Terminating Employment in Bangladesh: An Employer's Guide
Introduction and governing law
An employer in Bangladesh may end a worker's employment only through one of the routes the Bangladesh Labour Act, 2006 (BLA) recognises, and each route carries its own notice, procedure and payment obligations. Getting the route wrong is the most common reason a termination is set aside by the Labour Court.
The law as of this guide:
Bangladesh Labour Act, 2006, as amended in 2013, 2018, by the Bangladesh Labour (Amendment) Ordinance, 2025 (gazetted 17 November 2025) and by the Bangladesh Labour (Amendment) Act, 2026 (in force from 10 April 2026). Together the 2025–2026 reforms made roughly 90 changes.
Bangladesh Labour Rules, 2015, which supply procedure and forms.
The establishment's own service rules (s.3), which may add benefits but can never be less favourable than the BLA.
Who is covered. The BLA protects every "worker" (s.2(65)). Since the 2025–2026 reforms, the test is the work actually done, not the job title: anyone employed directly or through a contractor for skilled, unskilled, manual, technical, clerical, promotional or business-development work is a worker, even if called an "officer" or "executive". Persons employed mainly in managerial or administrative capacity, or entrusted in writing with supervisory functions, remain outside the definition. Their termination is governed by the employment contract, service rules and general law, but the default is now inclusion, so employers should not assume a senior title takes someone outside the Act.
Not covered here: workers in Export Processing Zones (governed by the Bangladesh EPZ Labour Act, 2019, which was not amended in parallel), government servants, and employees of statutory bodies with their own service regulations.
Courts decide worker status from duties, not designation. In Rupali Bank Ltd. v. Tafazal Hossain (44 DLR (AD) 260) a bank's assistant cashier was a worker whose only forum was the Labour Court. In Bangladesh Parjatan Corporation v. Ali Hossain (34 BLD (AD) 135) an Electrical Foreman with supervisory functions was held not to be one under the older definition. Under the amended s.2(65), keep accurate job descriptions: the Parjatan Corporation had none, and the Court had to decide on general principles.
Classes of workers
Notice periods and end-of-service payments depend on the worker's class under s.4, so confirm the class from the appointment letter and service record before taking any step.
| Class | Meaning | Termination relevance |
|---|---|---|
| Permanent | Engaged on a permanent basis, or has completed probation | Full notice and compensation rights under ss.20, 22, 26 |
| Probationer | On trial before confirmation: 6 months for clerical work, 3 months for others (extendable once by 3 months for skilled work if not yet assessed) | May be released during probation without the s.26 compensation; continuing beyond the period without written extension makes the worker permanent |
| Temporary | Engaged for work of an essentially temporary nature, likely to finish in a limited period | Shorter notice under s.26; ends naturally on completion of the work |
| Badli | Replaces a permanent worker or probationer who is temporarily absent | Becomes permanent after 1 year of continuous service |
| Casual | Engaged for casual work | Minimal notice rights; check lay-off rules |
| Seasonal | Engaged for the duration of a season | Ends with the season |
| Apprentice | Engaged as a trainee, paid an allowance | Governed by the apprenticeship terms |
Two practical points. First, a worker whose probation has lapsed without a written confirmation or extension is treated as permanent, so the s.26 notice and compensation apply. Second, calling a long-serving worker "temporary" or "contractual" does not change the legal class if the work is of a permanent nature.
The lawful routes at a glance
The BLA recognises eight ways a worker's employment ends; the employer controls five of them, and each needs its own paperwork.
| Route | Section | Initiated by | Reason needed? | Notice to worker | Statutory payment (permanent worker) |
|---|---|---|---|---|---|
| Termination simpliciter | s.26 | Employer | No | 120 days (monthly-rated) / 60 days (others), or pay in lieu | 30 days' wages per completed year, or gratuity if higher |
| Retrenchment | s.20 | Employer | Yes: redundancy | 1 month, or pay in lieu (worker with 1+ year) | 30 days' wages per completed year, or gratuity if higher |
| Discharge | s.22 | Employer | Yes: medically certified incapacity | Written order | 30 days' wages per completed year, or gratuity if higher (1+ year) |
| Dismissal | ss.23–24 | Employer | Yes: proved misconduct or criminal conviction | None, after a full inquiry | None beyond accrued dues |
| Removal (lesser penalty) | s.23(2) | Employer | Yes: misconduct with mitigating factors | None, after a full inquiry | 15 days' wages per completed year (1+ year) |
| Resignation | s.27 | Worker | No | Worker gives 60 days (permanent) | Graded compensation by length of service (see Resignation) |
| Retirement | s.28 | Age 60 | No | Not applicable | Service benefits under rules and contract |
| Death in service | s.19 | Not applicable | Not applicable | Not applicable | 30 days' wages per year (45 days if death at or from work), payable to nominee |
Whatever the route, the employer must also pay accrued dues, issue a service certificate and settle within 30 working days (see Final settlement).
