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LABOUR MARKET PROFILE 2016 Bangladesh LO/FTF Council, Analytical Unit Copenhagen, Denmark

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Page 1: Labour Market Profile - Ulandssekretariatet · Labour Market Profile 2016 Bangladesh 2016 Page 3 EXECUTIVE SUMMARY he People's Republic of Bangladesh is experiencing structural changes

LABOUR MARKET PROFILE

2016 Bangladesh

LO/FTF Council, Analytical Unit

Copenhagen, Denmark

Page 2: Labour Market Profile - Ulandssekretariatet · Labour Market Profile 2016 Bangladesh 2016 Page 3 EXECUTIVE SUMMARY he People's Republic of Bangladesh is experiencing structural changes

Danish Trade Council for International Development and Cooperation

Labour Market Profile 2016

Bangladesh 2016 Page ii

PREFACEThe LO/FTF Council presents this Labour Market Profile

as a yearly updated report that provides a

comprehensive overview of the labour market's

situation.

The report is divided in eleven thematic sections

including: trade unions, employers’ organizations,

tripartite structures, national labour legislation,

violations of trade union rights, working conditions,

situation of the workforce (with subsections such as

unemployment, sectoral employment, migration,

informal economy, child labour, gender, and youth),

education (with subsection vocational training), social

protection, general economic performance, and trade.

Additionally, Appendix presents data on trade union

federations; new approved labour market related

legislations; and status of ratification of International

labour Organization (ILO) Conventions.

Estimations are based on data from international

databanks (e.g. ILO’s Key Indicators of the Labour

Market (KILM) and NATLEX as well as the World Bank’s

World Development Indicators), national statistical

institutions and ministries. Other information is collected

from the International Trade Union Confederation

(ITUC) and U.S. Department of State’s Annual Country

Reports on Human Rights Practices. Facts are also

gathered from media sources (e.g. The Economist, the

British Broadcasting Corporation (BBC), LabourStart,

The Guardian, national news, etc.) along with trade

unions centers, employers’ organizations, NGOs, among

others.

Several indexes such as the Global Rights Index, the

Doing Business Index, the Governance Indicators, and

the Human Development Index are used as proxy

indicators of the labour market’s environment. The

indexes’ methodologies and the data quality can be

followed by the sources websites.

This report was published in April 2017.

ACKNOWLEDGMENT The LO/FTF Council is the Danish trade union council for

international development co-operation. It was

established, under a slightly different name, in 1987 by

the two largest Danish confederations, the Danish

Federation of Trade Unions (LO) and the Danish

Confederation of Salaried Employees and Civil

Servants (FTF). The organization activities are related

to: i) to support democratic development of the trade

union movements in Africa, Middle East, Asia and Latin

America; and ii) to contribute to democratic

development in the societies in which the unions operate.

This report is prepared by the LO/FTF Council’s

Analytical Unit in Copenhagen with support from our

Sub-Regional Office in the Philippines. The Bangladesh

Institute of Labour Studies (BILS) contributed with

updated data on trade union membership.

Other labour market profiles are available at our

website:

http://www.ulandssekretariatet.dk/content/landeanaly

ser

Should you have questions about the profiles you can

contact Kasper Andersen ([email protected]), Manager of

the Analytical Unit.

Cover Photo: Carsten Snejbjerg

Page 3: Labour Market Profile - Ulandssekretariatet · Labour Market Profile 2016 Bangladesh 2016 Page 3 EXECUTIVE SUMMARY he People's Republic of Bangladesh is experiencing structural changes

Danish Trade Council for International Development and Cooperation

Labour Market Profile 2016

Bangladesh 2016 Page 3

EXECUTIVE SUMMARY

he People's Republic of Bangladesh is experiencing

structural changes on the labour market. As an

example, many workers are leaving the agricultural

sector entering the service and industry sectors. A

majority of Bangladeshi workers are still working in the

informal economy characterized by inadequate

earnings, low productivity and difficult conditions.

Overall, it is cumbersome to doing business in the

country, including formalizing a business.

The country experienced high economic growth the last

two decades. It did not reduce working poor living

below US$3 a day significantly, which remains high at

86%. On the positive side, the near-poor segment of

the population started to increase in the 2010s, so far.

This is, among others, an impact of an upsurge of wage

and salaried workers in the formal sector.

Few national labour related legislation reforms were

approved during the last three years. Generally,

labour related legislations have flaws in terms of

protection workers’ rights, as an example, a draft of

the Bangladesh Export Processing Zone (EPZ) Labour

Law has disparities of the Labour Act. In addition,

enforcing the labour regulations reach the employed in

the formal sector not the workers from the informal

economy. And the government lack resources of

implementing the regulations effectively. Bangladesh

has a rock-bottom ranking on the Global Rights Index,

which is related to many cases of systematic violations

of trade union rights in recent years.

The country’s employment-to-population rate is higher

than the South Asia average, especially among women.

The labour force participation rate has been on a slow

declining rate. Total unemployment is low with a flat

growth, but youth unemployment is on a rise hovering

above the region average rate. It points towards an

impact of the urbanization and higher demand for

decent work in the formal sector.

Employment is dominated by men. Inactivity on the

labour market is frequent among women. Still one out

of two of the total employment works in the agricultural

sector with a relatively low Gross Domestic Product

(GDP) share per worker. While the labour productivity

is increasing, it remains on a lower rate and pace than

the South Asia average. As indicated, the youth labour

force participation rate is decreasing in Bangladesh.

This is not only related to a rise in enrolment in

secondary and tertiary education levels, but also a

worrisome increase in the proportion of young people

not in employment, education or training (NEET),

especially women.

Since the labour market is not offering sufficient decent

jobs many workers are seeking opportunities in other

countries. Today, personal remittances have turned an

important aspect of economic growth as well as

reduction of working poor. However, migrant labour

experiences vulnerable working conditions in terms of

temporary short-term contracts.

Child labour has dropped significantly, particularly in

the agricultural sector. In contrast, it grew in the

industrial sector and slightly in the service sector. The

general drop in child labour is associated to the just

mentioned urbanization and increasing enrolment in

secondary and tertiary education. The education system

in terms of vocational training was struggling with

stereotypical occupations. But, on the positive side,

large programs were recently launched to scale up the

enrolment in vocational training.

Another clear deficiency of the labour market in

Bangladesh is the extremely low coverage of social

protection both in health social protection and in

contribution to a pension scheme. Diverse labour market

programs have a high number of beneficiaries, but

targeting avoids large segment of the poorest

population. A National Social Protection Strategy was

launched in 2015 but its impact remains uncertain.

The number of trade unions and membership entered a

high upsurge in 2013 due to reforms of the Labour Act

in the aftermath of the dramatic collapse of the Rana

Plaza garment factory. The trade union density of the

wage workers increased from 17% in 2012 to 19% in

2015. But many union applications were rejected in the

period from 2013 to 2016.

A majority of central tripartite structures and social

dialogue are confronting challenges, e.g. the

readymade garment industry sector demonstrates many

industrial conflicts between employers’ organizations

and trade unions. By the same token, collective

bargaining agreements have a very low coverage

among wage and salaries workers. On the positive

side, as an impact of the Rana Plaza collapse and with

pressure from international stakeholders, there is a

higher attendance of occupational safety on the factory

level.

T

Page 4: Labour Market Profile - Ulandssekretariatet · Labour Market Profile 2016 Bangladesh 2016 Page 3 EXECUTIVE SUMMARY he People's Republic of Bangladesh is experiencing structural changes

Danish Trade Council for International Development and Cooperation

Labour Market Profile 2016

Bangladesh 2016 Page iv

COUNTRY MAP

Source: Google

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Danish Trade Council for International Development and Cooperation

Labour Market Profile 2016

Bangladesh 2016 Page v

TABLE OF CONTENTS

Preface........................................................................................................................................................................ ii

Acknowledgment ....................................................................................................................................................... ii

Executive Summary .................................................................................................................................................... 3

Table of Contents ........................................................................................................................................................ v

Trade Union ................................................................................................................................................................ 1

Employers’ Organisations .......................................................................................................................................... 2

Central Tripartite Structures ......................................................................................................................................... 3

Collective Bargaining Agreements ........................................................................................................................................................ 4

National Labour Legislation ........................................................................................................................................ 4

Observations on the labour legislation ................................................................................................................................................ 5

Ratified ILO Conventions ......................................................................................................................................................................... 5

Trade Union Rights Violations .................................................................................................................................... 5

ILO Complaints Procedure ...................................................................................................................................................................... 6

Working Conditions .................................................................................................................................................... 6

Workforce ................................................................................................................................................................... 7

Unemployment ........................................................................................................................................................................................... 8

Sectoral Employment ................................................................................................................................................................................ 9

Migration ..................................................................................................................................................................................................11

Informal Economy ....................................................................................................................................................................................12

Child Labour .............................................................................................................................................................................................13

Gender ......................................................................................................................................................................................................14

Youth ..........................................................................................................................................................................................................15

Education .................................................................................................................................................................. 16

Vocational Training.................................................................................................................................................................................16

Social Protection ....................................................................................................................................................... 17

General Economic Performance ................................................................................................................................ 19

Trade ........................................................................................................................................................................ 21

Trade Agreements ..................................................................................................................................................................................22

Export Processing Zones (EPZ) ..............................................................................................................................................................22

Appendix: Additional Data ....................................................................................................................................... 24

Trade Union Federations in Bangladesh, 2016 ...............................................................................................................................24

List of approved labour related legislations in Bangladesh, 2014-2016 .................................................................................25

Ratified ILO Conventions .......................................................................................................................................................................26

References ................................................................................................................................................................ 27

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Labour Market Profile 2016

Bangladesh 2016 Page vi

Tables Table 1: Status of Trade Unions in Bangladesh ...................................................................................................................................................................... 1 Table 2 : Labour Disputes & Dispute Settlement, 2010-2015, Number of dispute cases................................................................................................ 3

Table 3: Status of Collective Bargaining Agreements in Bangladesh ................................................................................................................................. 4

Table 4: Number of approved national labour, social security and human rights related legislations in Bangladesh, 2014-2016 ........................ 4

Table 5: Global Rights Index, Bangladesh ranking, 2014-2016 ........................................................................................................................................ 5 Table 6: ILO Complaints Procedure ......................................................................................................................................................................................... 6

Table 7: Wages and Earnings .................................................................................................................................................................................................. 6

Table 8: Working Conditions in Bangladesh ........................................................................................................................................................................... 7 Table 9: Employment-to-population ratio, Age and Gender distribution, 2016 ............................................................................................................... 7

Table 10: Inactivity rate in Bangladesh, 2016 ....................................................................................................................................................................... 8

Table 11: Unemployment and Youth Unemployment Rate, 2016, % ................................................................................................................................. 8 Table 12: Employment sector share in Bangladesh, 2010 .................................................................................................................................................... 9

Table 13: GDP share by sector in % (2015) and GDP per worker (2010) in Bangladesh .......................................................................................... 10

Table 14: Skills Mismatches between Job Requirements & Qualifications in Bangladesh, 2013 ................................................................................. 10 Table 15: Migration Facts ........................................................................................................................................................................................................ 11

Table 16: Working Children Proportion of all Children...................................................................................................................................................... 13

Table 17: Statius of Vocational Training ............................................................................................................................................................................... 17

Table 18: Social protection facts in Bangladesh and Asia & the Pacific (AP), 2011, % ............................................................................................... 17 Table 19: Pension Benefits, Coverage and Contributions in Bangladesh and and Asia & the Pacific (AP), 2011, %............................................... 18

Table 20: Key Facts on General Economic Performance in Bangladesh, 2015 .............................................................................................................. 19

Table 21: Poverty and middle-class trends in Bangladesh, 2000-2010 ......................................................................................................................... 20 Table 22: Bangladesh’s Ease of Doing Business ................................................................................................................................................................... 20

Table 23: Bangladesh's Governance Indicators, 2010-2015 ............................................................................................................................................ 21

Table 24: Trade & Foreign Direct Investment (FDI) in Bangladesh, 2015 ........................................................................................................................ 21 Table 25: Trade Union Federations in Bangladesh, 2016 .................................................................................................................................................. 24

