For Whom is the Labour Act 2006 applicable?

Labour disputes are common in Bangladesh, particularly in the ready-made garments sector. Most of the disputes appertain termination of employees or for wrongful treatment of the workers. The only legislation that governs matters such as employment of workers, relations between workers and employers, minimum wage, compensation, working hours, trade unions etc is the Bangladesh Labour Act, 2006 (2006 Act). The preamble to the 2006 Act clearly suggests that it applies only to "workers" and there are several misconceptions as to who can be regarded as a worker. 

The term "worker" has been defined under Section 2(65) of the 2006 Act which states that it means any person including an apprentice employed in any establishment or industry, either directly or through a contractor, by whatever name called, to do any skilled, unskilled, manual, technical, trade promotional or clerical work for hire or reward, whether the terms of employment are expressed or implied, but does not include a person employed mainly in an administrative or managerial capacity or one who is performing the role of a supervisory officer.  

The above definition is quite wide. Firstly, an apprentice or trainee would also fall within the confines of the definition of worker. 

Secondly, such a person may be employed in any establishment or industry. Here, establishment means any shop, commercial establishment, transport, industrial establishment or precincts where workers are employed. Similarly, industry means any business, trade, manufacture, calling, occupation, service or employment. 

Thirdly, the person may be appointed directly by the employer or through an agent/third party contractor. 

Fourthly, the person may be appointed to do any skilled, unskilled, manual, technical, trade promotional or clerical work for hire or reward in exchange of a salary or wage. 

Fifthly, the conditions of employment can be either in writing or oral. 

Now, let us address the part that causes the most confusion. Who are the persons employed "mainly in an administrative or managerial capacity or supervisory officer", for whom the 2006 Act shall not apply? 

The word "mainly" used in this particular provision essentially means that where the principal function of the person is administrative, supervisory or managerial in nature, the 2006 Act shall not apply to him. It is imperative to understand at the outset that the designation of the person/employee is irrelevant; the nature of work is of prime importance.           

The 2006 Act does not define who is a person working in an administrative or managerial capacity or who would amount to a supervisory officer. The definitions are provided under Rule 2 of the Bangladesh Labour Rules, 2015 (2015 Rules). Rule 2(1) (Nio) provides that a person would be working in an administrative or managerial capacity if he performs the following functions being authorized, in writing, by the employer or the management: (i) appoint workers or employees; (ii) determine salary and allowances, (iii) terminate service or remove from service; (iv) pay off final dues and (v) approve or regulate expenditures of the establishment. 

So far as the definition of supervisory officer is concerned, Rule 2(1)(Chha) provides, among other things, that such a person must perform the following the functions being authorized, in writing, by the employer or the management: (i) determine target of work or service of a section of a factory or establishment; (ii) control extent of work; (iii) regulate implementation of activities; (iv) evaluate or review work; (v) give directions to workers or supervise their work. 

While the functions of someone working in an administrative or managerial capacity or of a supervisory officer have been clearly laid down by the 2015 Rules, it does not clarify as to whether such a person has to perform all the functions mentioned or performing any one of the functions would suffice. It may be noted that Rule 2(1)(Nio) uses the conjunction "and", unlike, Rule 2(1)(Chha), prior to the last category of function which could mean that all the functions mentioned are required to be performed in order to amount to a person working in an administrative or managerial capacity. Unless there is any amendment made or circular issued by the relevant Government department clarifying this issue, the matter needs to be clarified by the judiciary. Since the 2015 Rules is relatively new, there is not much judicial guideline on the matter. 

It would be absurd if a person would be required to perform all the functions laid down under Rule 2(1)(Nio) or Rule 2(1)(Chha) respectively. This is essentially because in large corporations there are separate specialists for human resource and finance management. In such corporations, it is unlikely that one single person would both hire and fire employee and control the company's expenditures. 

It is important to mention that even if a person satisfies the requirements under Section 2(65) of the 2006 Act, the 2006 Act may still not apply to him. Section 1(4) clearly lays down that the 2006 Act shall not apply to specific establishments such as Government, security printing press, shops or stalls in public exhibitions, non-profit educational, training or research institution, etc. The 2006 Act will also not apply to workers working in some Government departments, seamen, agricultural farm having less than five workers, domestic maids etc. Nonetheless, the second provision to Section 3 of the 2006 Act, provides that even the establishments on whom the 2006 Act does not apply shall not make any policy, rule or house policy providing benefits less than the benefits accorded under the 2006 Act. 

Now the question arises, if one does not fall under the category of a worker, how will his employment or conditions of service be regulated? In such situations, the employment conditions are to be ascertained from the employment contract/appointment letter either express or implied. It may be further mentioned that establishments/corporations can have their own service rules regulating the broad rules of employment. But such rules cannot be less favourable than that provided under the 2006 Act. The service rules, in order to be effective, shall be approved by the Inspector General.    

The authors of the article are legal practitioners working for Stellar Chambers, formerly known as Hossain & Khan.