Termination simpliciter (section 26)
An employer may end a worker's employment without giving any reason, provided it gives the full written notice (or pays wages in lieu) and pays the statutory compensation. This route was left unchanged by the 2025–2026 reforms.
| Worker | Notice from employer |
|---|---|
| Permanent, monthly-rated | 120 days |
| Permanent, other | 60 days |
| Temporary, monthly-rated | 30 days |
| Temporary, other | 14 days |
Obligations
Issue a written notice signed by an authorised person, stating the effective date and that termination is under s.26.
Either let the notice period run, or pay basic wages (plus dearness and ad hoc allowance, if any) for the whole notice period in lieu.
Pay a permanent worker compensation of 30 days' wages for every completed year of service, or the gratuity under the service rules if that is higher (s.26(4)). This is in addition to provident fund and other dues.
Settle all dues within 30 working days (s.30).
Limits the courts enforce
Section 26 is not a back door for punishment. If the real reason is alleged misconduct, the courts treat the order as a disguised dismissal and set it aside unless the s.24 procedure was followed. Do not refer to misconduct in a s.26 notice.
A s.26 termination that is in retaliation for trade union activity, or for filing a labour complaint, is anti-union discrimination (s.196A) even if notice was given and paid. The Director General of Labour can now order reinstatement and compensation directly under the new s.196B, without a Labour Court case.
Keep a contemporaneous, neutral business record of why the decision was taken (restructuring, role change, performance concerns raised in the ordinary course). It is not required by s.26 itself but is the employer's best defence against a discrimination or victimisation claim.
What the courts have held. In Bangladesh Tea Estate Ltd. v. Bangladesh Tea Estate Staff Association (28 DLR (AD) 190) the Appellate Division accepted that a court will not normally go behind a termination simpliciter, but upheld reinstatement with back wages because the termination was really victimisation of a union unit representative. In Mongla Port Authority v. S.M. Fazlul Huq (25 BLD (AD) 291) the Court confirmed that no show-cause notice is needed for a plain termination, yet refused to disturb findings that the order was removal "under the garb of termination", issued out of malice the day after the employee obtained an attachment order against the chairman. Timing and context are evidence: a termination that closely follows a complaint, a union demand or a court order against management invites this inference.
Later decisions apply the same test:
Union leaders. In Bangladesh Parjatan Corporation v. Ali Hossain (34 BLD (AD) 135) the union president was terminated simpliciter after protesting mass transfers. The Court held it was dismissal in the garb of termination and ordered reinstatement with back wages: "under no circumstances" may the termination power be used to punish an offence.
After starting an inquiry. In Abdul Baque v. Government of Bangladesh (68 DLR (AD) 235) employees were suspended and charge-sheeted, and denied the charges; the employer then terminated them simpliciter instead of finishing the inquiry. The orders were set aside. Once you start disciplinary proceedings, finish them.
Ulterior purposes. Terminating officers for refusing a golden handshake while vacancies existed (Bangladesh Jute Mills Corporation v. S.A.H. Monowar Ali, 5 LG (AD) 249), or to make way for a favoured officer through an off-agenda board decision (Chittagong Development Authority v. Engineer Abul Kalam, 19 BLD (AD) 9), was struck down as unfair or mala fide.
A clean order still matters. In Bangladesh Bank v. Mohammad Abdul Mannan (46 DLR (AD) 1) a notice termination was upheld because the order carried no stigma, referred to no allegation and no mala fides was shown, even though board papers mentioned allegations. Keep s.26 letters neutral and free of any reference to misconduct.
Statutory and state-controlled employers face additional limits: terminations without hearing or applicable rules (Bangladesh Biman Corporation v. Chowdhury Mohammad Yusuf, 31 DLR (AD) 305) and unguided "without cause" regulations (Abdul Baque) have been declared void under constitutional review.
Retrenchment and lay-off (sections 16 and 20)
Retrenchment ends employment because the worker is surplus to requirements; it must follow a fixed order of selection and give one month's reasoned notice.
Retrenchment of a worker with at least 1 year of continuous service (s.20)
Give the worker one month's written notice stating the reasons, or pay wages for the notice period in lieu.
Send a copy of the notice to the Chief Inspector (DIFE) and to the collective bargaining agent (CBA), if any.
Apply "last come, first go": within the category of workers affected, retrench the most recently employed first, unless you record written reasons for departing from that order.
Pay compensation of 30 days' wages for every completed year of service, or gratuity if higher.
If you re-employ within one year, offer the work first to retrenched workers of that category (s.21).