Table 26: List of approved labour related legislations in Bangladesh, 2014-2016 ..................................................................................................... 25

Table 27: Ratified ILO Conventions........................................................................................................................................................................................ 26

Figures Figure 1: Bangladesh Garment Sector Union Organizing Applied for the Joint Directorate of Labour, 2010-2016 ................................................ 1

Figure 2: Wage Trends in Bangladesh .................................................................................................................................................................................... 7 Figure 3: Labour force participation rate in Bangladesh and South Asia (SA).................................................................................................................. 8

Figure 4: Unemployment Trends, 2007-2016, % .................................................................................................................................................................. 8

Figure 5: Unemployment by level of educational attainment, 2005, % ............................................................................................................................. 9 Figure 6: Employment by aggregate sector, 1991-2010 .................................................................................................................................................... 9

Figure 7: Labour productivity, 2007-2016 ........................................................................................................................................................................... 10

Figure 8: Sector Structure of output in Bangladesh, 2006-2015, % of GDP .................................................................................................................. 11 Figure 9: Status in employment in Bangladesh, 1996-2011 .............................................................................................................................................. 11

Figure 10: Formal and informal employment in Bangladesh, 2013 .................................................................................................................................. 11

Figure 11: Ratio of net migration to total population in Bangladesh and South Asia, 1998-2012 ............................................................................. 12

Figure 12: Proportion of informal employment to total employment, 2002-2013, % ................................................................................................... 13 Figure 13: Working children aged 5-17 by broad industry, 2002/03-2013 ............................................................................................................... 14

Figure 14: Females in Management & Ownership, 2013 ................................................................................................................................................... 14

Figure 15: Labour force participation rate by sex, 1995-2016, Total and Youth, % ................................................................................................... 15 Figure 16: Unemployment by sex, 1995-2016, Total and Youth, % ................................................................................................................................ 15

Figure 17: Proportion of young people not in employment, education or training (NEET), 2005-2013, % ............................................................... 15

Figure 18: School Level and Enrolment in Bangladesh & South Asia, 2005-2014, Males and females, % ................................................................ 16 Figure 19: Ratio of Vocational Pupils in Secondary Education, 2004-2014, % ............................................................................................................. 17

Figure 20: Health-care Expenditure Not Financed by Private Household's Out-of-pocket Payments, 1995-2011 .................................................. 18

Figure 21: GDP growth per capita, 2006-2015, Bangladesh and South Asia, Annual % ............................................................................................ 19

Figure 22: GDP per capita, Purchasing Power Parity, US$ and Gini Index, 2005-2015 ............................................................................................. 19 Figure 23: Inflation in consumer prices trend ........................................................................................................................................................................ 20

Figure 24: Gross Fixed Capital Formation trend ................................................................................................................................................................. 20

Figure 25: Trade and Foreign Direct Investment trends, 2006-2015, % of GDP ........................................................................................................... 21 Figure 26: Bangladesh's Products Share of Exports, 2014 ................................................................................................................................................ 22

Figure 27: Bangladesh's Main Export Markets, 2015 ......................................................................................................................................................... 22

Figure 28: Employment in EPZ in Bangladesh, 2008-2013, numbers ............................................................................................................................... 23 Figure 29: Employment in EPZs in Bangladesh, 2013 Number of employees in EPZs and % of total ......................................................................... 23

Figure 30: Bangladesh Basic Wage in EPZs, 2010-2013 .................................................................................................................................................. 23

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Bangladesh 2016 Page 1

TRADE UNION

The trade unions are divided into three categories: i)

enterprise level; ii) industrial level; and iii) national

level. According to Bangladesh Labour Act from 2006,

at least 30% of the total workers in an enterprise can

form a union. A maximum three unions can exist in an

enterprise. In practice, there are enterprises with more

than three unions. Members of the unions must be

workers of that enterprise level.

A total of 7,659 basic unions are registered, among

others at least 507 unions in the garment sector, 16

unions in the shrimp sector and 13 unions in the leather

and tannery sector. Around 70% of the basic unions are

affiliated with national federations. Out of 111

industrial federations and 15 Garment Federations,

some are affiliated with national federations. At least

2.9 million members are in basic unions; there are more

than half a million members in industrial federations

and about 1.2 million members in national federations.1

Stated differently, they are mainly concentrated in the

formal sector, though some have started organizing

workers from the informal economy like construction,

rice processing, ship-breaking, among others. Available

data suggests that the trade union density of the

waged workers increased from 17% in 2012 to 19% in

2015 while it was estimated from 3.3% to 4.0%,

respectively, of the total labour force (Table 1).

Table 1: Status of Trade Unions in Bangladesh

Number of trade national union centres 32

Number of sectoral trade union federation 169

Number of basic unions 7,659

Members of trade unions 2.9 million

Trade union members share of labour force 4 %

Trade union members share of waged workers

19 % *

Women member share of trade unions 15 %

Affiliated trade unions from the informal economy

N/A

* This estimation does overestimate the real number of trade union

member share of waged workers since it includes affiliated members

from the informal economy.

Source: LO/FTF research and estimations from Status in employment -

ILO modeled estimates, Nov. 2016.

The Industrial Relations Ordinance which regulates

trade union activities permits workers to organize

themselves into trade unions. However, trade unions

rights are not adequately protected or enforced in

practice (see more on the section: National Labour

Legislation).

The labour intensive readymade garment industry

(RMG) has experience many industrial conflicts. And in

the period from 2010 to 2012 very few new trade

unions in this sector were registered by the Joint

Directorate of Labour (JDL). In recent years, there has

been a high increase in new approved unions in the

sector. This was related to amendments on the Labour

Act in July 2013 that changed the situation rapidly. This

was aftermath of the collapse of an eight-story

garment factory in Rana Plaza Dhaka in April 2013

that killed 1,134 people and injured hundreds of

others. In the period from 2013 to 2016, which peaked

in 2014, total 791 unions applied for registration to

JDL and 382 were approved, which equals 49%

(Figure 1).

Figure 1: Bangladesh Garment Sector Union Organizing Applied for the Joint Directorate of Labour, 2010-2016

Source: Solidarity Center

It is worth mentioning that a significant number of trade

unions in RMG sector become inactive due to factory

closures or alleged unfair labour practices on the part

of employers.

Sramik Karmachari Oikya Parishad (SKOP)

The SKOP is an alliance of the National Federation of

Trade Unions established in 1983 when the military

government of Bangladesh banned all trade union

activities in the country. SKOP was formed as a

platform of joint action on national issues concerning

labour market and trade unions as well as coordinate

demands for restoring workers’ rights during a time

when the country was under martial law. SKOP

represents as many as sixteen national centres of trade

unions and constitutes more than 90% of the workforce

organised by the national trade union movement.

1 1

84

182

61 55

1 7 5

44

155 148

43

0

20

40

60

80

100

120

140

160

180

200

2010 2011 2012 2013 2014 2015 2016

Number of unions approved

Number of unions rejected

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Bangladesh 2016 Page 2

Although the government hardly prioritize workers’

rights issues over the issue of industrial peace and

global competitiveness, the SKOP has given

opportunities for its affiliated unions to force the

government and the employers to listen to the ‘voices’

of the workers—both organized and unorganized.

In recent years SKOP supported several strikes and

rallies. For instance in 2016, the organization held a

rally in front of the National Press Club and also

protested the Bangladesh Power Development Board’s

decision to shift operational electricity of Rangpur and

Rajshahi zones to North-West Zone Power Distribution

Company Ltd.

The National Coordination Committee on Workers

Education (NCCWE)

An alliance of fourteen trade unions has joined into

NCCWE which has become a well-recognized and

credible body to engage in tripartite social dialogue.

The institution represents workers in various forums as

well as activities such as project development.

The Bangladesh Institute of Labour Studies (BILS)

BILS was established in 1995. Out of total 32

registered national trade union centres, 14 of them are

affiliated to this organization. BILS has active

representative in various worker related Government

Policy Intervention Committee. As a whole BILS has a

great access to the working class through its affiliated

national trade union centres and basic unions.2

The organization is the only labour research institution

of Bangladesh. It develops the capacity of the trade

union movement and brings trade unions with different

political views together in concrete co-operation in the

formulation of policy development; inputs and

recommendations.

As a joint institution for the labour movement, BILS has

no direct relation with the political parties in

Bangladesh and has a democratic constitution with

regularly free elections for offices at all levels. Policy

recommendations based on BILS research are being

brought forward to SKOP, which enters into negotiation

with government and political parties.

Aiming to achieve better result in employer-employee

relationship, BILS plays an important role to strengthen

the tripartite mechanism between the government,

employers and employees, in association with a wide

range of other national and international institutions,

e.g. ILO.

BILS regularly organize meetings and dialogues

amongst not only the member unions but beyond. BILS

research input cut across areas such as minimum wage in

garment, shrimp processing, construction and rice

processing sectors, labour law reform, decent work and

has been widely used by the trade unions and SKOP in

their policy advocacy and workers’ awareness

programs.

BILS has registered 20 out of the total 32 national

trade union federations. They have a total trade union

membership of 1.6 million workers in 2016 with a

growth of 7% on average in the period from 2012 to

2016. The largest trade union is Jatiyo Sramik League

with 535,000 members and a growth at 256% from

2012 to 2016 followed by Bangladesh Jatiyatabadi

Srakik Dal with 248,000 members (see more on Table

25).

EMPLOYERS’ ORGANISATIONS

Bangladesh Employers’ Federation (BEF)3

BEF was founded in 1998 and is the national employer

organization, representing 136 affiliates with around

90% of established employers in the private sector. BEF

is represented in most national bi- or tripartite bodies.

The Federation is also a member of the International

Organization of Employers (IOE) and participates in

International Labour Organization (ILO) activities,

representing the employers of Bangladesh. BEF

maintains close contact with employers’ organizations in

other countries and exchanges views and information on

current issues.

BEF provides advisory services on industrial relations,

productivity improvement assistance, labour

court assistance, minimum wages board representation

and inputs to national policy issues. The organization

also promotes programs such as the training program

on Performing Human Resources – Application of Best

Practices; the training program on Workplace Safety

and Compliance; and training and sharing good

practices on labor law and industrial relations.

In the organization, the garment sector has two very

active employers’ organisations: the Bangladesh

Garment Manufacture and Exporters Association

(BGMEA) and the Bangladesh Knitwear Manufactures &

Exporters Association (BKMEA).

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CENTRAL TRIPARTITE STRUCTURES

In Bangladesh there are eight established tripartite

bodies that are installed, but, in practice, only two are

considered as reaching results in establishing

harmonious industrial relations, i.e. the Tripartite

Consultative Council (TCC) and the Minimum Wage

Board (MWB).4

Tripartite Consultative Council (TCC)

TCC is headed by the Ministry of Labour and

Employment (MOLE) and constitutes sixty members

(twenty each from the government, trade unions and

employer organizations). The institution hosts discussions

on a various issues such as formulation of labour

policies, amendments of labour laws, adoption of ILO

Conventions and Recommendations by the government,

among others. In recent years, the institution has

contributed to the amendments of the Labour Law from

2006 (Amendment in 2010 and 2013) along with

various policies, e.g. the National Labour Policy 2012.

This could be interpreted as improvements in the social

dialogue while it remains fragile in Bangladesh.

Minimum Wage Board (MWB)

The Government must establish a wage board consisting

of a Chairman, an independent member and a

representative each from workers and employers, all

appointed by the Government. The Board gives

recommendation to changes in the minimum wage, which

the government can either accept or send back to

review by the Board. The board must meet every five

years. A Wage board covering traditional unorganised

sectors has been established in shrimp processing, metal

and construction after pressure from trade union forums.

The minimum rates of wages for any industry may be

re-fixed after every five years as may be directed by

the Government in any time of the year. The latest

minimum wage readjustment was from 2013 (see also

the section: Working Conditions).

Labour Court

The Labor Act establishes mechanisms for conciliation,

arbitration, and dispute resolution by a labor court. The

Labor courts also have the power to order the

reinstatement of workers fired for union activities. Civil

servants and security forces are covered under

different terms and conditions of employment as well as

file cases in specified courts.

