Employee termination marks the official end of an employment relationship. It can be initiated by an employer or employee. In Bangladesh, the main law governing employee termination is the Bangladesh Labour Act 2006. A worker may be fired for a number of reasons, such as redundancy or misconduct. Each may have legal ramifications.
Poor termination management frequently results in disputes. Hence, both employers and employees must have necessary legal awareness. This article explores causes for employee termination in Bangladesh alongside employee termination benefits and the importance of labor courts in resolving disputes.
What Are the Legal Grounds for Employee Termination in Bangladesh?
The legal structures of employee termination in Bangladesh are regulated by the Bangladesh Labour Act of 2006. A number of modifications have been made over time. The purpose of this act is to help both employees in the case of termination.
- Legal Guidelines: Sections 20-26 of Bangladesh Labour Act 2006 list the various forms of employment termination. They also clearly outline the key differences between dismissal and termination.
- Kinds of Termination: Employment termination in Bangladesh may occur with or without reason. According to the legislation, with-cause terminations require a specific basis. Without-cause termination must be properly announced or compensated for.
- Employee Types: Temporary and permanent workers in Bangladesh are subject to different laws. Contrary to temporary workers, permanent ones receive greater protection.
- Notice Specifications: The length of the termination notice in Bangladesh is determined by the role and tenure of the given employee.
What Are the Employee Termination Rules in Bangladesh?
Bangladesh’s employment termination rules protect both the employer and employee rights during the termination procedure. The main termination rules that employees must follow are listed below.
Requirements for the Notice Period
Employers in Bangladesh are required to give workers with less than a year of employment a 30 days’ notice. Workers with more experience must be given a 60 days’ notice. Additionally, employers may choose to financially compensate the employees in exchange for the notice period.
With-Cause Termination
Solid reasons such as criminal convictions, long-term illness or misconduct must be the basis for a termination with cause in Bangladesh. Before an employee gets terminated, employers must carry out a thorough enquiry and give them a chance to defend themselves.
Rules for Severance Payment
Severance payment in Bangladesh is due to workers who have worked continuously for at least a year. Each completed year of service is calculated at 30 days’ salary. Severance guarantees financial security to workers who have been terminated.
Documentation of Procedures
Formal termination letters including the cause for employee termination, outstanding compensation and effective dates must be issued by Bangladeshi employers. For full labour compliance and potential future conflicts, all termination documentation must be kept up to date.
Protection of Special Worker Categories
In Bangladesh, it is illegal to fire female employees when pregnant or on maternity leave. Workers on authorized medical leave remain protected until the end of their permitted leave duration. Such measures protect Bangladeshi workers who are at risk.
Policy for Job Cuts
Bangladeshi employers are to adhere to the “last in, first out” approach when firing workers for redundancy. Before implementing job cuts, they must also make an effort to offer substitute job alternatives within the company.
Remedies for Wrongful Termination
If a Bangladeshi employee has been terminated wrongfully, they can pursue legal action. The Labour Court has the authority to grant compensation or reinstatement. After being fired, employees must submit claims within 30 days.
Considerations for the Probationary Period
Probationary employees in Bangladesh may be let go with 14 days’ notice or compensation. The maximum duration of the probationary period is 6 months in Bangladesh. During the first stage of work, multiple rules are in effect.
What Are the Different Types of Employee Termination?
Employees in Bangladesh can be terminated from their job in several ways. The primary types of employee termination in Bangladesh are outlined as follows.
- Constructive Termination : This happens when an employer makes the workplace so unbearable that the employee is essentially forced to quit. Even though it is not stated in the Labour Act, Bangladeshi courts acknowledge the notion where employers significantly alter employment or foster hostile working situations.
- Mutual Agreement : Both the employer and the employee in Bangladesh can mutually agree to end the working contract. Usually, a deal is struck. This includes severance benefits, notice periods and other perks. To avoid future disagreements, both parties must precisely record their agreement.
- Automated Termination : Contracts for employment in Bangladesh may contain clauses allowing for automated termination on specific occasions. This can be the conclusion of a project or the expiration of the working contract. With fixed-term contracts, if the terms were made explicit at the time of hiring, employment terminates on the designated date, without the need for a notice.
- Termination Because of Disability or Illness : Termination may be warranted when an employee’s chronic illness or disability prevents them from performing their tasks. However, before terminating an employee, employers are required to exhaust all sick benefits and take reasonable accommodations into account.
- Termination Upon Retirement : Upon reaching retirement age, as per company policy or employment contract, their job comes to an end. In Bangladesh, the retirement age is 59 years old. However, this can vary depending on the company and specific conditions.
What Is the Employee Termination Process in Bangladesh?
Bangladesh has explicit guidelines for employment termination. Employers must strictly follow these steps. Violations of these instructions may result in legal issues. Below is a detailed guideline for terminating employees in Bangladesh.
- Identifying Reasons for Termination : Employers must have a legitimate reason to fire an employee. This can include subpar work, inappropriate behaviour or job cuts. The justification needs to be permissible under Bangladeshi law. Keep thorough records of everything related to the issue.
