A Comprehensive Guide to Drafting Employment Contracts in Bangladesh

Employment agreements play a crucial role in defining the relationship between employers and employees in the Bangladesh Labor Law 2006. While there isn't a specific law dictating different types of employment agreements, the Bangladesh Labor Act 2006 (BLA 2006) provides the framework for various employment arrangements. This article explores the types of labor law 2006 employment agreements, essential clauses, probationary periods, confidentiality and non-compete clauses, and the process of drafting a compliant employment contract under Bangladeshi labor law 2006.

Relevant Laws Governing Employment in Bangladesh

1. The Bangladesh Labour Act, 2006

The Bangladesh Labour Act, 2006 (BLA 2006) is the primary legislation governing employment conditions for "workers." According to Section 2(65) of the Act, a "worker" means any person, including an apprentice, employed in any establishment or industry, either directly or through a contractor, to do any skilled, unskilled, manual, technical, trade promotional, or clerical work for hire or reward. However, it excludes individuals employed mainly in administrative, managerial, or supervisory roles.

2. The Contract Act, 1872

If an employee is not classified as a "worker" under the BLA 2006, their employment relationship is governed by the Contract Act, 1872, which outlines the contractual obligations between employers and employees.

3. The Companies Act, 1994

For employees holding executive or managerial positions in a company, the Companies Act of 1994 may apply, particularly in cases involving board-appointed officers or directors.

Types of Employment Agreements

1. Permanent Employment Contracts (Indefinite Contracts)

Permanent employment contracts are the most common type of employment agreement in Bangladesh. These contracts offer long-term employment security, with termination procedures outlined in the Labor Act. Key characteristics include:

·       No pre-defined end date for employment.

·       Salary and benefits are determined by the contract and the BLA 2006.

·       Termination must follow legal procedures.

2. Fixed-Term Contracts (Temporary Contracts)

Fixed-term contracts have a defined duration of employment specified in the contract. These are typically used for:

·       Project-based work.

·       Seasonal employment.

·       Trial periods (though probation within permanent contracts is more common).

·       Automatic termination upon contract expiry unless extended by mutual agreement.

3. Apprenticeship Agreements

Apprenticeship agreements focus on vocational training and skill development. These agreements include:

• A fixed training period.
• An allowance instead of a full salary.
• Compliance with the Apprenticeship Rules 2018.
  
  

4. Casual Employment

Casual employment is an informal arrangement used for short-term or sporadic work. This type of employment:

• Provides limited legal protections compared to formal contracts.
• It is common in sectors like agriculture and day labor.
  
  

5. Collective Bargaining Agreements

Collective bargaining agreements apply to employees represented by a trade union. These agreements:

• Define terms related to wages, benefits, working hours, and grievance procedures.
• Supersede individual employment contracts.
  
  

Essential Clauses in an Employment Agreement

A well-drafted employment agreement should contain the following essential clauses:

1. Identification of Parties

• Specify the employer and employee with full names and contact details.
• Mention if the employer is acting on behalf of another entity.

2. Commencement of Employment and Contract Type

• Define the start date of employment.
• Specify whether it is a permanent, fixed-term, apprenticeship, or any other type of contract.

3. Job Description and Responsibilities

• Clearly outline the employee’s job title, department, and primary responsibilities.
• May include specific responsibilities such as product sourcing, order management, relationship management, quality assurance, production monitoring, and documentation.

4. Location and Working Hours

• Define the work location and any possible need for factory visits.
• Specify working hours, including overtime expectations and entitlements.

5. Remuneration and Benefits

• Mention the salary structure, allowances, and bonuses.
• Include any performance-based incentives and festival bonuses.

6. Leave Entitlements

• Specify annual leave, sick leave, vacation leave, and maternity leave provisions.
• Define policies for unauthorized absences and potential consequences.

7. Probation Period & Confirmation

• Standard probation period of 6 months with the possibility of extension.
• Either party may terminate with 15 days’ notice during probation.
• Confirmation requires a satisfactory performance evaluation.

8. Termination and Resignation

• Employer may terminate with one month’s notice or salary in lieu.
• An employee may resign with two months’ notice or equivalent salary compensation.
• Grounds for summary dismissal include misconduct, negligence, or contract breaches.

9. Confidentiality & Non-Compete Clauses

• Employees are bound to maintain confidentiality regarding company operations and sensitive business information.
• Post-employment non-compete clauses are typically unenforceable under Bangladeshi labor law 2006.

10. Dispute Resolution and Governing Law

• Employment disputes shall be resolved through arbitration as per the Arbitration Act, 2001.
• The contract shall be governed by Bangladeshi labor law 2006 and subject to the jurisdiction of the courts in Dhaka.

Employment agreements in Bangladesh must comply with the BLA 2006, the Contract Act, 1872, and, where applicable, the Companies Act, 1994, to protect both employers and employees. A well-structured employment contract should clearly define the rights, obligations, and expectations of both parties. Ensuring compliance with Labor Law 2006 requirements and best practices will help mitigate risks and foster a stable working relationship.