Data reveal that the Labour Court registered more than

100 dispute cases every year and a large majority

were settled in the period from 2010 to 2013. The

number of disputes fell sharply down to 28 cases in

2014 with an upsurge again in 2015 (Table 2). This

was related to many disputes and settlement was not

recorded if it was resolved bi-partite. Just after Rana

Plaza complex collapse in April 2013 there was a

period of higher attention of improved social dialogue

of resolving disputes between employers and

organized workers. The labour justice system in

Bangladesh is slow. Sometimes cases have to stay for

years in the backlog, and courts usually fail to provide

remedy for labour abuses. 5

Table 2 : Labour Disputes & Dispute Settlement, 2010-2015, Number of dispute cases

Year No. of

disputes

No. of settle

dispute

No. of

unsettle

dispute

2010 154 150 4

2011 100 93 7

2012 111 107 4

2013 116 113 3

2014 28 24 4

2015 (Jan-Aug)

53 47 6

Source: Labour Directorate under the Ministry of Labour &

Employment

Other sources show that the Bureau of Manpower,

Employment and Training (BMET) received about 6,000

complaints of salary disputes each year in 2015 and

2016. Around 50% were resolved without the cases

going to the Labour Court. Of 3,000 cases that went

before the Court, 1,000 were resolved through

mediation. According to BMET, the Labour Court

ordered employers to pay their workers in around

1,400 cases each year. However, the employers, in

about 350 cases, ignored the Labour Court's orders.6

Not to mention, in spite of the presence of institutional

mechanisms, workers suffer due to constant negligence

of labour rights and weak enforcement mechanism.

BMET formally investigated complaints of unfair union

discrimination. According to the Solidarity Center, the

Ministry only investigated 11 of 32 filed cases of

antiunion discrimination.

Few strikes follow the cumbersome legal requirements.

Instead strikes or walkouts often occur spontaneously,

especially at workplaces without unions.

Other Tripartite organs

National Industrial Health and Safety Council

Bangladesh Labour Welfare Foundation

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National Skill Development Council

National Child Labour Welfare Council

National Wages and Productivity Commission

Collective Bargaining Agreements

Legally registered trade unions are entitled to bargain

collectively with employers as Collective Bargaining

Agent. However, historically there have been many

conflicts between employers and the organized workers

in Bangladesh which confronted the social dialogue.

Sources have reported that some companies’ workers

do not exercise their collective bargaining rights due to

their unions’ ability to address grievances with

management informally or due to fear of reprisal.7

Based on the limitations of data availability, the

application of Collective Bargaining Agreements (CBAs)

is very narrow. Albeit it is based on somewhat outdated

data, it can still be used as proxy indicator. Data

suggest the workers’ CBA coverage at 5.0% of the

wage and salaried workers in 2006 (Table 3). On the

positive side, in 2015, garment sector unions and their

management reached 22 CBAs in factories with active

unions. This could be interpreted as progress in the

social dialogue in Bangladesh. According to BILS, 18

CBAs were registered in 2016.

Table 3: Status of Collective Bargaining Agreements in Bangladesh

Number of CBAs (2016) 18

Workers covered by CBAs (2006) (wage & salaried earners)

5.0 %

Share of workers covered by CBA (2006) 1.1 %

Source: BILS; ILO, Social Dialogue Indicators, International Statistical Inquiry 2008-09, Technical Brief, 2011

NATIONAL LABOUR LEGISLATION

Constitution8

The constitution of Bangladesh was established in 1972,

and has been amended 15 times since then. The

Constitution prohibits forced labour and gives the right

to form associations or unions, to reasonable wages, to

social security and equal opportunity in employment.

Work is a right and duty, and local government are

encouraged to institute representation of workers.

Labour Act9

The Labour Act of 2006 consolidated 25 separate acts

into one labour code. It regulates employment relations,

working hours, wages, trade unions and industrial

relations. It sets maternity benefits, compensations for

injury and accidents, Occupational Safety and Health

Standards, the labour inspectorate and prohibits child

labour. It also establishes the Wage Board, the Labour

Court, the National Council for Industrial Health and

Safety, and the procedures for industrial disputes

including strikes and lockouts.

In response to the demand of national trade unions

movement as well as international pressure as part of

the disastrously Rana Plaza collapse, Bangladesh’s

Government amended the Labour Act in July 2013.10

Several provisions to improve workplace safety have

been included in the law. There have also been some

improvements in terms of Freedom of Association and

Collective Bargaining, e.g. allowing workers to call on

outside experts for advice during collective bargaining

and there is no longer a requirement that the names of

union leaders are provided to employers. In the public

industrial sector, workers are allowed to elect 10% of

their enterprise officers from outside the workplace,

although this right is not extended to workers in the

private sector. After much delay, the Bangladesh

Labour Rules 2015 in September 2015 was published

on the gazette.11

However, both the Bangladesh's trade union movement

and ILO have raised concerns in issues that were

excluded by the amendments.12 Among others, 30% of

the enterprises workforce still must vote for the

establishment of a union. Again, it did not extend

freedom of association and collective bargaining rights

to workers in export processing zones. It has also been

observed that some new provisions of the law, for

example with respect to the rights of workers who are

contracted for services. Furthermore, new exclusions

from coverage of the labour law of certain sectors may

raise additional concerns about conformity with ratified

conventions.

Other labour legislations

Several other labour related legislations exist to

regulate and set standards and restrictions for the

labour market. 13 ILO has registered a total 173

national labour, social security and human rights related

legislations. One legal piece was approved in 2014

while it increased to four pieces in 2015 and five in

2016 (Table 4). More information on the legislations is

available in Appendix Table 26).

Table 4: Number of approved national labour, social security and human rights related legislations in Bangladesh, 2014-2016

2014 2015 2016

Number of new legislations 1 4 5 Source: ILO, NATLEX, Bangladesh

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Observations on the labour legislation

The International Trade Union Confederation (ITUC) has

a wide range of observations of the labour legislations

protection of trade union rights that, among others, are

related to:14

Power to refuse official registration on arbitrary,

unjustified or ambiguous grounds.

Formalities and/or requirements which excessively

delay or substantially impair the free establishment

of organizations.

Restrictions on trade unions’ right to establish

branches, federation and confederation or to

affiliate with national and international

organizations

Undue or excessive privileges granted to certain

organizations (such as privileges going beyond that

of priority in representation for such purposes as

collective bargaining or consultation by

governments.

Restrictions on the right to elect representatives and

self-administer in full freedom.

Restrictions on the right to freely organize activities

and formulate programs.

Administrative authorities’ power to unilaterally

dissolve, suspend or de-register trade union

organizations.

Farms of less than five workers are excluded from

the Bangladesh Labour Act.

Obligation to observe an excessive quorum or to

obtain an excessive majority in a ballot to call a

strike.

At the company level, strikes are not allowed in new

establishments for three years from the date they

begin commercial operations, where the factory is

newly built, owned by foreign investors or

established with foreign aid.

Authorities’ or employers’ power to unilaterally

prohibit, limit, suspend or cease a strike action.

Excessive civil or penal sanctions for workers and

unions involved in non-authorized strike actions.

Other sources have noted that the government does not

always enforce applicable law effectively or

consistently. Among others, and as previously

mentioned, the Labor Law establishes mechanisms for

conciliation, arbitration, and dispute resolution by a

labour court. Again, workers in a collective-bargaining

union have the right to strike in the event of a failure to

reach a settlement. But, in practice, few strikes followed

the cumbersome legal requirements, and strikes or

walkouts often occurred spontaneously. 15 Equally

important is that Export Processing Zones (EPZs)

currently do not allow trade union participation which is

a notable exception to the national labor law (see also

the sub-section: Export Processing Zones).

Ratified ILO Conventions

With reference to Bangladesh’s ratification of

international labour standards, a total 35 of

International Labour Organization's (ILO) Conventions

are ratified (see also Appendix Table 27):16

Fundamental Conventions: 7 of 8.

Governance Conventions (Priority): 2 of 4

Technical Conventions: 26 of 177.

Out of 35 Conventions ratified by Bangladesh, of

which 33 are in force, 2 Convention have been

denounced; none has been ratified in the past 12

months.

The latest Conventions are the Maritime Labour

Convention, 2006 (MLC, 2006) from November 2014

and the Seafarers' Identity Documents Convention

(Revised), 2003 (No. 185) from April 2014 (see also

Appendix Table 27).

TRADE UNION RIGHTS VIOLATIONS

Bangladesh was ranked 5 out of +5 of ITUC’s Global

Rights Index (Table 5) and classified with ‘no

guarantees of rights’. According to ITUC, this is

interpreted as one of the worst countries in the world to

work in. While the legislation may spell out certain

rights, workers have effectively no access to these rights

and are therefore exposed to autocratic regimes and

unfair labour practices.17

Table 5: Global Rights Index, Bangladesh ranking, 2014-

2016

2014 2015 2016

Ranking on the Global Rights Index

5 5 5

Note: Five clusters in total with ratings from 1 to 5. A country is assigned the rating 5+ by default, if the rule of law has completely broken down. Source: ITUC, Global Rights Index

ITUC registered 21 cases on the systematic violations of

trade union rights from 2015 to 2017 (March) which is

summarized below:18

Obstacles remain to the registration of trade

unions.

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Arrests, suspensions and threats of prosecution

following garment workers’ strike.

Dismissed for forming a union.

Union registration refused at three Azim Group

clothing factories.

Union busting at garment factory.

Anti-union dismissals continue at Chevron.

Union busting and unfair dismissal at Telecom

Company.

Seven demonstrators injured while asking for the

truth about the recent death of among many

deaths in the Bangladeshi shipbreaking industry.

Nurses charged by police.

Multinational energy giant Chevron has fired

workers by text message in order to intimidate

them and discourage union organizing.

Chevron sacks union organizers.

Union busting and police violence against garment

workers.

Mobile phone company union denied recognition.

Forty workers hurt in clash with police.

No justice for murdered union leader three years

after death.

Workers dismissed after striking over safety

concerns.

Union leaders attacked and dismissed for raising

safety concerns.

Anti-union tactics rife in garment factories.

Workers beaten.

Anti-union discrimination against union leader.

Other sources have also registered several cases of

freedom of association and the right to collective

bargaining. Not to mention, some instances of bonded

labour and domestic service, predominately in rural

areas. Children and adults were forced into domestic

servitude and bonded labour that involved restricted

movement, non-payment of wages, threats, and

physical or sexual abuse.19

ILO Complaints Procedure

ILO has one confidential, active freedom of association

case with Bangladesh that was raised by ITUC in April

2016. There are no follow-up cases and with 15 closed

cases (Table 6).

Table 6: ILO Complaints Procedure Freedom of Association Cases, 2016

Type of case Number og cases

Active 1

Follow-up 0

Closed 15

Source: ILO, NORMLEX, International Labour Standards country profile,

Bangladesh

WORKING CONDITIONS

In principle, the National Minimum Wage Board

(NMWB) must meet at least every five years in a

tripartite forum to set wage structures and benefits

industry by industry. Currently the lowest minimum

monthly wage was set in December 2013 at 1,500

taka (US$19) for all economic sectors not covered by

industry-specific wages. The government also agreed in

November 2013 to raise the minimum monthly wage for

garment workers to 5,300 taka (US$67) per month, an

increase of 74%, after protests and strikes in the crisis-

hit industry. The minimum wages have not been adjusted

since then. Even so wages in the garment sector often

were higher than the minimum wage. Many others have

claimed that many garment factories are failing to pay

a new minimum wage.

Table 7: Wages and Earnings Monthly average, median and Legal Minimum Wages

Taka US$

Average wage (2013)

7,388 95

Minimum wage (garment industry) (2013-2016)

5,300 67

Minimum wage (lowest) (2013-2016)

1,500 19

Real average wage growth (2006-2016)

111 %

Real minimum wage growth (2006-2016)

220 %

Source: ILO, Global Wage Report 2016/17; and WageIndicator.org,

Bangladesh

The minimum wage is not indexed to inflation. The

Minimum Wage Board occasionally introduces cost-of-

living adjustments to wages in some sectors, though. The

minimum wage has gradually experienced a growing

gap between the nominal and real minimum wage. This

gap was estimated on a negative value at 7.6% on

average in the period from 2006 to 2016. This is

interpreted as an increasing negative affect on the

wage purchasing power due to the relatively high

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inflation in consumer prices (see also Figure 23). On the

other hand, it was noted that the real wage grew by

3.0%, on average, in the period from 2006 to 2015

(Figure 2).

