Labour Act Amendment 2025 Bangladesh: What Changed and What Employers Must Do

Labour Act amendment 2025 Bangladesh: the reforms in force in 2026

The Labour Act amendment 2025 Bangladesh employers have been absorbing since November 2025 is the largest rewrite of the Bangladesh Labour Act 2006 since the statute was passed. It began as an interim-government Ordinance gazetted on 17 November 2025, was reworked by the elected Parliament and became the Bangladesh Labour (Amendment) Act 2026, Act No 43 of 2026, dated 10 April 2026.[4] [2] It changes who counts as a worker, how a union is registered, what an employer may not do to organisers, how long maternity benefit lasts, what a resigning worker is owed and what a breach costs.

This briefing is written for HR directors, general counsel and plant heads who need to know precisely what moved, what Parliament changed between the Ordinance and the Act, how the reforms interact with export processing zones, and what to do in the next two quarters. We compare the current Bangla text against the 2018 version clause by clause, flag where implementing rules are still missing, and set out the practical risks we see emerging in registration, discipline and payroll.

Summary: The 2025 Ordinance, converted into Act No 43 of 2026, lowered trade union registration from 20 per cent of the workforce to a tiered minimum starting at 20 members, outlawed blacklisting, widened the definition of worker, extended maternity benefit to 120 days, raised festival holidays to 13, introduced resignation compensation from the first year, tied provident funds to the Progoti pension scheme, required harassment complaint committees, shortened the minimum wage cycle to three years and multiplied most fines. Export processing zones still follow the separate EPZ Labour Act 2019.

Key point: Parliament did not simply rubber-stamp the Ordinance. It cut the maximum number of unions per establishment back from five to three, removed "employees and officers" from the definition of worker and rewrote the provident fund duty around the Progoti scheme. Policies drafted against the November 2025 text need a second review against the April 2026 Act.[6]

At a glance

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Table of Contents

Why the Labour Act amendment 2025 Bangladesh happened

The reform was driven from Geneva as much as from Dhaka. In June 2019 workers' delegates filed a complaint against Bangladesh under Article 26 of the ILO Constitution, alleging non-compliance with Conventions 81 on labour inspection, 87 on freedom of association and 98 on collective bargaining. The ILO Governing Body asked for a time-bound roadmap, which the government submitted on 23 May 2021, covering labour law reform, union registration, inspection and anti-union discrimination.[7]

After the 2024 political transition, the interim government set up a Labour Reform Commission, which reported in April 2025, and ratified ILO Conventions 155, 187 and 190 on occupational safety and health and on violence and harassment.[7] [8] The former labour adviser has described how the key outlines of the draft were settled at a tripartite meeting on 11 February 2025 and presented to successive Governing Body sessions, against pressure from the European Union and United States trade authorities.[8]

The 2013 and 2018 baselines

The 2006 Act had been amended twice in substance before. The Bangladesh Labour (Amendment) Act 2013 (Act No 30 of 2013) followed the Rana Plaza collapse and added safety committees, emergency exit and protective equipment duties and union changes; the Bangladesh Labour (Amendment) Act 2018 (Act No 58 of 2018) followed.[1] [8] The 2018 text is the one most English translations still reproduce: it required a union to enrol 20 per cent of the workforce, gave eight weeks of maternity benefit on each side of delivery and eleven festival holidays, and capped the general fine at Tk 25,000.[3] Any handbook built on that translation is now wrong on each of those points.

Scale of the change

A Labour Reform Commission member has counted roughly ninety modifications, deletions and insertions in the final text.[7] That is why a patch-by-patch review of the Labour Act amendment 2025 Bangladesh rarely works. In our experience the more efficient approach is to re-baseline the appointment letter, service rules and payroll logic against the current consolidated Bangla text, then reconcile each local practice to it.