Lay-off (s.16) is a temporary inability to give work (shortage of power, raw material, breakdown, natural calamity). It does not end employment. After the 2025–2026 reforms, a worker with only 3 months' continuous service (previously 1 year) qualifies for lay-off compensation, set at a minimum of 50% of basic wages plus dearness allowance. If lay-off continues beyond the statutory period, the employer may retrench under s.20 rather than continue paying lay-off compensation, and must then pay retrenchment compensation in full.
For large-scale reductions, consult the CBA or participation committee early and document the business reasons; a retrenchment that targets union members falls foul of s.195 and s.196A.
Discharge for incapacity (section 22)
A worker may be discharged for physical or mental incapacity, or continued ill-health, only on the certificate of a registered medical practitioner.
Obtain a written medical certificate confirming the incapacity. Where the worker disputes it, allow a second opinion.
Consider whether the worker can be accommodated in other suitable work; the 2025–2026 reforms expressly prohibit disability discrimination, so discharge should be the last option, not the first.
Issue a written discharge order referring to the certificate.
Pay a worker with at least 1 year of continuous service 30 days' wages for every completed year, or gratuity if higher, plus all other dues.
If the incapacity results from an accident at work, separate compensation under the employment-injury provisions (Chapter XII) is also payable; discharge does not extinguish it.
Dismissal for misconduct (sections 23 and 24)
A worker may be dismissed without notice or pay in lieu only after misconduct is proved through the s.24 inquiry, or after conviction for a criminal offence. A defect in the procedure is usually fatal to the dismissal, however serious the misconduct.
What counts as misconduct (s.23(4), in summary)
Wilful insubordination or disobedience of a lawful order, alone or with others
Theft, fraud or dishonesty in connection with the employer's business or property
Taking or giving a bribe
Habitual absence without leave, or absence without leave for more than 10 days
Habitual late attendance
Habitual breach of any law or rule applicable to the establishment
Riotous or disorderly behaviour, or any act subversive of discipline
Habitual negligence or neglect of work
Habitual breach of service rules approved by the Chief Inspector
Falsifying, tampering with, damaging or losing the employer's official records
Starting or taking part in an illegal strike or go-slow, or inciting others to do so
Sexual harassment and gender-based violence are now defined in the Act (s.2(52A), s.2(12B)); complaints go first to the establishment's Complaint Committee (s.332A), whose finding can found disciplinary action.
Mandatory procedure (s.24)
Charge sheet. Record the allegation in writing and give the worker a copy, allowing at least 7 days to reply in writing.
Suspension (optional). The worker may be suspended pending inquiry for up to 60 days, with a subsistence allowance of half the average wages plus full dearness and ad hoc allowance.
Inquiry committee. Constitute a committee with an equal number of employer and worker representatives, not exceeding five members in total. Complete the inquiry within 60 days.
Hearing. Give the worker a personal hearing, the chance to cross-examine witnesses and to call their own, and access to the documents relied on. Keep minutes signed by those present.
Report. The committee records written findings on each charge with reasons.
Decision. The employer or manager decides the penalty, with approval recorded in writing, and gives the worker a copy of the order.
Choosing the penalty (s.23(2))
Where there are mitigating circumstances, the employer may impose a lesser penalty instead of dismissal: removal from service, reduction to a lower post or grade for up to one year, stoppage of promotion or increment for up to one year, a fine, suspension without wages for up to 7 days, or censure and warning. A worker removed with at least 1 year of service is entitled to compensation of 15 days' wages per completed year; a worker dismissed receives only accrued dues (wages, earned-leave encashment and provident fund in accordance with s.29 and the fund rules).
Absence without leave has a separate route. Where a worker is absent for more than 10 days without leave, s.27(3A) requires a written notice asking for an explanation and a return to work within 10 days, then a further 7 days and an opportunity to be heard. If the worker still fails to respond or return, they are treated as having resigned (lost lien), with the benefits that apply to resignation.
What the courts have held.
Condoned misconduct cannot be revived. In Bank of Credit and Commerce (Overseas) Ltd. v. Tajul Islam Chowdhury (45 DLR (AD) 61) a union general secretary was dismissed on four charges, each of which the bank had already dealt with by warning letter. The Appellate Division held these were "past and closed transactions"; once condoned they could not found a dismissal, and the charge sheet amounted to "a mere parade of past misdeeds". Past incidents may be cited only to show a habitual pattern behind a fresh, live charge.
Hold the inquiry when charges are denied. In the same case the bank dismissed without a formal inquiry, treating the worker's reply as an admission although he had denied at least one charge. Hold a full inquiry unless every charge is unequivocally admitted in writing.
The Labour Court can modify the penalty. The Labour Court there converted dismissal into termination with benefits, and the Appellate Division let that stand; a disproportionate penalty can be reduced even where misconduct is shown.
Pretextual inquiries fail. In James Finlay & Co. Ltd. v. Chairman, Second Labour Court (33 DLR (AD) 58) the Labour Court found the domestic inquiry findings perverse and the charges brought to victimise the union general secretary while his industrial dispute was pending. Inquiry findings must rest on evidence recorded at the inquiry.