- Consistent Performance Reviews : To address performance concerns, hold official performance reviews. Record what the employee is doing incorrectly. Give them advice for progress. Maintain a record of every review. Demonstrate that the issue took place multiple times.
- Issue Warnings : Before terminating an employee, give them written warnings. Clearly state the issue. Inform them of the necessary changes. Describe the consequences if they do not improve. If possible, issue several warnings.
- Investigating : Do a thorough investigation for bad work or misconduct. Speak with witnesses. Gather proof. Be fair and detailed with what you find. Save all the records you have from your inquiry.
- Opportunity for Defense : Allow the employee to explain their case. Hold a meeting. Take note of any justifications they provide. This complies with Bangladesh’s legal standards for fairness.
- Figuring Out Notice Requirements : Based on the years of service of the employee, identify the notice period in case of termination, whether it should be 30 or 60. You can also choose to pay them instead.
- Writing the Letter of Termination : Write a clear letter of termination. Add the reasoning for the termination. Declare the last day of employment. List final payments. Mention the return of any company items. Ensure every detail is accurate.
- Delivery of Termination Notice : Provide the termination letter to the employee in person. Make them sign it. This initiates the notice period. Save the proof of delivery.
- Completing Last Payments : Determine the total amount owed. Add vacation days and unpaid salary. For long-term employees, include severance pay. Verify that every payment complies with the Bangladeshi law.
- Revising Employment Records : Modify every employment document to reflect the employee’s departure. Payroll and benefits system should be updated. Submit any necessary government paperwork. Maintain all records of termination for a minimum of five years.
- Providing a Certificate of Service : If asked, provide a letter of the worker’s employment history. Include their start and finish dates. Enlist the roles they had. Give a reason for their departure. Keep the letter professional and factual.
- Informing Relevant Bodies : For large layoffs, inform government representatives. For bulk terminations, inform the Chief Inspector of Factories. Describe your termination strategy in detail. Take this step to avoid fines.
What Is the Notice Period for Termination in Bangladesh?
Employers in Bangladesh are required to give workers with less than a year of employment a 30 days’ notice. Workers with more experience must be given a 60 days’ notice. Additionally, employers may choose to financially compensate the employees in exchange for the notice period.
What Are an Employer’s Obligations During the Termination Process in Bangladesh?
Employers in Bangladesh violating the obligations of employment termination risk legal implications such as fines, reinstatement orders or claims for compensation.
- Give Proper Notice : Proper notice period based on the years of service of the employee must be provided.
- Paying Wages Instead of Notice : For instant termination, employers are to pay wages equivalent to the notice period instead.
- Recording Valid Grounds : As per the Labour Act, employers must possess and record legally acceptable reasons for terminating employees.
- Proper Investigation : Employers are required to carry out unbiased investigation for cases of employee misconduct.
- Permit Employee Defense : Employees are to be given the chance to explain and defend their case.
- Official Termination Letter Issuance : Employers must offer an official written termination letter consisting of reasons for termination, payment details and effective dates.
- Clearance of Remaining Pay : Employers must clear all outstanding wages, earned leave and bonuses by the final day.
- Returning of Employee Belongings : Personal items of the employee are to be returned when terminated.
- Keep Information Private : The termination’s details must be kept private. Only relevant staff members should be informed.
- Keep Records of Termination : All information and documents relevant to the termination procedure must be maintained for a minimum of five years.
Termination Letter Template
For your convenience, we are providing termination letter templates in both English and Bengali format. This will assist employers in creating a professional and prompt termination letter.
Employee Termination Letter – English:
Employee Termination Letter – Bangla:
What Are the Termination Benefits for Employees in Bangladesh?
Terminated employees in Bangladesh can access many benefits under the Bangladesh Labour Act 2006. Such termination benefits are present for financial security and fair compensation for the transition stage after job loss. However, the benefits can vary on the basis of employment type, years of service or reason for termination.
- Gratuity Payment : Gratuity payment is applicable for workers who have worked a minimum of five years. It serves as a kind of reward for extended service as well as retirement benefit. Gratuity payments are calculated at 30 days’ wages for each completed year of service. Gratuity serves as a form of retirement benefit and reward for long service.
- Unused Leave Refund : At the moment of termination, all accumulated and unused leave refund must be allocated. This is determined using the worker’s present pay rate and guarantees that they get compensated for paid time off that they were unable to use.
- Removal of Provident Funds : Upon termination, workers are entitled to take their entire provident fund balance, including contributions from both the company and themselves. This gives them instant access to their savings which can be significant during times of unemployment.
- Retrenchment Pay : This is calculated at 45 days’ earnings for every calendar year of service of permanent employees. This is given to employees terminated on the basis of redundancy. Retrenchment pay helps employees cope with the shock of losing their jobs.
- Service Certificate : Employees have a right to obtain a service certificate upon request. This must outline the roles held, the nature of the roles and length of employment. As a result, this certificate aids in future employment.
