have laid down the conditions which are required to be followed by an employer while severing the employment of an employee by way of retrenchment. Firstly, in the scenario the employer choses to retrench an employee on the ground of redundancy, the employer shall provide him/her a written notice of one month with reasons for retrenchment or payment for such notice period in cases where the employer wishes to retrench him/her without a notice. Most importantly, this notice period shall be applicable for workers who have completed at least one year of continuous service under the employer. The BLR has prescribed a specific format for the notice of retrenchment, which shall be used to notify the employee about retrenchment. Moreover, it is a requirement under the provision of retrenchment to send a copy of such notice of retrenchment to the Chief Inspector of Labour, Ministry of Labour along with another copy to the Collective Bargaining Agent (CBA) of the establishment, if there is any.

Such notice has to be given to the Chief Inspector irrespective of whether the employee has been retrenched with or without the one-month notice.

In addition, the worker shall be paid thirty days' basic wages for his every year of service or gratuity, if any, whichever is higher. Apart from the compensation payable when an employee is retrenched, the employee is entitled to his/her due salaries, provident fund (if any), annual leave encashment or any other benefits arising out of his/her employment agreement and/or as per the service rules of the establishment. It is notable that the principle of 'last come first go' applies in terms of retrenchment (section 20(4) of the BLA).

It is pertinent to mention that the above discussion is done for employees who fall within the definition of 'worker' (non-managerial staff) by virtue of section 2(65) of the BLA, as your question was mainly focused on them. For the management staff, the terms in their employment contract shall have to be adhered to. I hope the advice would help you understand the appropriate legal process in the given context.