Absence, loss of lien and conviction. Loss of lien for overstaying leave is not automatic. In P.W.V. Rowe v. Chairman, Labour Court (31 DLR (AD) 119) the employer refused a worker's medical certificates and telegrams and treated her as having lost her lien; the Labour Court ordered reinstatement with full back wages, and the Appellate Division declined to interfere. Under s.27(3A), give the notices, consider the explanation on its merits, and record why it is rejected. The ten-day threshold is applied strictly: in M.A. Mannan v. Chairman, Second Labour Court (2 ADC 131) appearing on the 11th day to cause disruption, not to work, did not interrupt the absence. Conviction for a criminal offence is a separate ground under s.23(1)(a). By analogy with Md. Abdul Hamid v. Moulana Obaidul Hakim (23 BLC (AD) 102), plan to reinstate if the conviction is reversed on appeal.
Resignation, retirement and death
Even where the employer does not initiate the exit, it carries payment obligations, and the 2025 reforms made resignation benefits payable much earlier in a worker's service.
Resignation (s.27). A permanent worker must give 60 days' written notice; a temporary monthly-rated worker 30 days, others 14 days. A worker who leaves without notice may have wages for the shortfall deducted from final dues. The employer must accept and process the resignation and pay compensation graded by service under s.27(4) as amended:
| Completed continuous service | Compensation per completed year |
|---|---|
| Up to 3 years | 7 days' wages |
| More than 3 years, less than 10 years | 15 days' wages |
| 10 years or more | 30 days' wages, or gratuity if higher |
Previously nothing was payable below 5 years' service and only 14 days' wages per year between 5 and 10 years. Confirm the exact wording of the tiers against the gazetted 2026 Act before paying, as commentary on the lower threshold varies.
Once a resignation is accepted, the employment relationship ends. In Md. Saiful Islam v. Sheikh Hasanul Huq (1 ADC 290) the Appellate Division held that an engineer who resigned and was re-employed eight years later could not claim seniority from his first appointment, unlike colleagues who had kept a lien on their posts while on deputation. Record whether a returning employee is re-employed (a fresh start) or reinstated (continuity), and hear those whose seniority would be affected before changing it.
Retirement before 60 is unlawful. In Biman Bangladesh Airlines Ltd. v. Md. Abdul Khaleque (13 ADC 481) the Appellate Division held that retiring a worker at 57 infringed s.28. It also held that the worker's remedy lies in the Labour Court under s.33, whose words "otherwise removed from employment" cover every cessation of work brought about by the employer. Temporary or project employees with long service also retain end-of-service rights: in Mir Sattaruddin v. Palli Daridra Bimochon Foundation (14 MLR (AD) 278), termination on 3 months' pay was valid, but gratuity was still payable for more than 3 years' service.
Retirement (s.28). A worker retires on completing 60 years of age. The employer must pay the retirement benefits under the service rules, gratuity scheme or provident fund, and any compensation the Act or contract provides. Re-engagement after 60 is a fresh contract.
Death in service (s.19). If a worker with at least 1 year of continuous service (reduced from 2 years) dies while in service, the employer pays the nominee or heirs 30 days' wages per completed year, or 45 days' wages per year if death occurs on duty or from an accident at work, in addition to retirement benefits and any employment-injury compensation.
Protected situations
Some terminations are unlawful whatever route is used, and the 2025–2026 reforms attached direct administrative and criminal consequences to several of them.
Pregnancy and maternity. Maternity leave is now 120 days (60 before and 60 after delivery). A notice of termination, discharge, removal or dismissal served on a woman worker during the protected period around delivery, without sufficient cause, does not deprive her of maternity benefit (s.50). In practice, avoid any exit decision in this window unless there is documented, unrelated gross misconduct.
Trade union activity. Dismissing, discharging or otherwise penalising a worker for union membership, organising or office is an unfair labour practice (s.195). Since 2025 it is also anti-union discrimination to retaliate against a worker who filed an unfair-labour-practice complaint (s.196A(1a)). The Director General of Labour can order reinstatement, cessation and compensation directly (s.196B); fines are BDT 50,000–100,000 (s.291).
Blacklisting. Circulating names of exited workers to deter their re-employment is now expressly prohibited and penalised.
Discrimination. Termination based on gender, disability or other protected grounds is prohibited.
Refusing dangerous work. A worker who refuses work posing an imminent danger may not be penalised for it (s.61A).
Harassment complainants. Retaliation against a person who complains to the Complaint Committee exposes the employer to penalty (s.307B).
Pending disputes. While conciliation, arbitration or Labour Court proceedings on an industrial dispute are pending, do not change the service conditions of, or dismiss, workers concerned in that dispute without the permission required by the Act. Take advice before acting.
