Bangladesh has just rewritten the rules of employment. The Bangladesh Labour (Amendment) Act 2026 was passed by Parliament in April 2026 and took effect from 10 April 2026, following the Bangladesh Labour (Amendment) Ordinance 2025, promulgated on 17 November 2025 under the Interim Government.
Together, the Ordinance and the Act introduced roughly 90 legislative changes to the Bangladesh Labour Act 2006 through amendments, modifications, deletions and insertions.
For HR and payroll leaders, this is not a tidying exercise. Worker classification, union thresholds, leave entitlements, end-of-service calculations, committee structures and penalty exposure have all shifted at once. Here is what changed, and the sequence in which HR teams should respond.
Why the 2026 amendment happened
Three pressures converged. The first was international legal accountability: a formal complaint filed under Article 26 of the ILO Constitution in June 2019 alleged systemic non-compliance with Conventions No. 81, No. 87 and No. 98, and the Government submitted a time-bound reform roadmap in May 2021. In November 2025, Bangladesh ratified Conventions C155 and C187 on occupational safety and health, and C190 on violence and harassment — ratifications that created immediate domestic implementation obligations.
The second was domestic. The Labour Reform Commission led by Syed Sultan Uddin Ahmed, established after the 2024 mass uprising, submitted its report in April 2025 and provided the drafting architecture for both the Ordinance and the Act.
The third is commercial. Bangladesh is the world’s second-largest apparel exporter, and buyers sourcing from the country are increasingly governed by mandatory human rights due diligence regimes in the EU, Germany and France. Domestic law that falls short of ILO standards creates legal exposure for those buyers — and therefore audit pressure on their suppliers.
Change 1: who counts as a “worker” has widened
The amended definition of “worker” under Section 2(65) broadens coverage by focusing more closely on the nature of the work performed rather than job designation alone. Persons performing skilled, unskilled, manual, technical, promotional or clerical work may qualify as workers regardless of title, while persons exercising managerial, administrative or supervisory functions remain outside the definition. Employers should therefore assess actual duties and responsibilities rather than relying solely on titles such as “officer”, “executive” or “manager”.
The practical effect is that workforce classification should be reviewed against employees’ actual functions. Titles and appointment wording remain relevant evidence, but they are not a substitute for assessing whether the role is genuinely managerial, administrative or supervisory. Employers in sectors with large populations of officers, executives and managers should review classifications carefully because worker status can affect leave, compensation, end-of-service and trade union rights.
Managerial, administrative and supervisory personnel are not left outside the framework entirely: the amended Section 2(15) extends the definition of “trade union” to associations of persons employed in the establishment who fall outside the worker definition, and Sections 175 and 176 give managerial, administrative and supervisory personnel the right to form associations relating to their professional interests.
Separately, Section 175(1) extends trade union rights to self-employed workers and individuals engaged through digital labour platforms, and the Act extends partial coverage — accident compensation and union rights — to seafarers, domestic workers and agricultural workers. The Act also extends coverage to previously excluded care-based and service institutions, including hospitals, clinics and diagnostic centres.
Change 2: trade union registration is now a fixed-number test
The percentage-based registration threshold has been replaced by a five-tier fixed-number system under Section 179(2):
- Up to 300 workers: 20 members
- 301 to 500 workers: 40 members
- 501 to 1,500 workers: 100 members
- 1,501 to 3,000 workers: 300 members
- Above 3,000 workers: 400 members
A new Section 179(5) caps registrations at three trade unions in any single establishment or federation of establishments. Section 180(1)(b) also restores the provision allowing 10 per cent representation of external workers in industrial sector establishments.
For smaller and mid-sized employers, the barrier to union formation has fallen materially. Organising is now a realistic prospect in establishments where it previously was not.
Change 3: blacklisting and anti-union conduct carry direct enforcement
The list of unfair labour practices under Section 195(1) has been extended to cover blacklisting of workers or trade union members, the establishment of employer-controlled unions, and financial or other support intended to influence union activity. Section 196A now treats employer retaliation against a worker who files an unfair labour practice complaint as anti-union discrimination in its own right.
The enforcement change is the significant one. A new Section 196B empowers the Director General of Labour to order cessation of the conduct and to award compensation and restitution directly, without the worker needing to initiate Labour Court proceedings. Termination that is procedurally correct under Section 26 — where the 120-day notice period for monthly-rated permanent workers is unchanged — can still trigger this route if the reason is union-related. Documented, defensible justification for every dismissal now matters more than the notice paperwork.