Figure 2: Wage Trends in Bangladesh 2006-2016, Taka and %

Source: Estimations based on ILO, Global Wage Report 2016/17; and

WageIndicator.org, Bangladesh

Sources have argued that the government does not

effectively enforce minimum wage, hours of work, and

occupational safety and health standards in all sectors.

Although increased focus on the garment industry

improved compliance in some garment factories,

resources, inspections, and remediation are generally

not adequate across sectors, and penalties for

violations are not sufficient to deter violations. 20

Especially the construction, ready-made garment, and

ship-recycling sectors are often singled out with respect

to low occupational safety and health standards due

the sectors growth and visibility, but it is a problem in

all sectors.

Bangladesh has a rising trend of precarious and casual

forms of employment and these wages are around two-

fifth of regular workers. 21 By the same token, the

women’s wages from the more informal economy are

only two-thirds of men’s earnings.

The labour market has confronted insufficient number of

labour inspectors. As of April 2016, the Ministry of

Labour and Employment (MOLE) had 277 active

inspectors of which 235 had been hired after Rana

Plaza collapse. Based on the ratio of inspectors to total

labour force was estimated of 1 per 307,000 workers

while a ratio to employees was 1 per 66,000 workers.

The ILO recommends 1 per 40,000 workers in less

developed countries. 22 The ministry is in progress of

hiring an additional 169 inspectors and strengthening

the Directorate of Labour to the Department of Labour.

Inspections were supposed to be unannounced, but

inspectors sometimes notify factory owners of coming

inspections. Table 8 below provides an overview of the

working conditions in Bangladesh.

Table 8: Working Conditions in Bangladesh23

Normal Weekly Hour Limit 48

Overtime Limit 2 hours per day and 12

hours per week

Max. Weekly Hours Limit 60

Min. Mandatory Overtime premium/time off in Lieu of Overtime Wages

Overtime work must be paid at twice a worker’s

ordinary basic wage

Min. Annual Leave 10 Days

Duration of Maternity Leave Benefits

16 Weeks *

Amount of Maternity Leave Benefits

100%

Source of Maternity Leave Benefits

Employer

* This covers the private sector (the public sector has 24 weeks). Source: ILO, Working Conditions Law Report 2012

WORKFORCE

Bangladesh is one of the world’s most populous and

densely populated countries with a total population of

156.2 million people. The country has a labour force of

72 million workers. Job creation creates by around 1.8

million people entering the labour market every year.

The employment-to-population ratio is slightly higher

than the South Asia average on all levels, and

especially among women. Close to three out of five

(59%) are estimated in the total employment in

Bangladesh in 2016 but still with a deep gap of 37

percentiles between men (78%) and women (41%) –

see Table 9 below.

Table 9: Employment-to-population ratio, Age and Gender distribution, 2016

Sex Age Bangladesh South Asia

Men & Women

Total 15+ 59 % 52 %

Youth 15-24 40 % 33 %

Adult 25+ 67 % 59 %

Men

Total 15+ 78 % 76 %

Youth 15-24 51 % 48 %

Adult 25+ 88 % 87 %

Women

Total 15+ 41 % 27 %

Youth 15-24 29 % 18 %

Adult 25+ 46 % 30 %

Source: ILO, Key Indicators of the Labour Market (KILM), 9th Edition.

0% -1%

3%

13%

-1% -1%

5% 6%

2% 2%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

0

1000

2000

3000

4000

5000

6000

Minimum wage

Real minimum wage

Real wage growth (%)

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Labour force participation rate has experienced slightly

declining trend during the last decade on both total and

youth levels. These trends are similar with the South Asia

average trend (Figure 3). This change has been related

to the upsurge of the enrolment in schooling on all levels

in the country. It is worth mentioning that these labour

force participation rate estimations are somewhat

higher than the Bangladesh Bureau of Statistics report

on Labour Force Survey (LFS) from 2015 that measured

a total labour force participation rate at 57% in

2013.24

Figure 3: Labour force participation rate in Bangladesh and South Asia (SA) 2007-2016, Total & youth, %

Source: ILO, Key Indicators of the Labour Market (KILM), 9th Edition.

Inactivity on the labour market

In contrast, close to two out of five (38%) of the

working age population (WAP, 15+) and one out of

two (54%) of the youth population (15-24 years old)

remain inactive on the labour market; with significant

gaps between men and women (Table 10). It is also

noteworthy to mention that the inactivity rate has been

on a rise, 3 percentiles by WAP and 7 percentiles by

youth in the last decade.

Table 10: Inactivity rate in Bangladesh, 2016

Total Men Women

Inactivity Rate 38 % 19 % 57 %

Inactivity Rate, youth 54 % 42 % 67 %

Note: Inactivity is measured as the proportion of a country’s working-

age population that is not engaged actively in the labour market, either

by working or looking for work.

Source: ILO, Key Indicators of the Labour Market (KILM), 9th Edition.

Unemployment

An estimated 3.2 million people are unemployed in

Bangladesh in 2016, which equals 4.4% of the labour

force. Around 1.7 million youth are unemployed with a

youth unemployment rate that is almost three times

higher at 12%. There are very limited gender gaps.

Overall, the unemployment rates are only slightly

higher than the South Asia averages (Table 11). The

estimation of the total unemployment rate in

Bangladesh is quite close with the Bangladesh Bureau

of Statistics’ LFS from 2015 that measured a total

unemployment at 4.3% in 2013. Although the LFS

measured youth unemployment rate at 8.1 in 2013 that

has been on an increase (see also Figure 4).25

Table 11: Unemployment and Youth Unemployment Rate, 2016, %

Bangladesh South

Asia

Unemployment

Total 4.4 % 3.8 %

Men 4.2 % 3.5 %

Women 4.9 % 4.5 %

Youth

Unemployment

(15-24 years

old)

Total 12 % 10 %

Men 12 % 10 %

Women 12 % 11 %

Source: ILO, Key Indicators of the Labour Market (KILM), 9th Edition.

According to the collected data, the unemployment rate

has been on a stable trend since 2009 and stayed

slightly higher than the region average. On the other

hand, and as just mentioned, the youth unemployment

went on a rise in 2012 and superseding the regions

average in 2013 (Figure 4).

Figure 4: Unemployment Trends, 2007-2016, %

Source: ILO, Key Indicators of the Labour Market (KILM), 9th Edition The main causes of unemployment in Bangladesh are

related to the rapidly increasing population of around

2.0 million new job-seekers every year. The reason for

this trend can be associated to an employment

dominating backward method of agricultural

30

35

40

45

50

55

60

65

70

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Bangladesh - Total Bangladesh - YouthSA - Total SA - Youth

0

2

4

6

8

10

12

14

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Bangladesh - Total Bangladesh - Youth

Southern Asia - Total Southern Asia - Youth

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production; the educational system is not job-oriented,

but rather a more degree-oriented and also a lack of

skilled workers for industries.

Underemployment is widespread. For instance, the

Labour Force Survey from 2010 indicated that 20%

are underemployed, whereas other sources estimated

as many as 40% who work less than 35 hours per

week. Women underemployment was more than double

as high in comparison with men, 34% versus 14%,

respectively. Also rural areas are more affected at

23% compared with 12% in the urban areas.

Other data of the unemployment per educational

attainment illustrated that women have lower

unemployment rates than men on the higher levels of

education (secondary and tertiary) while it is in contrast

on the lower education levels (less than one year and

primary). On the primary education level, the gender

gap is quite low (Figure 5).

Figure 5: Unemployment by level of educational attainment, 2005, %

Source: ILO, Key Indicators of the Labour Market (KILM), 9th Edition

Sectoral Employment

Overall, the employment by aggregate sector has

demonstrated changes particularly a drop from 60% in

1991 to 48% in 2010. In contrast, the industry sector

increased from 13% to 18% while the service sector

from 16% to 35%, respectively (Figure 6)-

Figure 6: Employment by aggregate sector, 1991-2010

Source: ILO, Key Indicators of the Labour Market (KILM), 9th Edition

Based on the latest available data, the total

employment absorbs 54.4 million workers in 2010

which is very dominated by men on all sector and a

total of 70%. As just mentioned, the employment in the

agricultural sector remains the largest sector which

covers 25.7 million workers. The next dominating sectors

are the trade, restaurants & hotels sector of 8.4 million

workers of 15% of the total employment followed by

the manufacturing sector by 6.7 million workers of 12%,

respectively. The sector with the lowest employment

gender gap is in the ‘other sector’ and the agricultural

sector where women present 46% and 41% of the

workers, respectively (see more details on Table 12).

Table 12: Employment sector share in Bangladesh, 2010

Sector Total sector employment

Employment share

Ratio of men in sector

employment

Agriculture 25,679,000 48 % 59 %

Mining & quarrying 109,000 0.2 % 85 %

Manufacturing 6,731,000 12 % 72 %

Electricity, gas & water

123,000 0.2 % 93 %

Construction 2,617,000 4.8 % 91 %

Trade, restaurants & hotels

8,371,000 15 % 87 %

Transport, storage & communication

4,038,000 7.4 % 94 %

Finance, real estate & business services

399,000 0.7 % 87 %

Public administration, education and health

2,856,000 5.3 % 79 %

Other sources 3,435,000 6.3 % 54 %

Total 54,358,000 100 % 70 %

Source: ILO, Key Indicators of the Labour Market (KILM), 9th Edition

0

5

10

15

20

25

30

35

40

Less thanprimary

Primary Secondary Tertiary

Men Women

66 62

48

13 10

18

16 24

35

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1991 2000 2010Agriculture Industry Services

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It is worth mentioning that the informal economy is

dominated by agriculture, mining, construction and

private household (see also the sub-section: Informal

Economy).26

The labour productivity has been relatively low in

Bangladesh. For example, the agricultural sector

contributes 15% of the Gross Domestic Product (GDP)

with an estimation of US$758 share per workers per

year. This is a signal that a vast majority of agricultural

workers lack a qualified education and access to

capital. The trade and hotel & restaurant sector

represent 14% of the total GDP and a share of

US$1,827 per year, which is also relatively low.

Several compelling estimations show that the mining &

quarrying sector contributes very little to toatal

employment of 0.2% of the total employment and

contributes 1.6% of the GDP, close to US$17,000 per

worker per year. Also ‘public sector’ (i.e. community,

social and personal services) has a relatively high GDP

share by sector per worker of almost US$810,900 per

worker per year (see more details on Table 13).

Table 13: GDP share by sector in % (2015) and GDP per worker (2010) in Bangladesh

Sector GDP share

by sector, %

GDP share by

sector per

worker, US$

Agriculture 15 % 758

Mining & quarrying 1.6 % 16,643

Manufacturing 17 % 2,740

Electricity, gas & water 1.3 % 9,734

Construction 7.2 % 2,712

Trade, restaurants &

hotels 14 % 1,827

Transport, storage &

communication 9.9 % 2,858

Finance, real estate &

business services 11 % 8,431

Community, social and

personal services 7.8 % 10,858

Note: GDP share by sector per worker is calculated by the total GDP

(current US$) divided by GDP share per sector origin which then is

divided in number of workers per sector from 2010.

The total GDP share by sector diverges from 100% due to lack of data

of other services in 2010.

Source: Estimations based on data from ILO, Key Indicators of the

Labour Market (KILM), 9th Edition and ADB, Key Indicators for Asia

and the Pacific, Bangladesh.

As already mentioned, Bangladesh has a lower labour

productivity in comparison with the South Asia average

and far below the world average. Not to mention, the

country’s labour productivity is not following as fast as

the region average (Figure 7).

Figure 7: Labour productivity, 2007-2016

Note: Labour productivity is defined as output per worker (i.e. GDP

constant 2011 international US$ in Purchasing Power Parity (PPP)); and

indexed year 2000 (=100).

Source: ILO, Key Indicators of the Labour Market (KILM), 9th Edition

This relatively lower labour productivity in Bangladesh

is also a result of labour skill mismatches that is mainly

affected by under-education (60%). Men have a

slightly higher incidence (61%) than women (57%).