Harassment complaints and termination. In British American Tobacco Bangladesh Co. Ltd. v. Begum Shamsun Nahar (66 DLR (AD) 80) a long-serving employee complained in writing of sexual harassment by two managers and was terminated the day after she witnessed a superior's misconduct. The Appellate Division let her damages suit against the company go to trial: an employer can be liable in tort for failing to prevent harassment it has been told about, and vicarious liability is a question of fact. Investigate complaints through the Complaint Committee, and do not terminate a complainant while the complaint is open.
Service benefits on termination
What an exiting worker receives depends on how employment ended. Every exit carries a common core of dues; most exits add a statutory compensation calculated in days' wages per year of service; and where a gratuity scheme exists the worker usually gets whichever of compensation or gratuity is higher.
How the amounts are measured
Wages for compensation. Compensation is computed on the worker's average basic wage plus dearness allowance and ad hoc or interim wages, if any, over the last 12 months (s.14(2)). House rent, conveyance and other excluded items under s.2(45) are not counted. A day's wage is conventionally the monthly figure divided by 30.
A year of service. A worker who actually worked at least 240 days in the preceding 12 months is treated as having completed one year of continuous service; 120 days counts as six months (s.14(1)). Days on lay-off, paid sick leave, legal strike and maternity leave count as days worked.
Gratuity. Where the establishment has a gratuity scheme, gratuity under s.2(10) is at least 30 days' wages at the last rate for each completed year of service or part exceeding six months, rising to 45 days per year for service beyond 10 years. The BLA does not oblige every employer to create a gratuity scheme, but once one exists it is a binding term.
Benefits by mode of exit (permanent workers)
| How employment ended | Section | Minimum service | Notice or pay in lieu | Statutory compensation |
|---|---|---|---|---|
| Termination simpliciter by employer | s.26 | None | 120 days (monthly-rated) / 60 days (others) | 30 days' wages per completed year, or gratuity if higher |
| Retrenchment (redundancy) | s.20 | 1 year | 1 month | 30 days' wages per completed year, or gratuity if higher |
| Discharge (medical incapacity) | s.22 | 1 year | Not applicable | 30 days' wages per completed year, or gratuity if higher |
| Removal (lesser misconduct penalty) | s.23(2) | 1 year | None | 15 days' wages per completed year |
| Dismissal for proved misconduct | s.23(1) | Not applicable | None | None; common dues only |
| Resignation | s.27(4) | None (since 2025) | Worker gives 60 days | 7 days' wages per year (up to 3 years); 15 days (over 3, under 10 years); 30 days or gratuity if higher (10+ years) |
| Retirement at 60 | s.28 | Not applicable | Not applicable | Benefits under the gratuity scheme, PF rules and service rules |
| Death in service | s.19 | 1 year (reduced from 2) | Not applicable | 30 days' wages per year; 45 days if death on duty or from a workplace accident; paid to nominee, on top of retirement benefits |
Temporary workers terminated under s.26 receive notice (30 or 14 days) but no s.26(4) compensation. As Mir Sattaruddin v. Palli Daridra Bimochon Foundation (14 MLR (AD) 278) shows, a long-serving temporary or project worker may still be entitled to gratuity under the applicable rules.
Dues payable on every exit, including dismissal
Unpaid wages and overtime up to the last working day.
Encashment of unavailed earned leave at the leave-wage rate (s.11), whatever the reason for leaving.
Provident fund. The worker's own contributions with interest. Under s.29, a worker who is retrenched, discharged, removed, dismissed or terminated may not be deprived of the employer's contribution and its interest if entitled to it under the fund rules. Dismissal does not forfeit vested PF. Since the 2026 Act, a fund is mandatory for establishments with 100 or more permanent workers only on a written demand by two-thirds of them, and Progoti pension enrolment is an alternative.
Workers' Profit Participation Fund, where the company is covered (paid-up capital of Tk 1 crore or fixed assets of Tk 2 crore): the worker's accrued share for the accounting years in which they qualified.
Festival bonus, if the entitlement under the Labour Rules, 2015 and the contract accrued before the exit date.
Notice pay, where the employer did not let the notice period run.
Certificate of service (s.31), and the right to stay in employer housing for up to 60 days; no worker may be evicted until all dues are paid (s.32).
All of this must be paid within 30 working days (s.30).