Check-off obligations have also widened. Under Section 204, employers must deduct subscriptions for members of any registered trade union, not only the collective bargaining agent, and deposit the full amount within fifteen days.
Change 4: leave, lay-off and end-of-service entitlements have moved
- Maternity benefit under Section 46 rises from 112 days to 120 days, structured as 60 days pre-delivery and 60 days post-delivery.
- Festival holidays under Section 118(1) increase from 11 to 13 days.
- Lay-off eligibility under Section 16 falls from one year of continuous service to three months, with compensation reported to be stabilised at a minimum of 50 per cent of basic wages regardless of lay-off duration. Employers should confirm the full formula against the gazetted text and applicable rules before configuring payroll.
- Death compensation eligibility falls from two years of service to one year.
- Compensation for dismissed workers is newly introduced: workers with at least one year of service who are dismissed are entitled to 15 days’ wages for each completed year of service.
- Resignation benefits under Section 27(4) are now graduated by length of service. Workers with at least three years of continuous service receive 7 days’ wages for each completed year; those with more than three but less than ten years receive 15 days’ wages for each completed year; and those with ten years or more receive 30 days’ wages for each completed year, or gratuity where applicable, whichever is higher.
- The wage revision cycle moves from every five years to every three years.
- Notice for eviction from employer-provided accommodation extends from 60 days to six months under Section 32A.
Each of these lands in payroll configuration and end-of-service provisioning, not in policy documents alone. Accrual methodologies and reserve calculations need to be reworked.
Change 5: safety, dignity and mandatory complaint committees
The Act introduces statutory definitions of forced or compulsory labour (Section 2(12A)), gender-based violence (Section 2(12B)) and sexual harassment (Section 2(52A)), together with an absolute prohibition on forced labour under Section 345(Ga) and a prohibition on discriminatory conduct under Section 345A. It also replaces the term “female” with “woman” throughout.
Two structural obligations follow. Sections 332 and 332A require every establishment to constitute a five-member complaint committee, chaired by a woman and with a majority of women members, to receive and investigate complaints of violence, harassment and sexual harassment. Section 90A requires safety committees in all establishments with 50 or more workers, extending a requirement that previously applied only to factories. Section 61A gives workers an explicit right to refuse dangerous work without retaliation, a protection that did not previously exist.
Change 6: a new dispute resolution and social dialogue architecture
Section 348C establishes an Alternative Dispute Resolution Authority drawing on retired judges and labour relations specialists, offering conciliation and arbitration as distinct pathways with the possibility of binding awards. Section 348B provided for a National Social Dialogue Forum, which the Government is reported to have formally constituted by gazette notification on 13 August 2026 [gazette reference to be confirmed before publication].
Section 203A provides a legal framework for sectoral and national collective bargaining, with a written response required within ten days of a request. The Act also establishes a workplace accident compensation fund [confirm the statutory name against the gazette; sources variously use “Workplace Accident Compensation Fund” and “Employment Injury Scheme Fund”].
The ADR Authority is not yet operationally constituted. Until its rules and panel composition are prescribed, disputes continue through the existing Labour Court system.
Change 7: penalties are now criminal exposure, not a cost of doing business
The penalty regime has been recalibrated by degree of seriousness.
The general residual penalty under Section 307 rises from BDT 5,000 to a range of BDT 25,000 to BDT 50,000, with up to three months’ imprisonment. Non-payment of minimum wage under Section 289(1) attracts BDT 50,000 to BDT 100,000 or up to one year’s imprisonment, and the court may direct the fine be paid to the affected worker. The same range applies under Section 291(1) to unfair labour practices and anti-union discrimination. Section 309 escalates to up to four years’ imprisonment where a violation causes loss of life, and up to two years for grievous injury.
The shift in kind matters more than the numbers. Labour penalties in Bangladesh can no longer be absorbed as a predictable operating cost.
What HR must do now: a practical sequence
Within 30 days
- Re-classify your workforce. Review employees currently treated as outside the worker definition against their actual duties and responsibilities. Do not rely on job title or appointment wording alone; assess whether the role is genuinely managerial, administrative or supervisory.
- Constitute the complaint committee. Five members, a woman as chairperson, a majority of women. An establishment without one is already non-compliant.
- Reconfigure leave. Update maternity entitlement to 120 days with the 60/60 split, and festival holidays to 13 days, in your HR system rather than in policy text alone.
Within 60 days
- Recalculate end-of-service reserves. Lay-off eligibility at three months, death compensation at one year and graduated resignation benefits all change the provisioning model.
- Update the check-off process. Deductions for all registered unions, deposited within fifteen days, with a verifiable audit trail.