From Ordinance to Act No 43 of 2026

The interim Advisory Council gave final approval on 23 October 2025, and the Legislative and Parliamentary Affairs Division published the Ordinance on 17 November 2025.[6] [4] Garment and textile associations rejected it the next day, arguing that provisions had been added outside the consensus reached in the Tripartite Consultative Council.[4]

After the February 2026 election, the Prime Minister's labour adviser told the 356th ILO Governing Body on 30 March 2026 that the Ordinance would be placed before Parliament soon.[11] Labour and Employment Minister Ariful Hoque Chowdhury moved the Bill, and the Jatiya Sangsad passed it by voice vote on 9 April 2026, converting the Ordinance into law "with some amendments".[5] The Legislative Division lists the Bangladesh Labour (Amendment) Act 2026 as Act No 43 of 2026, dated 10 April 2026.[2]

What Parliament changed

Three changes matter most. First, the Ordinance had allowed up to five union registrations in an establishment or group; the Act restores the previous ceiling of three. Second, the Ordinance's worker definition referred to employees and officers; the Act removes both words. Third, the provident fund duty was rewritten so that employers can meet it through the Progoti universal pension scheme.[6] Maternity, festival holiday, Wage Board and union-threshold changes passed unchanged.[6]

Reactions split predictably. The Bangladesh Institute of Labour Studies said every employer objection had been accommodated and none of the unions'; the BKMEA president said ambiguities remained that would have to be cleared in the rules or a further amendment.[6] For employers, the significance is practical: the law is now settled by Parliament, but its operating detail is not.

The transitional problem

Between November 2025 and April 2026 the Ordinance was the law. Employers that acted on it, for example by recognising a fourth or fifth union, adopting Ordinance-based policies or calculating benefits under its wording, should re-check each step against the Act rather than assume continuity. Where a step was taken under a provision that Parliament narrowed, take advice before relying on it in a dispute.

Who the amended Act now covers

Coverage is where the Labour Act amendment 2025 Bangladesh reforms reach furthest, because every other entitlement depends on it.

The new definition of worker

Section 2(65) now defines a worker as any person, including a trainee, employed in an establishment or industry directly or through a contractor, by whatever name called, for wages in skilled, unskilled, manual, technical, business development or clerical work, whether the terms are express or implied. The only carve-out is a person appointed in the managerial, administrative or supervisory capacity described in section 2(49)(b).[1]

Two words do the work. "Business development" pulls in sales and marketing staff who were often treated as outside the Act, and "through a contractor" confirms that outsourced staff are workers within it. The classification risk is real: as one commentator has noted, the line between genuine supervisory authority and a supervisory job title will generate disputes.[7] Record the actual authority each manager holds over hiring, appraisal and discipline, because the label alone will not survive a Labour Court hearing.

Establishments brought inside the Act

The 2018 text excluded non-profit institutions for the care of the sick, disabled, aged, destitute or orphaned, and non-profit hostels, messes, hospitals, clinics and diagnostic centres.[3] Both exclusions have been deleted.[1] Non-profit hospitals, clinics and diagnostic centres must therefore apply the Act in full. Non-profit educational, training and research institutions remain excluded.[1]

Seafarers, domestic workers and farms

Seafarers and domestic workers are now excluded only for purposes other than Chapters XII, XIII and XIV, which deal with injury compensation, trade unions and industrial disputes. Agricultural farms ordinarily employing fewer than five workers are excluded on the same basis.[1] Domestic workers therefore gain the right to organise and to compensation, but not minimum wages, regulated hours or holidays.[7]

Platform and self-employed workers in the union chapter

For the trade union chapter alone, section 175(1) extends the concept of worker to self-employed and digital platform workers, and managerial staff may form associations for their professional interests.[7] Platform businesses should expect organising demands even though the rest of the Act does not apply to their riders and freelancers.

Trade union registration after the Labour Act amendment 2025 Bangladesh

Replaced section 179(2) lets at least 20 workers in an establishment apply jointly for registration, but a union qualifies only if its membership meets a tiered minimum: 20 members where the establishment employs 20 to 300 workers, 40 for 301 to 500, 100 for 501 to 1,500, 300 for 1,501 to 3,000 and 400 for 3,001 or more.[1] Under the 2018 text the requirement was 20 per cent of the total workforce.[3] For a 5,000-worker garment unit, the threshold falls from 1,000 members to 400.