Worked example (termination under s.26)
A permanent, monthly-rated worker earns basic plus dearness allowance averaging Tk 30,000 a month over the last 12 months. They have 7 years 8 months of continuous service and 20 days of unavailed earned leave, and the establishment's gratuity scheme pays one month's basic per year.
| Item | Calculation | Amount (Tk) |
|---|---|---|
| Notice pay in lieu (120 days) | 30,000 ÷ 30 × 120 | 120,000 |
| s.26(4) compensation | 30 days × 7 completed years = 210 days × 1,000 | 210,000 |
| Gratuity under the scheme | 8 years (part over 6 months counts) × 30,000 | 240,000 |
| Payable: higher of compensation or gratuity | Gratuity exceeds compensation | 240,000 |
| Earned-leave encashment | 20 days × 1,000 | 20,000 |
| Total before PF, WPPF and arrears | 380,000 |
The employer pays the gratuity, not both, because s.26(4) makes them alternatives. PF balances, WPPF shares and any wage arrears are added on top. Check the scheme's own wage base: some gratuity schemes use basic wage only, others gross.
Final settlement and exit obligations
Every exit, by any route, must be fully settled within 30 working days of the date employment ends (s.30).
| Item | Source | What to pay or issue |
|---|---|---|
| Unpaid wages | s.30 | Wages up to the last working day, including overtime |
| Notice pay | ss.20, 26 | Wages for any unserved notice period, where notice was not given |
| Statutory compensation | ss.19–28 | As set out for the route used |
| Earned leave | s.11 | Wages for unavailed earned leave (now accruing at 1 day per 14 days worked for most establishments) |
| Provident fund | s.29 and fund rules | Worker's and employer's contributions with interest, per the fund rules |
| Gratuity | Service rules / scheme | Where the establishment has a gratuity scheme, compare it with statutory compensation and pay the higher where the Act says so |
| Festival bonus | Contract / rules | Any accrued entitlement |
| Certificate of service | s.31 | Issue on request to any permanent worker who leaves, whatever the reason |
Good practice: pay by bank transfer or against a signed receipt, give the worker an itemised settlement statement, and keep both on file. A settlement signed under pressure or without itemisation is unlikely to bar a later claim. Late payment exposes the employer to a Labour Court claim and penalty.
Acceptance of dues is not a reliable waiver. In the British American Tobacco case the employer argued that the employee's acceptance of all termination dues without protest barred further claims; the Appellate Division still allowed the suit to proceed. If a full and final release is intended, set it out in a separate, clearly worded settlement agreement.
Disputes and consequences of unlawful termination
A worker who challenges a termination must first raise a written grievance with the employer, and the employer's handling of that grievance is often decisive in the Labour Court.
Grievance (s.33). The worker sends a written grievance, usually by registered post, within 30 days of the cause of action.
Employer response. The employer must inquire, give the worker a hearing and communicate a written decision within 30 days. Treat this as a genuine review: a defective termination corrected here avoids litigation.
Labour Court. If the worker is dissatisfied, or no decision is given, they may complain to the Labour Court within 30 days. The Court may order reinstatement with or without back wages, convert a dismissal into a lesser penalty, or award compensation and dues.
What the courts have held. The grievance step is a condition precedent. In James Finlay (33 DLR (AD) 58) the Appellate Division held that a complaint could be treated under the individual-grievance provision (now s.33) only if the worker had first served the written grievance and kept to the time limits. In Robi Axiata Ltd. v. First Labour Court (21 BLC (AD) 218) the Court held that the Labour Court, having the trappings of a civil court, may decide maintainability at the outset and reject a complaint barred by law, under Order VII rule 11 or its inherent power, without a full trial. An employer facing a complaint without a proper prior grievance should raise maintainability at the first opportunity.
Further points from the Appellate Division:
Time runs from the event, not knowledge. In M.A. Mannan v. Chairman, Second Labour Court (2 ADC 131) the grievance period ran from the occurrence of the cause, and a grievance sent from jail showed the worker knew of the order, so his later complaint was time-barred. Keep proof of the date each termination order was served.
Labour Court only, for workers. A civil court has no jurisdiction over a worker's termination; a civil decree was set aside as void in Rupali Bank Ltd. v. Tafazal Hossain (44 DLR (AD) 260). A writ is likewise not maintainable where s.33 applies (Biman Bangladesh Airlines Ltd. v. Md. Abdul Khaleque, 13 ADC 481).
Non-workers and state bodies. Managerial staff of private companies are governed by their contract (Musharraf Hossain Chowdhury v. General Manager, Titas Gas, 33 DLR (AD) 186, the Eastern Refinery appeal), while employees of statutory corporations, or of companies wholly controlled by one, may challenge termination in writ.
Parallel routes. Where anti-union discrimination or an unfair labour practice is alleged, the Director General of Labour may act directly under s.196B, and disobeying such an order is itself an offence (s.291(4)). A new Alternative Dispute Resolution Authority (s.348C) offering conciliation and arbitration has been created by law but is not yet operational.
Penalties. The general penalty for breaches without a specific penalty (s.307) is now a fine of BDT 25,000–50,000 and up to 3 months' imprisonment. Unfair labour practices and anti-union discrimination carry BDT 50,000–100,000 (s.291).
Employer checklist
Work through these before signing any termination order.