- Refresh contract templates and the employee handbook. Ensure job descriptions and appointment documents accurately reflect actual duties, particularly where a role is treated as managerial, administrative or supervisory.
- Establish or verify the safety committee where the establishment has 50 or more workers.
Within 90 days
- Train line managers. Supervisors need to understand what constitutes union interference, retaliation and blacklisting — most exposure under Sections 195, 196A and 196B originates at supervisory level, not in the HR function.
- Build an industrial relations posture. With registration thresholds lowered, direct communication and functioning grievance mechanisms are the practical alternative to organising driven by unmet concerns.
- Prepare for supplier audits. Buyers with Bangladesh supply chains will test registration status, anti-blacklisting policy, committee constitution and leave compliance.
What is still unsettled
Several points remain open, and HR teams should treat them as watch items rather than settled positions.
The implementing rules for the violence and harassment framework have not yet been prescribed, leaving investigation timelines, evidentiary standards and appeal mechanisms ambiguous. The ADR Authority exists in law but not yet in practice.
The Bangladesh Export Processing Zone Labour Act 2019 has not been amended in parallel, so EPZ workers remain outside the new framework. The provident-fund framework also changed between the 2025 Ordinance and the final Act. The Ordinance required employers with 100 or more permanent workers to establish a provident fund, with participation in the Progoti universal pension scheme available as an alternative.
The final position under the Act, including the application threshold and the effect of Progoti participation, should be confirmed against the gazetted text before employers act on it. The union registration cap was reduced from five to three in the transition. And the informal sector, which accounts for the large majority of Bangladesh’s workforce, remains outside the Act altogether.
Verify any provident fund, minimum wage or sector-specific position against the gazetted text and the implementing rules before acting on it. Commentary on this amendment has been uneven, and several widely circulated summaries contradict one another.
Turning compliance into an operating capability
The recurring difficulty with an amendment of this scale is not understanding it. It is holding it consistently across every employee record, every payroll run and every audit request — while the rules underneath it continue to develop.
That is a systems question. Worker classification needs to be a field that drives entitlement logic, not a judgement made case by case. Leave rules need to be configured once and applied uniformly. End-of-service calculations need to reflect the amended formulas automatically. Deduction and deposit timelines need to be evidenced, not asserted. And when a buyer or an inspector asks what happened and when, the answer should come from a record rather than a reconstruction.
MiHCM works with employers across Bangladesh and over 20 other markets in Asia, supporting HR and payroll teams through exactly this kind of regulatory transition. MiHCM Enterprise is built to absorb statutory change without disrupting operations — so that HR teams can spend their attention on the judgement calls the law now demands, rather than on the arithmetic.
Talk to the MiHCM Bangladesh team about aligning your HR and payroll operations with the 2026 amendment.
Transparency disclaimer and sources:
This article is written for general information and does not constitute legal advice. The Bangladesh Labour (Amendment) Act 2026 and its implementing rules remain subject to ongoing development, and several provisions await subsidiary regulation. Employers should seek qualified local legal counsel before acting on any provision discussed here. Section numbering and figures in this article are drawn from the sources listed below and should be verified against the gazetted text.
Sources consulted:
- The Legal Circle, “The Rules Have Changed — Bangladesh’s 2025–2026 Labour Law Reforms And What It Means For Businesses”, published via Mondaq, 11 June 2026.
- Accord Chambers, “Is Your ‘Manager’ Actually a ‘Worker’? The Latest Bangladesh Labour Law Perspective”, 17 May 2026.
- Taslima Akhter (member, Labour Reform Commission 2024), “A closer look at Bangladesh’s new labour law: Gains and gaps”, The Daily Star, 30 April 2026.
- UNI Global Union statement on the Bangladesh Labour (Amendment) Act 2026, reported by the Business & Human Rights Resource Centre, April 2026.
- International Labour Organization — Conventions No. 81, 87, 98, 155, 187 and 190, and the Article 26 complaint procedure.
- K.M. Nasim (member, Labour Reform Commission 2024), “A Game Changer? Evaluating Bangladesh’s Labour Reform”, Asian Labour Review, 5 May 2026.
- Bangladesh Government Press — Bangladesh Labour (Amendment) Act 2026, Extraordinary Gazette [Act number and gazette date to be confirmed before publication].
- Prothom Alo, reporting on the final Parliamentary amendments to worker definition and provident-fund/Progoti provisions, April 2026.
- The Financial Express, reporting the formal constitution of the National Social Dialogue Forum by gazette notification, 13 August 2026.
- WTW, “Bangladesh: New mandate for provident funds for large employers”, March 2026.