The cliff edges

The tiers produce abrupt jumps. A factory with 300 workers needs 20 members; at 301 workers it needs 40, and at 501 it needs 100.[7] Headcount on the application date therefore matters, and so does whether contractor staff are counted. Employers should expect disputes about the denominator and keep the worker register under section 9 accurate, because it is the obvious evidence for verification.

Verification, the three-union ceiling and timelines

New section 179(2A) requires the Director General or the responsible officer to verify the application by collecting the worker list from the establishment or through an online system. New section 179(5) bars more than three registrations at any time in an establishment or group of establishments.[1] Under section 182 objections must be communicated within 12 days and registration completed within 55 days.[9]

Practice has lagged. In August 2026 union leaders reported that the Department of Labour was treating an employer's certification of headcount as a mandatory attachment, which delayed formal acceptance and so postponed the statutory clock. One application filed on 25 November 2025 was not accepted until 27 February 2026, about 95 days later.[9] Employers asked for a headcount certificate should provide an accurate one promptly. Refusing or delaying is the kind of conduct that can be characterised as interference.

Union governance

The number of union officers is now set by the union's constitution, the general membership must meet at least once a year, and funding from any source other than subscriptions, domestic or foreign, must be notified to the government.[1] [5] Our detailed guide to trade union law in Bangladesh covers collective bargaining agent elections and federation rules.

Blacklisting and unfair labour practices

New section 2(78) defines blacklisting as any action by an employer or an employers' association that prepares a list or database to disqualify a worker, including casual and substitute workers, from future employment after retrenchment, discharge, dismissal, removal, retirement or any other termination.[1] Section 195(1) now forbids an employer to blacklist a worker or union member by notice or database entry, to promote or fund employer-controlled unions, to dismiss union officers in a discriminatory way while encouraging a rival union, or to retaliate against a worker for complaining, using a helpline or taking part in proceedings.[1] [5]

Why the association wording matters

The definition reaches employers' associations, not only individual factories. Shared industry databases of "problem workers", reference-check lists exchanged between HR teams and informal WhatsApp circulations all fall within the mischief. Groups should audit what their HR teams share externally, and should limit reference responses to dates of service and designation unless the former worker consents to more.

The Director General's new powers

New section 196B allows the Director General to order an employer to stop an unfair labour practice or anti-union discrimination immediately and, where a worker has suffered loss, to order recovery and financial compensation.[1] This is an administrative remedy that does not wait for a Labour Court trial, so an employer may face a compensation order within weeks of a complaint. Any dismissal of a union officer should now be run through a documented, misconduct-based process that would survive scrutiny on its own terms.

The penalty shift

Under the 2018 text a breach of section 195 or 196A carried up to one year's imprisonment or a fine of up to Tk 10,000.[3] Replaced section 291 now provides up to six months' imprisonment or a fine of Tk 50,000 to Tk 1 lakh, or both, and applies the same range to breaches of section 196B.[1] The maximum prison term halved, but the minimum fine became five times the old maximum, which makes prosecution more likely to end in a meaningful financial penalty.

Maternity, holidays, wages and separation pay

For payroll teams, the Labour Act amendment 2025 Bangladesh brings a cluster of changes that each require a system update.

Maternity benefit

Section 46 now gives a woman worker maternity benefit for 60 days before the expected date of delivery and 60 days after it, replacing eight weeks on each side, a rise from 112 to 120 days.[1] [3] [6] The six-month qualifying service and the exclusion where she has two or more surviving children remain. The notice window in section 47 was extended to 60 days, and on receiving notice the employer must allow up to 120 days' absence with benefit.[1] Depriving a worker of maternity benefit now attracts a fine of Tk 50,000 to Tk 1 lakh, against a maximum of Tk 25,000 before.[1] [3]

Festival holidays

Section 118(1) raises festival holidays from 11 to 13 days a year with wages. New section 118(3) allows a worker to be asked to work on a festival holiday only if the employer gives one alternative day off and two days' compensatory wages.[1] Rosters built for peak export seasons around Eid should be priced on that basis.