Over-education is not considered a critical issue in

Bangladesh (Table 14).

Table 14: Skills Mismatches between Job Requirements & Qualifications in Bangladesh, 2013 By Sexes & Age Group 15-29 years old, %

Total Men Women

Incidence of over-education

2.4 % 2.8 % 0.9 %

Incidence of under-education

60 % 61 % 57 %

Source: ADB, Key Indicators for Asia and the Pacific, Bangladesh.

As outlined above, the employment in the agricultural

sector has been on a fall which has also been reflected

in the sector’s declining sector structure from 19% of

GDP in 2006 to 16% on 2015. The increase has mainly

been in the industry sector while the service sector

growth was basically flat (Figure 8). The rising labor

costs in China and India moved labor-intensive industries

towards a country like Bangladesh, which has some

comparative cost advantages, such as lower wages.

136 142

151 158

165 173

180 187

195 204

0

50

100

150

200

250

0

5000

10000

15000

20000

25000

30000

35000

40000

Bangladesh

Southern Asia

World

Bangladesh - year 2000 (=100) (right)

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Figure 8: Sector Structure of output in Bangladesh, 2006-2015, % of GDP

Source: ADB, Key Indicators for Asia and the Pacific, Bangladesh.

It has been observed on the labour market that the

wage and salaried workers have been on a rise along

with employers in recent years. The segments of own-

account workers and contributing family workers are

dropping; albeit the former appears to rebound in the

period from 2010 to 2011. These two latter segments

are representing ‘vulnerable workers’ and this signals

that this group fell from 69% in 1996 to 58% in 2011

(Figure 9).

Figure 9: Status in employment in Bangladesh, 1996-2011

Source: ILO, Key Indicators of the Labour Market (KILM), 9th Edition

Another important issue of employment in Bangladesh is

that the labour market is divided into formal sector and

informal economy. The former is a marginalized sector

that to a large degree covers business, finance and

public administration in the service sector (Figure 10).

Data have revealed that only a total 13% operate in

the formal sector while 87% in the informal economy

(see also the sub-section: Informal Economy). At the

national level, 10% of women were engaged in formal

sector employment and it was 14% for men; just as

8.3% of formal employment was in rural areas and

26% in urban zones.27 Taking into consideration that the

wages and other labour regulations are more

effectively applied in the formal sector, it remains a

narrow aspect of the labour force.

Figure 10: Formal and informal employment in Bangladesh, 2013

Source: Bangladesh Bureau of Statistics, Labour Force Survey (LFS),

2015

As already described on Figure 9, the employment in

the wage and salaried workers - which could be

interpreted as a proxy of the formal sector employment

- suggests that some improvements of formalizing the

employment has happened in recent years.

Migration

Bangladesh has experienced massive migration flows

during the last decades estimated at 5 to 7 million

migrants abroad. This could also be interpreted as a

massive export of the labour force that contributes to

an inflow of personal remittance at 9.1% of GDP. In

contrast, the personal remittance in South Asia average

was estimated at 4.6% of GDP (Table 15).

Table 15: Migration Facts

Net migration (2008-2012)

Bangladesh -2,226,481

Net migration to average population per year (2008-2012)

Bangladesh - 1 : 341

inhabitants

South Asia - 1 : 1,297 Inhabitants

Personal transfers i.e. remittances received, % of GDP (average, 2012-2015)

Bangladesh 9.1 %

South Asia 4.6 %

Note: Net migration rate is the difference of immigrants and emigrants

in a period of time. A positive value represents more people entering the

country than leaving it, while a negative value means more people

leaving than entering it.

Source: World Bank, World Development Indicators

The ratio of net migration to the average population

per year equals a negative value of 1 out of 341

0

10

20

30

40

50

60

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Agriculture Industry Services

0

10

20

30

40

50

60

70

1996 2000 2003 2005 2010 2011

Wage & salaried workers

Employers

Own-account workers

Contributing family workers

3% 9%

30%

97% 91%

71%

0%

20%

40%

60%

80%

100%

Agriculture Industry ServiceFormal Informal

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Bangladeshi’s population left the country per year. It is

worth mentioning that this ratio dropped from its peak

of a negative value of 1 out of 200 in the period from

2003 to 2007. Overall this ratio is not declining as fast

as the region average (Table 15 & Figure 11).

Figure 11: Ratio of net migration to total population in Bangladesh and South Asia, 1998-2012

Note. The net migration trend is estimated as the net migration rate

divided by the total inhabitants. Net migration rate is the difference of

immigrants and emigrants in a period of time. A positive value

represents more people entering the country than leaving it, while a

negative value means more people leaving than entering it.

Source: World Bank, World Development Indicators

Most of these migrant workers temporarily migrate to

work in Middle East and Southeast Asia. Factors leading

to this large migration are overpopulation, an

agricultural sector that is often unable to sustain the

livelihood; the jobs are not created in the more stable

formal sector with coverage of the labour regulations,

such as the minimum wage, just as the social protection

is very weak. Better paid jobs opportunities are

abroad. However, some recent trends on the

Bangladeshi migration are related to a growth of

temporary short-term contract. This creates more

vulnerability in the employment. Be that as it may,

short-term labour migration is one of the core foreign

currency earning sectors in Bangladesh due to t

personal remittances. These are mainly used to

purchase consumptions goods, with few making it into

investment. The Government has set up a financial

institution, the Probashi Kallyan Bank, to address this

issue.

Among the migrant workers from Bangladesh, 2.2% are

professional; 32% are skilled; 14% are semi-skilled;

and 52% are less-skilled. Unregulated migrants are

also at higher risks of exploitation.28 It has been noted

that many migrant workers assume debt to pay high

recruitment fees, imposed legally by recruitment

agencies belonging to the Bangladesh Association of

International Recruiting Agencies (BAIRA) and illegally

by unlicensed sub-agents.29

Unskilled women were banned from migrating abroad

until 2006, increasing unregulated migration. Migration

of unguarded women is still frowned upon.30 But, the

number of women labour migration is rising from 0.9%

of women among the total number of migrated segment

in 2003 to 13% in 2013. The top destination countries

for Bangladeshi women migrant workers are Lebanon,

the United Arab Emirates, Jordan, and Saudi Arabia.

According to sources, the women migrants, compared to

that of men, is more vulnerable due to socio-cultural

practices, traditional gender role divisions and gender

discrimination in laws affecting labour force.31

The country has also experienced changes on the

internal migration in terms of the rural-urban pattern,

which was reflected by urbanization within and

between districts. This was most driven by economic

factors such as livelihoods and job opportunities.32

Informal Economy

The labour market and the employment in Bangladesh

are characterized by a dominated informal economy.

As already demonstrated on Figure 10 above, close to

nine out of ten in employment are in the informal

economy, which equals 50.5 million workers in 2013. In

the agricultural sector at least 97% are informal

workers, 91% in the industry sector and 71% in the

service sector. Even close to 30% of the workers in the

public administration and defence, financial sector and

education operate in the informal employment

arrangements. Not to mention, the informal economy

contributes to around 43% of GDP.

According to the national Labour Force Surveys, the

proportion of informal employment to total employment

was on a rise from 78% in 2002 to 87% in 2010 and it

stayed flat in the 2010s, so far. There is a gender gap

of 4 percentiles between men and women in 2013

(Figure 12). It is more prevalent in the rural areas than

in the urban areas. The latest survey from 2013 also

demonstrated a linkage between education level and

informal work; a higher level of education is more likely

to result in employment in the formal sector: 93% of

workers in the informal economy have primary

education, 88% in secondary education and 56% in

tertiary education level.

-386

-200

-341

-1299

-763

-1297 -1400

-1200

-1000

-800

-600

-400

-200

0

1998-2002 2003-2007 2008-2012

Bangladesh South Asia

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Figure 12: Proportion of informal employment to total employment, 2002-2013, %

Source: Bangladesh Bureau of Statistics report on Labour Force Survey

(LFS), Bangladesh 2013, 2015

A key issue is that characterize the informal economy

are the difficulties to enforce labour laws in the ‘sector’.

As an example, workers from the informal economy

receive, on average, at least 35% lower wages than in

the formal sector. With reference to the social

protection coverage, workers from the informal

economy receive less than formal workers.

The Labour Force Surveys have also shown that the

labour productivity of a typical worker in the informal

enterprises is only one-sixth (17%) of the productivity of

their counterpart in the formal sector. The main reasons

for engagement in informal activities are family

traditions (39%) and due to knowledge of the activity

(37%).33

Few trade unions operate in the informal economy.

However, a number of non-traditional groups have

promoted union activities. For example, women’s

organizations have set up cooperative structures for

their members and have taken a series of initiatives in

the areas of adult education, mother and child care and

productive work. In addition, the Labour at Informal

Economy (LIE) is a membership-based organization that

represents 2,865 workers who work as street vendors,

waste pickers, home-based workers and agricultural

workers in Bangladesh.34 LIE is nationally affiliated to

the Bangladesh Free Trade Union Congress (BFTUC).

Child Labour

The minimum age for work is 14, and the minimum age

for hazardous work is 18. The law allows for certain

exceptions, permitting children who are ages 12 or 13

to perform restricted forms of light work. Minors can

work up to five hours per day and 30 hours per week

in factories or up to seven hours per day and 42 per

week in other types of workplaces. By law every child

must attend school through fifth grade. According to

sources, MOLE’s enforcement mechanisms are insufficient

for the large, urban informal economy, and there was

little enforcement of child labour laws outside the

export-garment and shrimp-processing sectors. In

general, resources, inspections, and remedial action are

inadequate. Agriculture and other informal sectors that

had no government oversight employed large numbers

of children.35

On the positive side, Bangladesh has experienced a

drop of 7.4 million working children (18%) in 2002/03

to 3.5 million (8.7%) in 2013. This has been related to

a rising enrolment in school on all levels, a declining

child population as well as the previously mentioned

urbanization trend (see also the section: Education).

These changes have been reflected by a growth of

total working children from 43% to 49% in the

mentioned period. However, according to survey results,

the country has a lower child labour than the Asia and

the Pacific average (Table 16).

Table 16: Working Children Proportion of all Children

Region Year Type Proportion

Bangladesh (age 5-17)

2013

Working children 8.7 %

Child labourers 4.3 %

Hazardous work 3.2 %

Asia & the Pacific (age 5-17)

2012

Children in employment

16 %

Child labourers 9.3 %

Hazardous work 4.1 % Note: Working children classifies as children helping their parents

around the home, assisting in a family business or earning pocket money

outside school hours and during school holidays.

Source: Bangladesh Bureau of Statistics and ILO, Child Labour Survey

2013 and ILO, Marking progress against child labour, Global estimates

and trends 2000-2012

Data reflect that the working children in the agricultural

sector fell from 56% in 2002/03 to 37% in 2013 while

the industry sector increased from 18% to 33%,

respectively. The service sector registered a lower

increase from 26% to 31% (Figure 13). This explains

to some extent that the average monthly income age 5-

17 years old has increased significantly, i.e. higher

wages in the industrial sector than the agricultural and

service sector. Even the average weekly hours increased

from 28.5 in 2002/03 to 39 hours in 2013. Also the

ratio of children in hazardous work to the number of

working children escalated fast from 17% to 37% in

the mentioned period, according to the national Child

Labour Survey from 2013. Children working in such

70%

75%

80%

85%

90%

95%

2002-03 2005-06 2010 2013

Men Women Total

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hazardous activities are often in stone and brick

breaking, dyeing operations, blacksmith assistance, and

construction.

Figure 13: Working children aged 5-17 by broad industry, 2002/03-2013

Source: Bangladesh Bureau of Statistics & ILO, Child Labour Survey,

2013

In the light of the dominating informal economy, it is

likewise reflected among the working children.

Available data suggest that around 95% of working

children operate in the informal economy while 5% in

the formal sector.

Poverty is the main reason for child labour in

Bangladesh, with poor households having to make their

children work to sustain themselves. A recent survey

from 2016 found that 15% of six- to 14-year-olds

livings in the poorest households work an average of 64

hours a week.36 This, in turn, increases the labour supply

and likely keeps the wages lower in the industries. It

also decreases the children’s future earnings due to lack

of education and their increased risk of occupational

disability.