- Costs of Repatriation : If stated in the employment contract, expatriate employees may be eligible for repatriation costs. This includes the expense of transportation back to their point of origin.
How Are the Termination Benefits Calculated in Bangladesh?
In Bangladesh, the main formula to calculate termination benefits is 30 days’ salary multiplied with years of service. For instance, an employee with a monthly salary of BDT 15,000 and 5 years of service, would be granted BDT 75000 in severance pay. That is, 15,000 ÷ 30 × 30 × 5.
Other perks are calculated in a similar fashion. To clarify, unused leave are calculated by multiplying unused leave days with the current daily rate.
Are Termination Benefits Mandatory in Bangladesh?
Yes, the Bangladesh Labour Act of 2006 stipulates termination benefits in Bangladesh. Depending on the employee’s duration of service and cause for termination, legislation mandates that employers offer termination benefits to workers. Noncompliance with these requirements may be followed by legal repercussions, such as fines and compensating payments.
Who Is Eligible for Termination Benefits in Bangladesh?
In Bangladesh, duration of service and employment position determine eligibility for termination benefits. Severance compensation is accessible to permanent workers working consistently for at least a year. Regardless of tenure, all employees are eligible for notice period benefits. For gratuity compensation, only workers who have worked for the same company for at least five years are eligible.
How Can Employees Claim Their Termination Benefits in Bangladesh?
Employees in Bangladesh must first collect the necessary paperwork, such as their employment contract, paychecks, and termination letter, before they may request termination benefits. The HR department of their employer should then receive a formal written request from them that includes a list of all anticipated benefits calculated using the Bangladesh Labour Act calculations.
Employees should submit a complaint with the Labour Court within 30 days of the disagreement occurring, with all supporting paperwork, if the employer refuses or underpays. If the employer continues to refuse to pay, the Labour Court will consider the matter and issue a legally binding decision.
What Is the Process of Employee Reinstatement in Bangladesh?
Employee reinstatement in Bangladesh helps workers who lost their jobs unfairly get their positions back. This law protects employees from wrongful termination. Reinstatement means the employee returns to their original job with the same benefits. This is available when employers break termination rules.
The process starts when an employee files a complaint with the Labour Court. This must happen within 30 days after being fired. The employee explains why they believe the termination was unfair. They must provide evidence of wrongful termination. The court then sends a notice to the employer. Both sides must attend court hearings to present their case.
During the court hearings, the judge listens to both parties. The employee shows why the termination was wrong. The employer explains their reasons for the termination. The court reviews all documents and witness statements. This process may take several months to complete. The judge makes a decision based on the evidence and the law.
If the court finds the termination was unlawful, it can order reinstatement. The order states the employee must get their old job back. The employer must also pay any missed wages. This covers the time from termination until reinstatement. The employer must follow this order within 30 days. Failure to comply can result in penalties.
After reinstatement, the employee returns to work as before. They get the same position, salary, and benefits. Their job service time continues without a break. Sometimes the relationship between employer and employee remains difficult. In these cases, the court might order compensation instead of reinstatement. The amount depends on years of service and circumstances. This gives the employee financial support while they find a new job.
Can an Employee Challenge Wrongful Termination in Bangladesh?
Yes, employees in Bangladesh can challenge wrongful termination through the legal system. The Bangladesh Labour Act 2006 establishes a clear process for contesting terminations that violate the law.
When challenging wrongful termination, employees must present evidence to support their claims. This evidence typically includes employment contracts, appointment letters, performance evaluations, and the termination letter itself. These documents help establish the employment relationship and the stated reasons for termination.
Employees can also use witness testimony from colleagues who observed the circumstances leading to termination. These witnesses might confirm that the employee performed adequately or that proper procedures weren’t followed.
What Are the Penalties for Unlawful Termination in Bangladesh?
The Bangladesh Labour Act imposes severe penalties on employers who fire workers illegally in Bangladesh. The Labour Court can order the employee’s reinstatement together with full back payments for the time between termination and reinstatement. If reinstatement is not feasible, the court may instead award up to 45 days’ pay for every year of service, together with additional damages determined by the duration of service and the circumstances surrounding the termination.
Final Thoughts
The termination of employment in Bangladesh must follow the specific requirements outlined in the Bangladesh Labour Act 2006 and its amendments. The Labour Courts across the country actively enforce these regulations, imposing significant penalties on non-compliant employers including reinstatement orders and compensation payments. Bangladesh’s growing industrial and service sectors have seen increasing scrutiny of termination practices, making legal compliance more critical than ever.
Transparency and fairness remain essential in Bangladesh’s hierarchical workplace culture where employment relationships often extend beyond mere contracts. Employers should maintain thorough documentation in Bangla and English to ensure all employees understand performance expectations and termination processes. When separation becomes necessary, providing proper notice, accurate calculation of gratuity and severance, and timely settlement of all benefits demonstrates respect for Bangladesh’s labor traditions and legal framework.