Minimum wage revision cycle

The Wage Board revision cycle fell from five years to three.[10] The garment entry-level wage of Tk 12,500 was set in December 2023, and in August 2026 unions argued that the three-year period ends in December 2026, while no board had yet been formed.[10] Exporters pricing 2027 contracts should model a revision rather than assume the current scale holds.

Lay-off and continuous service

Section 14 now treats 240 days in twelve months, or 120 days in six months, as continuous service and uses the last monthly wages and allowances to compute compensation. Section 16 gives full lay-off compensation to a registered worker with at least three months' service.[5] The previous requirement was one year, and compensation is now at least half of basic wages regardless of lay-off duration.[7]

Resignation and dismissal compensation

Under the 2018 text a permanent worker who resigned received nothing until five years' service, then 14 days' wages per completed year up to ten years and 30 days thereafter.[3] Replaced section 27(4) now pays 7 days' wages per completed year for service of up to three years, 15 days for more than three but less than ten years, and 30 days or gratuity, whichever is higher, for ten years or more.[1] Workers dismissed for misconduct with at least a year's service now also receive fifteen days' wages per completed year.[7] Separation budgets in high-turnover sectors will rise materially, and accruals should be recalculated. See our guide to severance pay in Bangladesh for the full calculation set.

Provident fund and the Progoti pension link

Replaced section 264(10) obliges an employer with at least 100 permanent workers to establish a provident fund if at least two-thirds of the workers apply in writing. The employer is released from that duty if it ensures that workers who express interest in writing join the national universal pension scheme Progoti, with the employer and the worker each contributing 50 per cent. Where a worker declines in writing, the employer need not pay its share for that worker.[1]

The Ordinance had framed the duty more rigidly, and Parliament softened it.[6] Where a fund is formed, the existing rules still apply: contributions of 7 to 8 per cent of basic wage from both sides after a year's service, rules made within six months of the demand, and annual audit.[1]

Choosing between a fund and Progoti

The choice is commercial as well as legal. A recognised provident fund needs trustees, investment governance and audit, but is portable within the group and familiar to staff. Progoti shifts administration to the National Pension Authority but locks the employer into a 50 per cent match for each enrolled worker. Record every written demand, opt-in and opt-out with its date, because the statutory triggers depend on them. Our guide to the provident fund and gratuity in Bangladesh covers fund rules and tax recognition.

Harassment, discrimination and forced labour duties

The Labour Act amendment 2025 Bangladesh also gave the Act definitions of violence and harassment, gender-based violence and harassment, sexual harassment and forced labour.[1] [7] These definitions track ILO Convention 190, which Bangladesh ratified in 2025.[7]

The complaint committee

New section 332A requires every employer to form a five-member complaint resolution committee for discrimination, violence and harassment, with a female majority from within the establishment, a woman as head and two members drawn from organisations working on gender and sexual violence. The committee must follow a zero-tolerance policy, protect confidentiality and act on written complaints in the manner prescribed by rules.[1] Breach of section 332A carries a fine of Tk 20,000 to Tk 50,000 under new section 307A.[1]

The two external members are the practical bottleneck. Identify suitable organisations early, agree terms of reference, confidentiality undertakings and fees in writing, and avoid choosing anyone with a commercial relationship with the employer. Our analysis of workplace harassment law in Bangladesh covers investigation procedure.

Discrimination

New section 345A prohibits an employer from discriminating against a worker on grounds of race, colour, sex, gender identity, religion, political opinion, nationality, social status, descent or disability. Decisions based on a genuine occupational requirement, and special measures for historically disadvantaged groups, are not discrimination.[1] Gender-based wage discrimination is expressly prohibited.[4] Pay grids that place mostly female operator roles below mostly male roles of comparable skill should be reviewed with written job-evaluation reasons.

Forced labour

New section 307B fines a breach of the forced labour prohibition in section 345C at Tk 20,000 to Tk 50,000.[1] The fine is modest; the commercial exposure is not, because buyers' forced-labour import controls in other markets turn a local finding into a supply-chain event.