☐ Confirm the person is a "worker" under the amended s.2(65), judged by actual duties, not title
☐ Confirm the worker's class (permanent, probationer, temporary) and continuous service in completed years
☐ Choose one route and state its section in the letter; never mix misconduct allegations into a s.26 notice
☐ Check protected situations: pregnancy or maternity, union office or activity, recent labour or harassment complaint, pending industrial dispute
☐ For dismissal: charge sheet, 7-day reply, balanced inquiry committee, hearing, written findings, decision within 60 days
☐ For retrenchment: written reasons, copies to Chief Inspector and CBA, last-come-first-go applied or departure justified
☐ For discharge: registered medical practitioner's certificate on file
☐ Give the correct notice or pay in lieu
☐ Calculate compensation and compare with gratuity; pay the higher where the Act requires
☐ Pay earned leave, provident fund and all dues within 30 working days, with an itemised statement
☐ Issue the certificate of service on request
☐ Answer any s.33 grievance in writing within 30 days after a hearing
☐ Keep the full file (appointment, warnings, inquiry record, notice, settlement receipt) for at least the limitation period
Lessons from the case law
☐ Never use s.26 once a disciplinary inquiry has started, or to deal with alleged misconduct; finish the inquiry instead
☐ Do not charge misconduct already closed by a warning, except as background to a fresh, live charge
☐ Check timing: avoid any termination that closely follows a union demand, a complaint, a court order or a harassment report
☐ Consider the worker's explanation for overstaying leave on its merits and record the reasons
☐ Keep job descriptions current so worker status can be shown from actual duties
☐ Record the date and mode of service of every termination order
☐ Use a separate written settlement agreement if a full release of claims is intended
Key judicial decisions
Across 21 Appellate Division decisions, one rule recurs: the court looks at the substance of a termination, not its label, and a "termination simpliciter" used to punish, to get rid of a union leader or for an ulterior motive is struck down as dismissal "in the garb of termination". Many were decided under the Employment of Labour (Standing Orders) Act, 1965 and the Industrial Relations Ordinance, 1969; their reasoning carries over to the successor provisions of the BLA (s.5(3) → s.27(3A), s.17 → s.23, s.18 → s.24, s.19 → s.26, s.25 → s.33, IRO s.34 → s.213). Cases involving statutory corporations or government-controlled bodies turn partly on service regulations and constitutional review; they are persuasive, not binding, for private employers under the BLA.
Termination simpliciter and disguised dismissal
| Case | Year | What it means for employers |
|---|---|---|
| Abdul Baque v. Government of Bangladesh, 68 DLR (AD) 235 | 2015 | Statutory-body regulations allowing termination "without showing any cause" on 3 months' notice, with no guidelines, violate Article 27; and terminating simpliciter after starting a disciplinary inquiry (suspension, charge sheet, denial) is dismissal in disguise. Reinstatement ordered; the employer may restart the inquiry. |
| Bangladesh Parjatan Corporation v. Ali Hossain, 34 BLD (AD) 135 | 2012 | The employees' union president was terminated simpliciter after leading protests against transfers. Held: dismissal in the garb of termination, a colourable exercise of power; reinstated with full back wages. Misconduct must go through the disciplinary procedure, never through the termination power. |
| Secretary, Bangladesh Jute Mills Corporation v. S.A.H. Monowar Ali, 5 LG (AD) 249 | 2005 | Officers who refused a golden handshake were terminated even though vacancies existed in other mills. Not fair or reasonable; reinstatement upheld. The employer "is to demonstrate fairness in its action and justification". |
| Mongla Port Authority v. S.M. Fazlul Huq, 25 BLD (AD) 291 | 2005 | No show-cause notice is needed for a simple termination, but an order issued a day after the employee obtained an attachment order against the chairman was mala fide removal "under the garb of termination". |
| Chittagong Development Authority v. Engineer Abul Kalam, 19 BLD (AD) 9 | 1998 | The decision was taken off-agenda at a board meeting held while the employee had been sent to Dhaka, to make way for a favoured officer. This was removal in the garb of termination and was set aside as mala fide. |
| Bangladesh Bank v. Mohammad Abdul Mannan, 46 DLR (AD) 1 | 1993 | A termination on notice whose order carries no stigma and refers to no allegation is valid even if board papers mention allegations; the employee cannot rely on internal records. The Court nonetheless warned the power is "very harsh" and urged gratuity by length of service. |
| Bangladesh Biman Corporation v. Chowdhury Mohammad Yusuf, 31 DLR (AD) 305 | 1979 | Employees of a statutory corporation are not governed by "master and servant" law; termination of 15-year officers as "no longer required", without hearing and without applicable rules, was void. |
