The scheme applies to companies that, on the last day of the accounting year, meet thresholds set by the Labour Act based on paid-up capital or the value of fixed assets, together with certain other industrial undertakings. Whether a particular company is covered can depend on its sector, its legal form and whether a separate arrangement applies to its industry, and some sectors have disputed coverage in the courts. Status should be reviewed each year, because a growing company can cross the thresholds. We confirm coverage and advise on the steps required from the first year it applies.

The contribution is generally five per cent of the company's net profit for the year, paid within the time allowed after the year end, and allocated between the Participation Fund, the Welfare Fund and the Bangladesh Workers Welfare Foundation Fund in the proportions set by the Act. The starting point is the audited profit, but questions often arise about which items are included, how the contribution itself is treated in the accounts and how group transactions affect the figure. We work with auditors to settle a defensible methodology and document it for future years.

Payments from the Participation Fund are made to workers who meet the eligibility requirements, generally including a minimum period of service during the relevant year, and are distributed in equal shares rather than by salary level. Managerial and administrative staff who fall outside the statutory definition of worker are generally not eligible. Questions arise about temporary, contract and outsourced staff, workers who resigned or were dismissed during the year, and the heirs of workers who have died. We advise trustees on each category and prepare clear eligibility lists and payment records.

Trustees must hold the funds separately from the company, keep proper books of account, invest only in permitted ways, ensure annual audit, distribute the Participation Fund on time and use the Welfare Fund for its intended purposes. They must act in the interests of the beneficiaries rather than the company or any group of workers. Trustees who allow funds to be used for the company's working capital, or who delay distribution without good reason, risk complaints and proceedings. We provide trustee training and written procedures that make these duties manageable in practice.

Unpaid contributions remain a liability and can be claimed by workers, pursued by the authorities and discovered in audits or due diligence. Workers and former workers may bring claims in the labour court, and inspectors may issue notices or initiate proceedings. The longer arrears remain, the harder they are to calculate and the more workers are affected. We help companies quantify historical liabilities, decide how to regularise them, negotiate with worker representatives and record settlements properly, so that the matter is closed rather than left to resurface later.

Not always. The Labour Act provides for separate arrangements for certain export-oriented and foreign exchange earning industries, under which contributions may be directed to a central or sector fund rather than a company-level scheme, on terms set by law and rules. Companies in export processing zones also need to consider the EPZ labour regime. The interaction between these arrangements and the general rules can be complex, particularly for groups with both domestic and export businesses. We review each entity's position and advise on which arrangement applies.

Yes. Workers and former workers can bring claims for unpaid Participation Fund entitlements and related disputes before the labour courts, and collective claims involving many workers are increasingly common. Claims may also challenge the calculation of net profit, eligibility decisions or the conduct of trustees. Time limits and procedural requirements apply, so prompt advice matters for both sides. We defend companies and trustees, test the claimants' calculations and eligibility, and explore settlement where the claim has merit, including structured payments over time where cash flow requires it. Workers Participation Fund claims need prompt review.

In a share purchase, the buyer inherits the target's liabilities, including unpaid contributions, undistributed funds and pending claims, so these should be investigated in due diligence. Buyers should check coverage, calculation methodology, trust deeds, trustee minutes, audited fund accounts and distribution records for several years. Identified issues can be dealt with through price adjustments, specific indemnities, escrow or conditions requiring regularisation before completion. We conduct this review for investors and draft protective provisions, and we advise sellers on preparing a clean position before a sale process begins.