Penalties: what a breach now costs

Under the Labour Act amendment 2025 Bangladesh, most of the headline fines were multiplied. The residual offence in replaced section 307, which applies wherever no specific penalty is provided, now carries up to three months' imprisonment or a fine of Tk 25,000 to Tk 50,000, or both, against a maximum fine of Tk 25,000 before.[1] [3] The minimum fine is the important change: a missing notice or an unformed committee now has a floor.

Strikes, lock-outs and settlements

Under the 2018 text an illegal strike and an illegal lock-out carried the same penalty of up to six months or Tk 5,000.[3] Replaced section 294 now provides up to three months or Tk 10,000 to Tk 20,000 for a worker, and up to six months or Tk 20,000 to Tk 50,000 for an employer.[1] Breach of a binding settlement, decision or award under section 292 now carries up to a year or a fine of Tk 20,000 to Tk 50,000, against Tk 10,000 before.[1] [3]

How enforcement will unfold

Offences are tried by the Labour Court on complaint. With floors on most fines, a single inspection that records several breaches can produce several complaints, each with a minimum penalty. The commercial lesson is to close findings in writing quickly and to treat every inspection report as a potential charge sheet. Our guide to the Labour Court in Bangladesh explains procedure and appeals.

The new Alternative Dispute Resolution Authority

New section 348C establishes an Alternative Dispute Resolution Authority for individual and collective labour disputes, notwithstanding anything in the Act or any other law. It is to be chaired by a retired District Judge or an experienced retired official or private-sector expert in labour rights and international labour standards, supported by panels of conciliators and arbitrators and overseen by a tripartite governing body notified in the Gazette.[1]

The Authority's procedure, the qualifications of its panels and the criteria for its governing body are all left to rules.[1] Until those rules exist, disputes continue to follow the conciliation and Labour Court route. Employers should, however, start drafting grievance procedures that can feed into the Authority once it opens, because early mediated resolution will usually cost less than a contested reinstatement claim. See our guide to alternative dispute resolution in Bangladesh.

Export processing zones and the EPZ Labour Act 2019

The Labour Act amendment 2025 Bangladesh does not reach the zones directly. Industries in export processing zones follow the Bangladesh EPZ Labour Act 2019, which gives itself overriding effect.[12] Around 516,000 workers were employed in EPZs in 2024, about two-thirds of them women.[13]

Where the regimes now diverge

The EPZ Act still provides maternity benefit of eight weeks before and eight weeks after delivery, and eleven days' festival holiday.[12] Workers organise through workers' welfare associations rather than trade unions, which labour advocates argue falls short of Conventions 87 and 98.[7] Groups with plants inside and outside a zone now run materially different maternity, holiday, separation and union regimes, and a single group policy will be wrong for one of them.

What is coming

At its March 2026 session the ILO welcomed the tripartite reform but urged completion of remaining work, including on the EPZ regime, by its March 2027 session.[8] Zone investors should assume that EPZ amendments are on the agenda and should avoid long-term commitments, such as collective agreements or policy guarantees, that assume the current welfare association model is permanent.

What is still missing: rules and enforcement capacity

Many reforms depend on rules not yet made: the harassment committee procedure, the ADR Authority, aspects of union verification and the new definitions. In April 2026 the BKMEA president said remaining ambiguities would have to be clarified in the labour rules.[6] Labour commentators have warned that without timely rules several progressive measures risk staying on paper.[7]

The former labour adviser has argued that the real test is administrative capacity: regular inspections, published enforcement data and impartial investigation of complaints.[8] For employers, the gap between law and enforcement is not a safe harbour. Buyers, auditors and the ILO process are all measuring compliance against the statute, not against what inspectors happen to check. Until new rules are issued, apply the Bangladesh Labour Rules 2015 for forms and procedure, read subject to the amended Act where they conflict.

Compliance steps for the Labour Act amendment 2025 Bangladesh

The order below is the one we use when bringing an employer's documentation into line with the amended Act.

