Rights of workers upon layoffs

As lay understanding goes, layoff implies temporary refusal by an employer to give employment to an employee who is already employed. Under the 2006 Labour Act of Bangladesh, lay-off means the failure, refusal or inability of an employer on account of shortage of coal, power or raw material or the accumulation of stock or the break-down of machinery to give employment to a worker.

Section 16 of the Act specifically deals with the right of laid-off workers for compensation.  This section says that a laid off worker (other than one who is a badli or casual worker) shall be paid compensation by the employer for all days during which he is laid-off, except for intervening weekly holidays. The proviso states that such laid off workers' names have to be borne on the muster-rolls of the establishment and he has to be someone who has completed not less than one year of continuous service under the employer that undertakes the lay-off.

According to the same section, the amount of compensation shall be equal to half of the total of the basic wages and dearness allowance, and ad-hoc or interim pay, if any, and the full amount of housing allowance, if any. Basically, the quantum of the compensation would be half of what would have been payable to him had he not been laid-off as such. Even a badli worker will enjoy this compensation provided his name is on the muster-rolls of and provided he has completed one year of continuous service in the establishment.

Section 17 says that despite the layoffs, the employer shall maintain a muster-roll, and provide for the making of entries therein by or for the laid-off workers who may present themselves for work at the establishment at the appointed time during normal working hours.

Section 16(4) clarifies that compensation shall not be paid to a laid off worker for an indefinite period. It says that unless there is an agreement between the worker and the employer to the contrary, no worker shall be entitled to the payment of compensation under this section for more than forty-five days during a calendar year.

However, Section 16(5) considers the welfare of the worker. It says that regardless of whatever section 16(4) says, if during a calendar year a worker is laid-off for more than forty-five days, either continuously or intermittently, and the lay off after the expiry of the first forty-five days comprises period or periods of fifteen days or more, then the worker shall, unless there is an agreement to the contrary between the worker and the employer, be paid compensation for all the days comprised in every subsequent period of lay-off for fifteen days or more. This amount of compensation shall be equal to one-fourth of the total of the basic wages and dearness allowance, and ad-hoc or interim pay, if any, and the full amount of housing allowance, if any.

Section 16(7), however says that in any case where, during a calendar year, a worker is to be laid off after the first forty-five days, for any continuous period of fifteen days or more, the employer may, instead of laying off such a worker, retrench him under section 20.

There are certain cases in which laid off workers shall not be entitled to compensation. One of such grounds, according to Section 18, is when a laid off worker refuses to accept on the same wages, an alternative employment not requiring any special skill or previous experience, in the same establishment by which he has been laid-off, or in any other establishment belonging to the same employer and situated in the same town or village or within a radius of eight kilometers from the establishment.

Section 20 provides that a worker being in continuous service under the employer for one year or more, may be retrenched.  However, in order to do that, the worker has to be given one month's notice in writing, indicating the reasons for retrenchment. In lieu of such notice, the worker has to be paid wages for the period of notice. Furthermore, a retrenched worker as such has to be duly paid compensation, equivalent to thirty days' wages or gratuity for every completed year of service if any, whichever is higher.

However, the law is different for a retrenched worker who undergoes retrenchment under Section 16(7). For a worker retrenched under section 16 (7) as a laid off worker, no notice as mentioned in sub-section (2) (a) shall be necessary. The worker shall be paid fifteen days wages in addition to the compensation or gratuity, as the case may be, which may be payable to him under sub-section (2) (c).

Section 21 deals with the issue of re-employment of retrenched workers. It states that where any number of workers are retrenched, and the employer proposes to take into his employ any worker within a period of one year from the date of such retrenchment, he shall give an opportunity to the retrenched workers belonging to the particular category concerned by sending a notice to their last known addresses, to offer themselves for employment. The retrenched workers who so offer themselves for re-employment shall have preference over other retrenched workers, each having priority according to the length of service under the employer.