Businesses are voicing concerns over proposed amendments to Bangladesh’s labour laws, fearing that the changes could create instability in the recovering manufacturing sector.
While there is broad agreement on most of the 101 internationally recognized proposals, nine remain contentious, according to the Bangladesh Employers Federation (BEF) leaders, who spoke at a press event in Dhaka on Saturday. The government, however, is pushing for rapid amendments, including 20-25 new proposals, based on advice from the International Labour Organization (ILO) and the European Union (EU).
Business leaders warn that these changes could harm both domestic and foreign investment, making it harder to create new jobs. While they acknowledge the importance of protecting workers’ rights, they stress that stability in business, an investment-friendly environment, and the competitiveness of the export sector must also be maintained.
Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said Bangladesh’s export competitors, such as Vietnam and India, do not impose similar conditions. He believes these proposed changes undermine stability in Bangladesh’s industrial sector.
“If instability is introduced in the industrial sector, it will be harder to create jobs for the large number of people entering the workforce each year,” Hatem said.
The BEF also highlighted that around 5.5 crore workers are employed in the informal sector, with about 1 crore in the formal sector. Each year, around 24-25 lakh people enter the workforce, but the formal sector absorbs only a small portion of them.
Fazle Shamim Ehsan, BEF president, pointed to the current law, which requires 70 percent of workers in a factory to apply for a provident fund before the company must create one. Despite the law being in place for years, workers have not shown interest, as they do not want to contribute to the fund themselves.
“They don’t want to bear the same financial burden as factory owners,” Ehsan said.
He suggested reducing the required percentage from 70 percent to 50 percent. However, the government insists on activating the provident fund once a factory reaches 100 workers, which Ehsan believes could cause instability.
Ehsan further stated that the BEF agreed on almost all the proposals, except for the nine contentious ones, which could have been resolved through further dialogue. He claimed the government, under the guidance of the ILO and EU, is pushing ahead with the changes without further consultation.
At the 89th Tripartite Consultation Council (TCC) meeting on August 26, business representatives showed a willingness to compromise but expressed concern over the government’s hardline stance on certain proposals.
On the new trade union proposals, Ehsan warned that allowing trade unions to form with just 20 workers could result in small, ineffective unions, especially in small and medium-sized industries.
“This could create frequent management pressures, increase conflicts, and reduce productivity,” he said.
Ehsan also expressed concern that simplifying the trade union registration process could discourage foreign investment, as investors typically seek stable, predictable environments. Without increased investment, both job creation and long-term growth could be at risk.
Currently, 20 percent of a company’s workers must support the formation of a trade union.
BEF Secretary General Mohammad Farook Ahmed cited Malaysia as an example, noting that there, workers rarely go on strike. Any company with as few as 11 employees can form a union. However, collective bargaining requires 50 percent of the workforce plus one vote, making it harder for unions to push for frequent changes.
For industrial stability, Farook emphasized the need for stricter government monitoring, institutional competence, and clear regulatory guidance. He urged the government to focus on these aspects to ensure a stable industrial environment.
BEF represents 25 industry associations and over 170 companies including most of the top conglomerates of Bangladesh.