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HR policy updates to make now

• Appointment letters: restate classification and supervisory authority against section 2(65) and section 2(49)(b).
• Service rules: update maternity, festival holiday, resignation and dismissal compensation, and resubmit for approval.
• Harassment policy: adopt the section 332 policy and constitute the section 332A committee with its two external members.
• Anti-blacklisting protocol: stop external sharing of leaver lists and restrict references.
• Union protocol: designate who responds to headcount requests and how union officers are managed in discipline.
• Payroll logic: 13 festival days, holiday-working compensation, 120-day maternity and new continuous-service rules.
• Pension decision: provident fund or Progoti, with a register of written demands and opt-outs.

For broader compliance mechanics, including registers, returns and inspections, see our labour law compliance checklist and our hub on labour law in Bangladesh.

What changed: 2018 text against the 2026 Act

The table compares the main provisions before and after the reforms. On a phone, scroll it sideways.

Two figures deserve emphasis. The union threshold change is the one most likely to alter industrial relations on the factory floor, and the resignation compensation change is the one most likely to alter cost. Both took effect when the Ordinance was gazetted and were confirmed by Parliament.[6]

What to watch in late 2026 and 2027

Four developments will shape how the Labour Act amendment 2025 Bangladesh works in practice: new labour rules under the amended Act; the first decisions of the Director General under section 196B and of the Labour Court on blacklisting; the formation of a new garment Wage Board under the three-year cycle; and EPZ reform ahead of the ILO's March 2027 session.[8] [10] Employers that update documents now, rather than waiting for the rules, will have the evidence they need if any of those processes reaches them first.

TRW's employment and labour practice reviews service rules, appointment letters and pay policies against the amended Act, advises on union registration and collective bargaining, and acts in the Labour Court. To discuss your workforce, contact TRW in Dhaka.

Frequently asked questions

Is the Bangladesh Labour (Amendment) Ordinance 2025 still in force?

The Labour Act amendment 2025 Bangladesh began as that Ordinance, and its substance is now law through the Bangladesh Labour (Amendment) Act 2026, Act No 43 of 2026, dated 10 April 2026, which Parliament passed on 9 April 2026 to convert the Ordinance into law with amendments.[2] [5]

How many workers are needed to register a trade union now?

At least 20 workers may apply, and membership must reach 20, 40, 100, 300 or 400 depending on whether the establishment employs up to 300, 500, 1,500, 3,000 or more workers.[1]

How many trade unions can exist in one factory?

No more than three registrations at any time in an establishment or group of establishments. The Ordinance had allowed five, but Parliament restored three.[1] [6]

What counts as blacklisting under the amended Labour Act?

Any list or database prepared by an employer or employers' association to disqualify a terminated worker, including casual and substitute workers, from future employment. It is an unfair labour practice.[1]

How long is maternity leave after the amendment?

120 days of maternity benefit, 60 before and 60 after delivery, for a worker with at least six months' service and fewer than two surviving children. EPZ enterprises still apply eight weeks on each side.[1] [12]

Do resigning workers now get compensation in their first years?

Yes. A permanent worker who resigns receives 7 days' wages per completed year for up to three years' service, 15 days for three to ten years and 30 days or gratuity for ten years or more.[1]

Is a provident fund now mandatory?

An employer with at least 100 permanent workers must form one if two-thirds of them demand it in writing, unless it enrols interested workers in the Progoti pension scheme with a 50 per cent employer contribution.[1]

What is the general penalty for breaching the Labour Act now?

Where no specific penalty applies, up to three months' imprisonment or a fine of Tk 25,000 to Tk 50,000, or both, under replaced section 307.[1]

Does the amendment apply inside export processing zones?

Not directly. Zone industries follow the Bangladesh EPZ Labour Act 2019, and the ILO has asked for remaining EPZ reforms by March 2027.[12] [8]

Are non-profit hospitals now covered by the Labour Act?

Yes. The exclusions for non-profit hospitals, clinics, diagnostic centres, hostels and care institutions have been deleted, while non-profit educational and research institutions remain excluded.[1] [3]