Child labour is popular among employers because

children are docile and submissive and above all either

not paid at all or very low paid. They can be tasked

with duties that adults would not undertake and as they

are free or very cheap labour they can perform job

functions with a very low margin of return on the

employer’s investment. Children frequently join small

businesses as apprentices. It is often the only option to

get an education since the country only has around 100

vocational training schools (see also the sub-section:

Vocational Training). On a positive note, the apprentice

system ensures the children receive some kind of

education but it also keeps them illiterate and poor as

they get no salary for years.

Gender

Bangladesh has made some progress on gender

equality. New legislations have been introduced,

including laws on violence against women, equal pay,

maternity leave, and parliamentary quotas. It has also

been observed that the female literacy rate has

increased. But, the gender gaps remain in employment

as well as weak enforcement of employment laws.37

The readymade garment industry employs roughly 60%

of women, and it is the main employment option for

women outside agriculture (see also Table 12). These

women, on an average are 19 years of age, usually

unmarried, and with little education, hence prone to

exploitation, sexual harassment, and discrimination.

They earn 60% less of what their men colleagues’ earn,

and are exposed to low occupational safety and health

standards.38 Only 1.8% of them are members of union

in this sector (overall only about 15% of trade union

members are women). Be that as it may, this industry

has provided millions of jobs, increased the women’s

real earnings and economic freedom. It has also shown

that fertility rate has decreased and a study suggests

that opening of a garment factory within a village’s

commuting distance, increases schooling of girls in the

village.39

Although women represent a majority of total workers

in the readymade garment industry, women are

generally underrepresented in supervisory and

management positions. A recent Enterprise Survey from

2013 reported that 13% of firms had women

participation in firm ownership compared to the South

Asia average of 17%; and that 16% of full time

employees were women, more than 13% in South Asia

average (Figure 14). It shows that women in

Bangladesh have a both lower ownership participation

and full time employment in comparison with the

Enterprise Survey from 2007.

Figure 14: Females in Management & Ownership, 2013

Source: The World Bank, Bangladesh Enterprises surveys, 2013

56%

18%

26%

37% 33%

31%

0%

10%

20%

30%

40%

50%

60%

Agriculture Industry Service

2002/03 2013

0%

5%

10%

15%

20%

25%

30%

35%

Firms with female top manager Firms with female participationin ownershipBangladesh South Asia Low income

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As already mentioned in this report, the total labour

force participation has been on a declining trend, and it

is for both men and women with a widening gender

gap from 31 percentage points in 1995 to to 38

percentage points in 2016. During the same period the

gender gap grew from 20 to 25 percentage points

among youth (Figure 15). On the other hand, the

gender gap in the unemployment rate has experienced

a declining trend among the total and youth segments

(Figure 16).

Another reflection of the labour market’s challenges in

terms of the gender egalitarianisms is that large gaps

in earnings between women and men remain very

present with a wage gender gap for women at 21%

less per hour than men. One reason is that women’s

employment is most dominated in the sectors with the

lowest average wages (e.g. education, health & social

work and hotels & restaurants industries) as well as in

the informal sector. More girls enrol in primary and

secondary education than boys; the latter is also four

times more likely to be engaged in child labour.

Figure 15: Labour force participation rate by sex, 1995-2016, Total and Youth, %

Source: ILO, Key Indicators of the Labour Market (KILM), 9th Edition.

Figure 16: Unemployment by sex, 1995-2016, Total and Youth, %

Source: ILO, Key Indicators of the Labour Market (KILM), 9th Edition.

Youth

According to the Bangladesh Bureau of Statistics (BBS),

the current youth population in Bangladesh is about 52

million, more than 33% of the total population. The

youth labour force on the age group 15-24 years old is

estimated at 12.7 million youth in employment in 2016

which equals 40% of the employment-to-population

ratio. This segment is confronting multifarious challenges

mainly rooted from social structure and economic

conditions.

Due to the rapid growth in population, the country fails

to create adequate opportunities for the youth in

accordance with their educational qualifications. For

example, educated youth are facing problems entering

the formal job market, primarily because of the lack of

access to information related to job and training.

Stated differently, the education system is not adjusted

to the needs of the labour market (see also the section:

Education). Many students are doing well in their studies

and passing out with good grades but often their

qualifications do not fit with the existing market

demand and it causes the youth’s unemployment rate to

increase.40 This trend is demonstrated by the increase in

the proportion of young people not in employment,

education or training (NEET) (Figure 17).

Figure 17: Proportion of young people not in employment, education or training (NEET), 2005-2013, %

Note: NEET for persons aged 15 to 24.

Source: ILO, Key Indicators of the Labour Market (KILM), 9th Edition The Government published a National Youth Policy in

2003. It is outdated and the government launched a

revision of the youth policy in 2010 to link it up with the

political manifesto of the Bangladesh Awami League

Party's Vision 2021.41 It appears that the government

has placed higher attention on youth empowerment and

increasing finance on this area. So far, a draft national

youth policy has been debated in forums during the last

couple of years and a revised draft policy was reached

in 2016. On the other hand, the policy has lacked

concrete steps for achieving goals and its

0

20

40

60

80

100

1995 2000 2005 2010 2016Men - Total Women - Total

0

2

4

6

8

10

12

14

1995 2000 2005 2010 2016

Men - Total Women - Total

Men - Youth Women - Youth

0%

10%

20%

30%

40%

50%

60%

70%

Total Men Women

2005 2013

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implementation has been uncertain. Also a review and

revising of the policy have not been clear.42

EDUCATION

Primary education is free and compulsory until the age

of 10, but many children are drop out of school and

work as working children to help support the household.

In reality many are still not receiving education: 38% of

men with more than 25 years old have no schooling at

all and it is higher among women at 47%. This is

especially for children from poorer households in rural

areas.

Based on the limitations of data availability, females

have a higher net enrolment in school than males in

Bangladesh as well as hovering above the South Asia

average. Bangladeshi males in net enrolment in school

are on the region average. It is interesting to observe

that the net enrolment in secondary education is on a

fast increase for both males and females. The latter

remains on a higher enrolment rate than the former.

Both are below the region average, though. Not to

mention, males are more enrolled in tertiary education

than females and the enrolment has been stalled in

recent years (see more on Figure 18).

Figure 18: School Level and Enrolment in Bangladesh & South Asia, 2005-2014, Males and females, %

Note: Net enrolment is the ratio of children of official school age, who

are enrolled in school to the population of the corresponding official

school age. Gross enrolment is the ratio of total enrolment, regardless

of age, to the population of the corresponding official school age.

Gross primary enrolment is therefore sometimes higher than 100%.

Source: World Bank, Education Statistics

The education has several deficiencies. This is indicated

by the minimum international standard for teacher-

student ratio of 1:30 but in Bangladesh there is one

teacher for every 53 students. Sources have argued

that the lack of qualified teachers and poor school

facilities in terms of the number of schools, classrooms,

libraries and playgrounds are responsible for poor

quality education at primary schools. In addition,

around 70% of children are unable to read or write

properly, or perform basic mathematical calculations

even after five years at primary school. By the same

token, teachers feel uncomfortable in adopting

innovative educational approaches as they fear that

using other approaches may result in poor

performances in examinations. Not to mention, the

secondary and higher secondary curriculum appears not

reflect the labour market demand or job-oriented

education.43

Vocational Training

The number of vocational students has steadily

increased from 367,000 in 2009 to 430,000 in 2013

which equals a growth of 17%. It is noteworthy to

mention that females have a relatively high enrolment in

vocational training in comparison with the South Asia

average at 33% and 25%, respectively. Equally

important the ratio of pupils in vocational student to all

pupils in secondary education is relatively high at 3.4%

and is hovering above the region average. The

teacher- student ratio is estimated at 1:20 (see more on

Table 17).

75

80

85

90

95

100Net enrolment in primary school

Bangladesh,

Male

Bangladesh,

Females

South Asia,

Male

South Asia,

Women

30

35

40

45

50

55

60

65Net enrolment in secondary school

Bangladesh,

Male

Bangladesh,

Females

South Asia,

Male

South Asia,

Women

0

5

10

15

20

25Gross enrolment in terciary school

Bangladesh,

Male

Bangladesh,

Females

South Asia,

Male

South Asia,

Women

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Table 17: Statius of Vocational Training

Bangladesh 2009 2013

Pupils in Vocational Training 367,409 429,558

Enrolment in secondary

vocational, females 109,742 142,991

Teachers in secondary

vocational education 17,442 21,040

Comparative estimations Country/region %

Secondary education,

vocational pupils (% women)

(2013)

Bangladesh 33 %

South Asia 25 %

Ratio of pupils in vocational

student to all pupils in

secondary education (2010-

2013)

Bangladesh 3.4 %

South Asia 1.6 %

Ratio of pupils in vocational

training out of 15-24 year

olds (2010-2013)

Bangladesh 1.2 %

South Asia 0.7 %

Source: World Bank, Education Statistics

Other sources have argued that women’s participation

in TVET in Bangladesh is quite low from 9% to 13% in

public institutions. This is significantly lower than the

estimation on Table 17, which diverge from the private

sector TVET pupils’ participation. Notwithstanding, these

relatively low percentages of public TVET is related to

stereotypical occupations irrespective of market

demand.

Other data reveals that the growth of the pupils in

vocational training in Bangladesh has kept a faster

pace than the South Asia average during the last

decade (Figure 19).

Figure 19: Ratio of Vocational Pupils in Secondary Education, 2004-2014, %

Source: World Bank, Education Statistics

Traditionally vocational training has not had a strong

links to industry and the government’s Technical

Vocational Education and Training (TVET) went through

an overhaul in 2006. It produced a National Technical

Vocational Qualification Framework (NTVQF) in 2009

and a National Skill Development Policy (NSDF) in

2011. Still the country has only around 100 vocational

training schools, which make it difficult for most of the

poorer younger people to get vocational training.

NSDF aims at a future growth of skills development with

clear, ambitious targets, including:

TVET students shall comprise 20% of all secondary

students (currently 3.5%).

Total enrolment in TVET should increase by 50%.

Women’s enrolment should increase by 60%.44

Among others, a program was launched in October

2015 to scale up the support to strengthen technical

and vocational education in Bangladesh. This financing

will enable 200,000 poor students to complete

vocational training and diploma courses.

SOCIAL PROTECTION

Few contributory social protection schemes exist in

Bangladesh, and most forms of social protection are

through non-contributory social assistance. The latter

operate with around 140 programs that cut across 20

ministries, which give rise to duplication in program

objectives and beneficiaries. 45 In addition, many

programs are donor funded.46 Overall, Bangladesh has

extremely low health social protection coverage at

1.4% of the population while the region average was

estimated at 58%. By the same token, the social

protection expenditure is quite low at 2.7% of GDP

(Table 18).

Table 18: Social protection facts in Bangladesh and Asia & the Pacific (AP), 2011, %

Indicator Measure Bangladesh AP

Total social protection expenditure

% of GDP 2.7 % 4.6 %

Public health care expenditure

% of GDP 1.1 % 1.5 %

Health social protection coverage

% of total population

1.4 % 58 %

Trends in government expenditure in health

% change per year

8.6 % N/a

Source: ILO, Social Protection, Statistics and indicators

In the light of health-care expenditure not financed by

private household's out-of-pocket payments it has also

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

3,0%

3,5%

4,0%

Bangladesh South Asia

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been estimated relatively low at 40% and stayed on a

flat growth during the 2000s (Figure 20).

