separation of employees on ground of redundancy

separation of employees on the ground of redundancy, known as Retrenchment

Published by The September 19, 2017. (Link Here) 

separation of employees on ground of redundancy

This week Your Advocate is Barrister Omar Khan Joy, Advocate, Supreme Court of Bangladesh. He is the head of the chambers of a renowned law firm, namely, ‘Legal Counsel’, which has expertise mainly in commercial law, corporate law, family law, employment and labor law, land law, banking law, constitutional law, criminal law, IPR and in conducting litigations before courts of different hierarchies.

Query
I have been working for a private company for more than 5 years. Last week, my employer gave me a letter which stated that I was to be retrenched from employment as the company do not have any more work for me. On the other hand, I see my colleagues are working as usual. I find this reason to be vague and when I spoke to my colleagues and lawyer friends regarding the matter I found their responses to be more confusing. I would like to know my rights according to law and also if the company can take such arbitrary step.

Tareq Shamsur,Dhaka

Response
It is my understanding from your query that your company has served a notice of retrenchment to you, and you are desirous to know whether this is legal and what remedies do you have, if any.

It is imperative to mention at the very outset that matters related to employment in the country are governed by the Bangladesh Labour Act (BLA) of 2006 and its subsequent amendments along with the Bangladesh Labour Rules (BLR) of 2015. The local labour laws are applicable for employees who fall under the definition of worker under the BLA and for the rest their individual employment contract governs their individual employment contracts. As it is unclear from your particular query, I assume that the local labour laws are applicable in your situation.

Retrenchment is one of the legally prescribed methods by which an employer can terminate the employment of a particular employee. Under section 20 of the BLA, a worker may be retrenched from service of any establishment on the ground of ‘redundancy’. Therefore, as per law in any particular situation, if the employer is faced with a reduced work load or a certain project comes to an end or the particular service is no longer required, etc. in such case the employer may resort for the option of retrenchment.

Section 20(2) of the BLA provides that if a worker has been in continuous service under an employer for not less than one year, the employer, in the case of redundancy shall be given one months’ notice in writing or payment of one month’s basic wages in lieu of such notice. Then a copy of notice has to be submitted to the Chief Inspector of Labour. Additionally, the employer has to pay the worker thirty days’ wages for his every year of service or gratuity, if any, whichever is the higher. Additionally, the said notice shall be provided by the employer under the prescribed procedure of rule 27 of the BLR.

As per section 20(4) of the BLA, for a worker of any particular category to be retrenched the employer shall, in the absence of any agreement between the employer and the worker in this regard, retrench the worker who was the last person to be employed in that category.

It is not clear whether you were the last person to be recruited in your position in the concerned department, if so, then such retrenchment may be in compliance with the law. Alternatively, if you were the only person employed in the particular department which has been dissolved due to lack of work, then such can be justified as valid reason for retrenchment. Therefore, as you have mentioned that your other colleagues are still doing their regular work does not necessarily mean that your retrenchment is unjustified or illegal, provided that the employer has followed the prescribed procedures under the law.

Provided that all the aforementioned legal criteria are satisfied, such retrenchment shall be less likely to be illegal. It would be advisable that you consult with the HR department of your institution for a clear understanding of the particular reason for such retrenchment. On the other hand, if you feel that there has been any discrepancy in the process you can take the matter by way of serving a grievance notice to your employer specifically stating your grievance(s).

I hope that in light of the aforesaid discussion, you shall now have a better understanding of retrenchment and its prescribed procedure.

For detailed query contact: omar@legalcounselbd.com.