| Bangladesh Tea Estate Ltd. v. Bangladesh Tea Estate Staff Association, 28 DLR (AD) 190 | 1976 | Courts ordinarily do not go behind a termination simpliciter, but will where it is really victimisation of a union officer; a unit representative counts. Reinstatement with back wages. |
| Mir Sattaruddin v. Palli Daridra Bimochon Foundation, 14 MLR (AD) 278 | 2008 | Project-based temporary employees may lawfully be terminated on 3 months' pay in lieu, but those with more than 3 years' service remain entitled to gratuity. |
Misconduct, inquiry and conviction
| Case | Year | What it means for employers |
|---|---|---|
| Bank of Credit and Commerce (Overseas) Ltd. v. Tajul Islam Chowdhury, 45 DLR (AD) 61 | 1993 | Misconduct already condoned by warning is a "past and closed transaction" and cannot found dismissal. A charge sheet that only lists such incidents contains no charge. Denied charges need a formal inquiry. The Labour Court may convert dismissal into termination with benefits. |
| James Finlay & Co. Ltd. v. Chairman, Second Labour Court, 33 DLR (AD) 58 | 1980 | The Labour Court found the domestic inquiry perverse and the charges a pretext to victimise the union secretary. The individual-grievance route (now s.33) requires a prior written grievance within time. |
| Md. Abdul Hamid v. Moulana Obaidul Hakim, 23 BLC (AD) 102 | 2017 | Dismissal takes effect on conviction for a scheduled offence, even while an appeal is pending. If the conviction is set aside, the employee must be reinstated unless he has reached retirement age or the post is abolished. |
Absence and loss of lien
| Case | Year | What it means for employers |
|---|---|---|
| P.W.V. Rowe v. Chairman, Labour Court, Chittagong, 31 DLR (AD) 119 | 1977 | Overstaying leave does not end employment automatically: the worker is only "liable" to lose lien, and the employer must fairly consider the explanation. Rejecting contemporaneous medical certificates and telegrams led to reinstatement with full back wages. |
| M.A. Mannan v. Chairman, Second Labour Court, 2 ADC 131 | 2003 | Absence without leave "for more than ten days" is applied strictly: arriving on the 11th day to cause trouble, not to work, did not break the absence. |
Resignation, retirement and re-employment
| Case | Year | What it means for employers |
|---|---|---|
| Md. Saiful Islam v. Sheikh Hasanul Huq, 1 ADC 290 | 2004 | An accepted resignation severs the relationship; re-employment is a fresh appointment with no carried-over seniority, unlike an employee who kept a lien while on deputation. Hear affected colleagues before altering seniority. |
| Biman Bangladesh Airlines Ltd. v. Md. Abdul Khaleque, 13 ADC 481 | 2016 | Retiring a worker before 60 infringes s.28. "Otherwise removed from employment" in s.33 covers every cessation of work by the employer, including premature retirement, and the remedy lies in the Labour Court, not in writ. |
Who is a worker, and which forum
| Case | Year | What it means for employers |
|---|---|---|
| Managing Director, Rupali Bank Ltd. v. Tafazal Hossain, 44 DLR (AD) 260 | 1992 | A bank's assistant cashier is a worker. The Labour Court is the only forum, and a civil court decree on his termination was void for want of jurisdiction. |
| Uttara Bank Ltd. v. Syed Abedur Reza, 7 ADC 161 | 2009 | Following Rupali Bank v. Nazrul Islam Patwary (48 DLR (AD) 62), a civil decree setting aside a bank clerk's termination simpliciter was left standing. The worker argued the old s.25 gave no Labour Court remedy for a non-union termination with full benefits. The wider s.33 now covers such cases (see Biman 2016). |
| Bangladesh Parjatan Corporation v. Ali Hossain, 34 BLD (AD) 135 | 2012 | An Electrical Foreman with supervisory functions was not a "worker" under the 1965 definition. Since the 2025 reforms the test is the work actually done, with the default being inclusion. |
| Musharraf Hossain Chowdhury v. General Manager, Titas Gas, 33 DLR (AD) 186 | 1980 | An officer in a nationalised company wholly controlled by its parent corporation was in the corporation's service, so writ lay and his termination was void. An employee of a company that kept its autonomy was governed by his appointment letter, and writ did not lie. |
| Robi Axiata Ltd. v. First Labour Court, 21 BLC (AD) 218 | 2015 | The Labour Court has the trappings of a civil court and can reject a non-maintainable complaint at the threshold, under Order VII rule 11 or its inherent power. |
Harassment and employer liability
| Case | Year | What it means for employers |
|---|---|---|
| British American Tobacco Bangladesh Co. Ltd. v. Begum Shamsun Nahar, 66 DLR (AD) 80 | 2010 | An employer can be sued in tort for failing to prevent sexual harassment by its staff after written complaints. Here the complainant was terminated the day after witnessing a superior's misconduct. The claim was not barred at the outset, even though she had accepted her termination dues. |