Figure 20: Health-care Expenditure Not Financed by Private Household's Out-of-pocket Payments, 1995-2011 Selected Asian countries, %

Source: ILO, Addressing the Global Health Crisis: Universal Health

Protection Policies, Social Protection Policy Papers, Paper 13, 2014

Data also show other divergences: first, the proportion

of pensionable age receiving an old age pension is

40%, which is more in line with the region average that

is assessed at 47%. Second, Bangladesh has basically

no active contributors to a pension scheme. Thirdly,

formal sector workers currently enjoy some social

protection, but informal sector workers and casual

workers do not have access to such benefits (see more

on Table 19).47

Table 19: Pension Benefits, Coverage and Contributions in Bangladesh and and Asia & the Pacific (AP), 2011, %

Theme Measure Bangladesh AP

Social benefits for

active age % of GDP 0.5 % 0.4 %

Pensionable age

receiving an old age

pension (age 65+,

62+ for OA

allowances for

women)

Proportion

of total 40 % 47 %

Active contributors to

a pension scheme 15+ 0.0 % 34 %

Active contributors to

a pension scheme

15-64

years 0.0 % 27 %

Source: ILO, Social Protection, Statistics and indicators

A publicly paid Old Age Allowance programme

operates for persons who had an annual income less

3,000 taka per year (US$40), providing a 250 taka

per month (US$3.4).48 It has 2 million beneficiaries and

covers 7% (US$81 million) of the total social protection

programs expenditures. The system is valuable for the

country’s vulnerable older people, yet holds a weakness

in the form of means testing, low benefits and not

effectively reaching its target population because of

power abuse and corruption.49

The retirement pensions or benefits for government

employees and family members of retired persons have

currently 325,000 beneficiaries. It is less than 1% of the

total social protection beneficiaries. On the other hand,

it is the single largest expenditure of all social

protection programs covering 19% (US$227 million).

Employers are required to provide a termination

benefit. Permanent employees receive half their

average wage for 120 days, causal workers and

temporary workers for 60 days. 50 Employees in the

formal sector are entitled to disability and survivor

benefits, for accidents in employment. Employers bear

the full cost. Disagreements on compensation can be

settled at the Labour Court.51

There are five major labour market programs and they

cover 35% of the total social protection expenditure.

They have 10.2 million beneficiaries, which is a quite

large number of total social protection beneficiaries, i.e.

36%.52

Some key challenges of the social protection schemes in

Bangladesh are related to the targeting of the services.

First, almost 60% of recipients were non-poor, i.e. a

large share of resources does not reach the target

groups such as children under five years and the

elderly. Second, a majority of the programs are most

addressing the rural poor and not confronting the

internal migration movement from rural to urban zones

that are in progress.

After several years of drafting and debating a

National Social Protection Strategy was finally enacted

in 2015. It aims towards a social protection system that

is inclusive, better mitigates lifecycle risks and prioritizes

the poorest and most vulnerable. It is too early to assess

the impact of this policy.

Although informal sector workers are not entitled for

any forms of social protection, in November 2013, the

government introduced a five-year group insurance

scheme for the construction workers. The annual

premium per worker has been set at Tk 1,300

(US$16.6) out of which each worker has to deposit

Tk 450 (US$5.8) and the ministry Tk 850 (US$10.9).

BILS was actively involved in the whole process of

insurance.

5%

15%

25%

35%

45%

55%

65%

1995 2000 2005 2006 2007 2008 2009 2010 2011Bangladesh CambodiaMyanmar NepalPakistan Philippines

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GENERAL ECONOMIC PERFORMANCE

The economy experienced a real growth at 6.2%, on

average, during the last decade (Table 20). Although

the country has gone through a labour market structural

transformation, the Gross Domestic Product (GDP) sector

shares have been on a relatively lower change, e.g. the

service sector stayed on a flat growth at 56% of GDP

during the last decade; with a lower growth on the

labour productivity rate than the region average, as

already described. Be that as it may, Bangladesh

aspires to be a middle-income country by 2021.

Table 20: Key Facts on General Economic Performance in Bangladesh, 2015

GDP 195 billion US$

GDP real growth (2006-2015, av.)

6.2 %

Doing Business * (2017) +2 change in rank

176 of 190 countries

Human Development Index ** +2 in rank

139 of 188 countries

Gini Index *** (2010) 32.1

110 of 145 countries * A high ranking on the Ease of Doing Business Index means the

regulatory environment is more conducive to the start-up and operation

of a local firm.53 Doing Business ranking change is in the period 2016-

2017.

** The Human Development Index (HDI) measures the average of a

long and healthy life, access to knowledge, and a decent standard of

living. HDI ranking change is in the period 2010-2015.

*** A Gini coefficient of 1 (or 100 percent) expresses maximal

inequality among values. This Gini Index ranks the first country with the

highest inequality while the number 145 has the highest equality.

Source: CIA, The World Factbook, Bangladesh; World Bank, World

Development Indicators; World Bank & IFC, Ease of Doing Business

2016/2017 in Bangladesh; and UNDP, Human Development Index

trends

On average, the GDP per capita growth was slightly

below the region average during the last decade. The

fast downturn in 2008 was related to the global

financial crisis (Figure 21).

Figure 21: GDP growth per capita, 2006-2015, Bangladesh and South Asia, Annual %

Source:World Bank, World Development Indicators;

On a different view, Bangladesh’s GDP per capita

measured in Purchasing Power Parity (PPP) is below the

South Asia average and with a ranking 177 out of 230

countries (1 is highest). The country’s economic growth is

not keeping the tempo to curb the regional gap. On the

other hand, the country has a relatively high level of

income equality which is estimated at 110 out of 145

countries, ranking next to Croatia and Canada. It

indicates that the economic growth is spreading more

evenly in Bangladesh. However, data point toward a

very limited reduction on the inequality in the

distribution of family income from 33% in 2005 to 32%

in 2010 (Figure 22).

Figure 22: GDP per capita, Purchasing Power Parity, US$ and Gini Index, 2005-2015

Note: The comparison of the inequality in the distribution of family

income (Gini Index) should be interpreted with some reservations due to

diverging sources, but can still be applied as proxy indicators.

Source:World Bank, World Development Indicators;

According to the Human Development Index (HDI),

Bangladesh has created some improvements and

reached a ranking 139 out of 189 countries in 2015 (1

is highest) (Table 20). Despite the relatively low

inequality in the income distribution, the poverty

actually remains very critical. The latest measurements

of working poor from 2010 showed that 74% of the

population was extremely poor living with less than

US$1.9 per day and 13% were moderately poor living

between US$1.9 and US$3 per day. Stated

differently, 86% of the population lives below US$3

per day. To point out, the number of extremely poor

fell by 9% percentiles from 2000 to 2010 while the

moderately poor’s grew by 5%. An evolution of a

middle-class, which was registered as the near poor

and the developing middle-class segments, increased

only slightly in the same periods, i.e. 2% and 1%,

respectively (Table 21). Factually, Bangladesh has still

a much higher poverty and a lower middle-class in

comparison with the South Asia averages: 31% of the

population was extremely poor, 34% was moderate

poor, 23% was near poor and 12% was development

0

1

2

3

4

5

6

7

8

2005 2006 207 2008 2009 2010 2011 2012 2013 2014 2015

Bangladesh South Asia

33,2

32,1

31,5

32

32,5

33

33,5

0

1000

2000

3000

4000

5000

6000

Bangladesh South Asia Bangladesh - Gini Index (left)

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middle-class. As demonstrated on Figure 9, the wage

and salaried worker segment is on a fast growth and it

suggests that the poverty reduction during the 2010s, so

far, is on a declining trend, but it has not yet been

registered in the statistical accounts.

Table 21: Poverty and middle-class trends in Bangladesh, 2000-2010

Estimated poverty line 2000 2010 Growth

Percentile 2000-2010

Extremely poor (<US$1.9 a day)

81 % 74 % - 9 %

Moderately poor (≥US$1.9 & <US$3 a day)

8 % 13 % 5 %

Near poor (≥ US$3 & <US$5 a day)

5 % 7 % 2 %

Developing middle class (≥US$5 & <US$13 a day)

5 % 6 % 1 %

Note: The poverty l ine i s based on headcount , i .e. % of

population on living in households with consumption or income per

person below the set poverty line.

Source: ILO, Key Indicators of the Labour Market (KILM), 9th Edition

The inflation in consumer prices has following the region

average trend and staying slightly above 6% during

the last decade. The country’s inflation peaked of 11%

in 2011 decelerated afterwards standing at around

6% in 2015 (Figure 23). As demonstrated on Figure 2

the inflation created a significant gap between the

nominal minimal wage and the real minimum wage since

2013.

Figure 23: Inflation in consumer prices trend 2006-2015, Bangladesh and South Asia, %

Source:World Bank, World Development Indicators;

Bangladesh’s capital formation increased during the

2010s, so far; and superseded the South Asia average

since 2014 (Figure 24). This trend point towards how

much of the new value added in the economy is

invested rather than consumed; thus, the country is on a

positive side in terms of strengthening its economy and

increasing the productivity.

Figure 24: Gross Fixed Capital Formation trend 2006-2015, Bangladesh and South Asia, % of GDP

Source:World Bank, World Development Indicators;

The Doing Business indexed Bangladesh as 176 out of

190 countries in 2017 improved from a 178 ranking in

2016. Not to mention, the country is scoring lower than

the South Asia average as well as countries such as

Pakistan (144) and India (130). Out of ten indicators,

the country still scores extremely low on enforcing

contracts (189), getting electricity (187) and registering

property (185). Especially starting a business drooped

from 115 to 122 and getting credit from 152 to 157

(see more on Table 22).

Based on this Index indicators’ rankings could be

interpreted that doing business in Bangladesh is not

easy and with many deficiencies to move towards a

more formalized labour market.

Table 22: Bangladesh’s Ease of Doing Business

Topics 2017 2016 Change

Starting a Business 122 115 7

Dealing with Construction Permits 138 138 No change

Getting Electricity 187 187 No change

Registering Property 185 186 1

Getting Credit 157 152 5

Protecting Minority Investors 70 69 1

Paying Taxes 151 148 3

Trading Across Borders 173 173 No change

Enforcing Contracts 189 189 No change

Resolving Insolvency 151 153 2

Note: Ease of doing business index (1=most business-friendly

regulations). Doing Business 2016/17 indicators are ranking from 1

(top) to 190 (bottom) among other countries. The rankings tell much

about the business environment, but do not measure all aspects of the

business surroundings that matter to firms and investors or that affects

the competitiveness of the economy. Still, a high ranking does mean that

0

2

4

6

8

10

12

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Bangladesh South Asia

20

22

24

26

28

30

32

34

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Bangladesh South Asia

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the government has created a regulatory environment conducive to

operating a business.

Note: This Doing Business Index has been controversial due to flawed

data in some sections, e.g. undervalued paying taxes.54 However, the

table above can still be used as indicative measurement with

reservations.

Source: World Bank & IFC, Ease of Doing Business 2016/2017 in Bangladesh The governance environment in Bangladesh has

experienced limited improvements during the period

from 2010 to 2015, basically only in terms of control of

corruption and this indicator remains on a low score.

Especially the voice and accountability and the

regulatory quality dropped significantly down on the

scoring (see more on Table 23). This is exemplified by

strikes, including a nationwide transportation blockade

implemented by the political opposition during the first

several months of 2015.

In general, these indicators have also a signal that the

labour market is facing huge challenges to improving a

sound environment for workers, central tripartite

structures and curb the rampant rights violations.

Table 23: Bangladesh's Governance Indicators, 2010-2015 Score, Percentiles and Change

Year Voice &

Accountability

Political

Stability

Government

Effectiveness

2010 -0.28/37%

-1.40/10%

-0.75 / 26%

2015 -0.49/31% -1.15/11% -0.73 / 24%

Year Regulatory

Quality Rule of Law

Control of

Corruption

2010 -0.83/23%

-0.79/ 26%

-1.02 / 15%

2015 -0.93/17% -0.70/ 27% -0.88 / 18%

Note: The Governance Indicators score from ‐2.5 to 2.5 while the

percentiles rank from 0 (lowest) to 100 (highest).55

Source: World Bank, Worldwide Governance Indicators

TRADE

Steady garment export growth combined with

remittances from overseas Bangladeshis is the largest

contributors to Bangladesh's economic growth. The

export sector is especially dominated by labour

intensive textile production, accounted for more than

80% of total exports and surpassed US$25 billion in

2015 (see also Figure 26). The textile sector continues

to grow and has often attracted international attention

for its poor working conditions and use of child labour.

It is noteworthy to mention that both import and export

have experienced a declining trend which is similar with

the region average (Figure 25).

