This article is co-authored by Saqeb Mahbub, Barrister-at-Law, Partner, and Afrin Sadia Nusrat, Associate, Mahbub & Company.
In November, 2025, Bangladesh’s interim government passed the Bangladesh Labour (Amendment) Ordinance, 2025, introducing extensive changes to the Bangladesh Labour Act that fundamentally impact the country’s labour framework. While the reform is positioned to strengthen worker rights and align with international standards under the ILO, its immediate implications for employers across all industries are profound and demanding.
The Ordinance broadens the law’s scope, mandates new administrative obligations and significantly enhances enforcement mechanisms. Employers, particularly those employing large numbers of workers, e.g. in the manufacturing sector, now face a substantially more complex and high-stakes compliance environment.
The Ordinance broadens the law’s scope, mandates new administrative obligations and significantly enhances enforcement mechanisms. Employers, particularly those employing large numbers of workers, e.g. in the manufacturing sector, now face a substantially more complex and high-stakes compliance environment.
Expanded Worker Definition
The labour law is only applicable to those falling within the definition of worker set by the law, as such only those are able to enjoy the rights provided in the law and also exercise those rights in the labour courts. One of the most consequential aspects of the new amendment is the expansion of the definition of “worker” in Section 2(65) of the Act.
The previous definition offered employers broad exclusions, explicitly stating that a worker “does not include a person mainly in a managerial, administrative [or supervisory] capacity”, meaning that a large category of white-collar employees working in these capacities did not enjoy labour law protection and were governed by employment contracts and company policy only. The new amendment removes this critical exclusion from the core definition. The new, more inclusive definition states:
“Worker” means any individual, including someone who is undergoing training… who is employed in any establishment or industry… to perform skilled, unskilled, manual, technical, business development, or clerical work as an employee or officer, by whatever designation called…”
The inclusion of “officer” and the new functional category of “business development” tasks immediately pulls vast numbers of previously exempt white-collar staff into the regulated category of “worker”. This means that, depending on the type of organization, a significant number of employees previously excluded from labour law protection could be considered entitled to labour law protections and enforcement mechanisms.
Extended Welfare Obligation for Maternity Benefit
The Maternity Benefit entitlement has been changed to expand welfare support for female workers. The Ordinance has replaced the earlier 8 (eight) week maternity benefit period with 60 (sixty) days and extended the total paid leave to 120 (one hundred twenty) days from the date of delivery. The 120 (one hundred twenty) day period is the total new paid leave entitlement, while the 60 (sixty) days is the standardized equivalent used to adjust administrative timeframes previously specified in weeks. It continues to require at least 6 (six) months of service before entitlement and maintains the exclusion where a woman has two or more surviving children, though it now refers to the mother as “mother/parturient.”
Payment methods for the maternity benefit are modernized as benefits may now be given in cash, bank deposit, or electronic fund transfer (EFT) and the wage calculation method is simplified, using monthly wages divided by 26 (twenty-six) instead of a 3(three) month average.
However, for other core provisions, such as notice requirements, proof of delivery, payment timelines and employer obligations in case of the worker’s death, all timeframes are adjusted from 8 (eight) weeks to 60 (sixty) days. The restriction on termination during pregnancy and post-delivery also aligns with this 60 (sixty) day period, reflecting modernization and digitalization of procedures without changing the basic protections.
This change primarily impacts employers by requiring them to update all internal HR manuals, policy documents and reporting software to replace “8 (eight) weeks” with “60 (sixty) days” to ensure full procedural compliance.
Simplified Organization of Trade Unions
The Ordinance fundamentally shifts the balance of industrial power by making it substantially easier for workers in larger establishments to organize and register a trade union.
Under the prior requirement, a trade union could only be registered if at least 20% of the total workers in the establishment are its members.
The new structure specifies clear numerical ceilings for membership requirements based on the total worker count. As little as twenty workers in an establishment may now jointly apply to register a trade union. However, the union must meet specific membership thresholds based on the total number of workers in the establishment. A minimum of 20 members for up to 300 workers, 40 members for 301 to 500 workers, 100 members for 501 to 1500 workers, 300 members for 1051 to 3000 workers and 400 members for establishments with more than 3001 workers must be registered in order to register a trade union.
Mandatory Provident Fund
The Ordinance converts the establishment of a Provident Fund from an optional provision to a statutory obligation once a minimum threshold of workers is reached, introducing substantial administrative and financial responsibilities for management.
The previous provisions regarding provident funds were optional and were not triggered until 75pc of the workers united to demand its establishment. The new Ordinance now makes it mandatory for factories and establishments employing 100 or more permanent workers to establish and maintain a Provident Fund.
The amendment also introduces an option for workers to participate in the national “Progoti” pension scheme as an alternative to the employer-constituted provident fund. The investment provisions have been simplified, limiting investments to government-approved sectors, while the earlier version detailed specific investment categories such as ICB Mutual Fund Certificates or government securities.
Mandatory Equality Mechanisms
The Ordinance converts the establishment of a Provident Fund from an optional provision to a statutory obligation once a minimum threshold of workers is reached, introducing substantial administrative and financial responsibilities for management.
The previous provisions regarding provident funds were optional and were not triggered until 75pc of the workers united to demand its establishment. The new Ordinance now makes it mandatory for factories and establishments employing 100 or more permanent workers to establish and maintain a Provident Fund.
The amendment also introduces an option for workers to participate in the national “Progoti” pension scheme as an alternative to the employer-constituted provident fund. The investment provisions have been simplified, limiting investments to government-approved sectors, while the earlier version detailed specific investment categories such as ICB Mutual Fund Certificates or government securities.
Equal Pay Mandate
The Ordinance explicitly mandates equal pay for equal work, prohibiting wage discrimination based on gender or disability.
Harassment Framework
The responsibilities against violence and harassment in the world of work have been significantly expanded. The previous provision was simply exclusive to the protection of women. The amendment introduced broad and mandatory duties for the owner, employer and authority to ensure that the workplace environment is not hostile and are required to formulate and implement a workplace policy against violence and harassment which is applicable for everyone.
In addition, the mandatory requirement of establishment of a “Committee for disposal of complaints on discrimination, violence, and harassment” has been added.
Resolving Disputes via ADR
Under the new ordinance, the requirement of establishing an Alternative Dispute Resolution (ADR) Authority dedicated to the resolution of individual and collective labour disputes has been added. This Authority is mandated to operate on the crucial principles of impartiality and fairness, notwithstanding any other existing laws.
While the Labour Courts established under the Bangladesh Labour Act retain their statutory jurisdiction, the introduction of a dedicated ADR Authority reflects a legislative intent to strengthen pre-adjudicatory dispute resolution mechanisms. The ADR framework is designed to operate alongside, rather than in substitution of the Labour Courts.
Conclusion
In conclusion, the Bangladesh Labour Act (Amendment) Ordinance, 2025, marks a significant transformation in the country’s labour landscape, expanding protections for workers while imposing more rigorous compliance obligations on employers. From broadened worker definitions and enhanced maternity benefits to mandatory social security and equality frameworks, the Ordinance modernizes labour regulation to align with rising international standards for better workplaces. Employers must now proactively adapt their policies, processes, and reporting mechanisms to meet these heightened requirements, ensuring both legal compliance and a fair, safe, and inclusive workplace. The changes underscore a new era where worker rights and organizational accountability are deeply intertwined.