To point out, the country has a significant trade gap

between the import and the export in terms of the GDP

by 25% and 17%, respectively (Table 24). The foreign

direct investment (FDI) flow has been very low but has

been on a rise in recent years peaking at 1.7% of GDP

in 2015, and reaching the region average (see more on

Table 24 & Figure 25)

Table 24: Trade & Foreign Direct Investment (FDI) in Bangladesh, 2015

Exports US$34 billion

17 % of GDP

Imports US$48 billion

25 % of GDP

FDI Flow US$3.1 million

1.7 % of GDP

FDI Stock * US$13 billion

5.8 % of GDP

* Year 2016 estimation.

Source: World Bank, World Development Indicators;

Figure 25: Trade and Foreign Direct Investment trends, 2006-2015, % of GDP

Source:World Bank, World Development Indicators

Due to increased labour costs in China, the world’s

textile production is still moving South to countries like

Pakistan, India, and Indonesia; and especially where

labour cost remains very low.56

0

5

10

15

20

25

30

35

2006 2007 2008 2009 2010 2011 2012 2013 2015 2015

Export - Bangladesh Import - Bangladesh

FDI - Bangladesh Export - SA

Import - SA FDI - SA

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Figure 26: Bangladesh's Products Share of Exports, 2014

Source: MIT, Alexander Simoes, The Observatory of Economic complexity, What does Bangladesh export?

The main export markets for Bangladesh is mainly the

European Union (47%) and the United States (14%)-

see Figure 27 below.

Figure 27: Bangladesh's Main Export Markets, 2015

Source: European Commission, DG TRADE, Bilateral Relations, Statistics

Trade Agreements

Bangladesh ratified the Trade Facilitation Agreement

(TFA) in September 2016, becoming the 94th member

of the WTO and 12th least developed country (LDC) to

do so. The TFA contains provisions for expediting the

movement, release and clearance of goods, including

goods in transit.57

Bangladesh has several bilateral Trade Agreements,

including Pakistan, India and Sri Lanka. With the latter,

a free trade agreement (FTA) was discussed in March

2017 to boost the bilateral trade and the countries aim

to sign the agreement in near future. An agreement was

signed with Russia in February 2017 to strengthen

bilateral relations in trade.

The country also associated with several regional trade

agreements, including:58

Bangladesh benefits from the United States’

Generalised System of Preferences (GSP). These

are unilateral trade benefits from the U.S.

government, allowing duty and quota free access

for some products. Since 2007 the American

Federation of Labour and Congress of Industrial

Organizations called the United States' government

suspending trade preferences to Bangladesh under

the GSP, unless the government took steps to ensure

respect for the rights of workers. The disaster in

Rana Plaza in 2013 triggered a decision and the

United States imposed trade sanctions in June

2013 due to the recurring failure to respect

fundamental workers’ rights.

Bangladesh also benefits from the EU’s unilateral

Generalised System of Preferences, Everything but

Arms (EBA), which allows duty and quota free

access for all products except arms. The EU is also

in the process of reviewing to suspend trade

preferences to Bangladesh. During February 2017

the global trade union movement promoted

campaigns to make EU initiate investigations into

serious and systematic violations of fundamental

workers’ rights in Bangladesh as provided under

the EBA trade scheme. The call follows the

arbitrary arrest and detention of workers and

union leaders, the closure of union offices, mass

dismissals and ongoing threats and intimidation of

union activists.59

Export Processing Zones (EPZ)

In July 2014 the government approved, in principle, the

draft of the Bangladesh Export Processing Zone (EPZ)

Labour Law to ensure the welfare of the EPZ workers

by allowing them in constitution of organizations. The

draft EPZ law was approved by the Cabinet in

February 2016, but it has not yet been submitted to

Parliament for approval. The draft law has been

submitted to a review of comparable practices in

neighboring countries. In practice, it is observed that

EPZ factory officials interpret EPZ regulations and

applicable law narrowly and claim they are exempted

from broader Labour Act. This has made trade unions

and ILO raise concerns of disparities between the draft

EPZ law and the existing Labour Rights Act.60 By the

same token, the U.S. GSP Action Plan outlined that EPZ

laws should be in line with international labour

standards and workers inside and outside the zones

enjoy the same labour rights.

It has also been observed that the law provides for

strict limits on the right to strike, which includes discretion

of the BEPZA’s chairman to ban any strike based on

Non-knit men's suits;

16%

Knit T-shirts; 16%

Knit Sweaters;

13% Non-knit women's

suits; 10%

Non-knit men's shirts;

7%

Non-knit women's

shirts; 4%

Others; 34%

EU 28; 47%

USA; 14% Canada; 3%

China; 2%

Japan; 2%

Turkey; 2%

Others; 30%

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his/her views as prejudicial to the public interest. There

were no registered legal strikes in the EPZs.

Bangladesh has had eight EPZs since the 1980s run by

the Bangladesh Export Processing Zone Authority

(BEPZA). According to BEPZA, the EPZs are expanding

from 406 enterprises in 2011/12 to 419 in 2012/13.

In the same period, the employment in the EPZs

increased from 340,000 to 374,000 EPZ workers, which

equals a growth of 10%. Around 64% of workers in the

EPZ are women. In contrast, the EPZ workers constitute

0.6% of the total labour force and 2.7% of the wage

and salaried workers. With reference to the latest

data, the number of employment peaked in 2010/11

by 43,666 workers than dropped down to close to

34,000 in the period 2011/12 and 2012/13 (Figure

28). Other sources have estimated that in the EPZs,

where approximately 458,000 Bangladeshis workers in

2015.61

Figure 28: Employment in EPZ in Bangladesh, 2008-2013, numbers

Source: BEPZA. Annual Report 2012-13

One out of two EPZ workers (50%) are operating in the

Chittagong EPZ followed by Dhaka EPZ and Karnaphuli

EPZ with 24% and 10% of the EPZ workers,

respectively (see more on Figure 29).

Figure 29: Employment in EPZs in Bangladesh, 2013 Number of employees in EPZs and % of total

Source: BEPZA. Annual Report 2012-13

As illustrated in Table 7, BEPZA raised Basic Wage

2013 for Garment Workers within EPZs in December

2013 by 10%. Apart from this yearly increment against

the 5% yearly increment on basic wage for non-EPZ

factories, the EPZ Basic Wage 2013 increased actually

relatively higher in comparison with the wage increase

of those in non-EPZ garment factories (Figure 30).

Figure 30: Bangladesh Basic Wage in EPZs, 2010-2013 Taka and % of relative Basic Wage Increases

Source: RISE Society, Minimum Wage 2013 for Bangladesh Export

Processiing Zones, December 26, 2013

A large majority of the EZP enterprises produce textile

items (garments, garment accessories, textile products,

footwear, etc.) and are from Bangladesh, South Korea,

China, Taiwan, Hong Kong, Japan, and India.

Collective bargaining is virtually non-existent in the EPZs

and BEPZA is not promoting CBAs in these zones. 62

Special legislation prohibits workers from joining unions

in EPZs. Instead they can form Workers’ Welfare

Associations (WWAs) elected by the workers, such as

the rights to bargain collectively and represent their

members in disputes. According to BEPZA, 231 WWAs

were formed as of September 2016 and they are

prohibited from establishing any connection to outside

political parties, unions, federations, or NGOs.

However, with the exception of limitations on the right

of association and worker protections in the EPZs,

national labor law prohibits antiunion discrimination.

16394

28064

43666

33598 33987

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

2008/09 2009/10 2010/11 2011/12 2012/13

Chittagong EPZ;

185006; 50% Dhaka EPZ;

88033; 24%

Karnaphuli EPZ; 39070;

10%

Adamjee EPZ; 30874;

8%

Comilla EPZ; 14713; 4%

Uttara EPZ; 8679; 2%

Ishwardi EPZ;

6071; 2%

Mongla EPZ; 1562; 0%

33%

32%

31%

30%

29%

27%

28%

29%

30%

31%

32%

33%

34%

0

1000

2000

3000

4000

5000

6000

7000

8000

Apprentice Helper JuniorOperator

Operator SeniorOperator

High SkilledWorker

Basic Wage 2010Basic Wage 2013Increases Basic Wage 2013 vs Minimum Wage

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APPENDIX: ADDITIONAL DATA

Table 25: Trade Union Federations in Bangladesh, 2016 Total members, growth in membership and women participation in percent

National Trade Union Federations of Bangladesh Total members Growth, 2012-2016 Women

BFTUC - Bangladesh Free Trade Union Congress 97,540 15 % 26 %

BJSD - Bangladesh Jatyatabadi Sramik Dal * 247,454 37 % 10 %

BJSF - Bangladesh Jatiya Sramik Federation 23,055 129 % 25 %

BJSJ - Bangladesh Jatiya Sramik Jote 15,009 -82 % 10 %

BLF - Bangladesh Labour Federation * 180,044 77 % 30 %

BMSF - Bangladesh Mukto Sramik Federation * 132,301 -35 % 35 %

BSSF - Bangladesh Sanjukta Sramik Federation * 132,301 -23 % 9 %

BSF - Bangladesh Sramik Federation 3,639 -39 % 5 %

BTUF - Bangladesh Trade Union Federation 1,648 0 % 5 %

BTUK - Bangladesh Trade Union Kendra 50,180 -38 % 18 %

BTUS - Bangladesh Trade Union Sangha 19,303 -87 % 2 %

JSF - Jatiya Sramik Federation 19,101 -50 % 25 %

JSFB - Jatiyo Sramik Federation Bangladesh 16,367 3 % 6 %

JSJ - Jatiyo Sramik Jote 2,260 0 % 30 %

JSJB - Jatiya Sramik Jote Bangladesh 7,130 -89 % 15 %

JSL - Jatiyo Sramik League * 534,463 256 % 15 %

JSP - Jatiya Sramik Party 70,640 -36 % 16 %

NTUF - National Trade Union Federation 1,798 0 % N/a

NWF - National Workers' Federation 10,467 0 % 12 %

SSF - Samajtantrik Sramik Front 22,850 0 % 10 %

Total 1,574,345 7 % N/a

* Affiliated to the International Trade Union Confederation (ITUC).

Note: This table registered 20 of the total 32 national trade union federations of Bangladesh.

Sources: BILS, ITUC, List of Affiliated Organisations, 2012; www.younionize.info

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Table 26: List of approved labour related legislations in Bangladesh, 2014-2016

Type of legislation Legislation

2014

Education, vocational guidance and training Non-Formal Education Act, 2014

2015

Elimination of child labour, protection of

children and young persons Youth Organizations (Registration and Management) Act, 2015

Occupational safety and health Formalin Control Act, 2015

Occupational safety and health Nuclear Power Plant Act, 2015 (No. 19 of 2015).

Specific categories of workers Public Servants (Marriage with Foreign Nationals) Act, 2015 (Act No. 19 of 2015).

2016

Elimination of child labour, protection of children and young persons / Employment policy, promotion of employment and employment services

Youth Welfare Fund Act, 2016 (No. 33 of 2016).

Social security (general standards) Bangladesh Tea Workers Welfare Fund Act,2016 (No. 1 of 2016).

Specific categories of workers

The Surplus Public Servants Absorption Act, 2016 (No. 3 of 2016).

Railway Security Force Act, 2016 (No. 2 of 2016)

Bangladesh Tea Workers Welfare Fund Act,2016 (No. 1 of 2016).

Note: ILO NATLEX has not registered the Bangladesh Labour Rules 2015 per March 2017. Source: ILO, NATLEX, Country Profile Bangladesh, Basic Laws

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Table 27: Ratified ILO Conventions63

Subject and/or right Convention Ratification date

Fundamental Conventions

Freedom of association and collective bargaining

C087 - Freedom of Association and Protection of the Right to Organise, 1948 1972

C098 - Right to Organise and Collective Bargaining Convention, 1949 1972

Elimination of all forms of forced labour

C029 - Forced Labour Convention, 1930 1972

C105 - Abolition of Forced Labour Convention, 1957 1972

Effective abolition of child labour

C138 - Minimum Age Convention, 1973 Not ratified

C182 - Worst Forms of Child Labour Convention, 1999 2001

Elimination of discrimination in employment

C100 - Equal Remuneration Convention, 1951 1998

C111 - Discrimination (Employment and Occupation) Convention, 1958 1972

Governance Conventions

Labour inspection C081 - Labour Inspection Convention, 1947 1972

C129 - Labour Inspection (Agriculture) Convention, 1969 Not ratified

Employment policy C122 - Employment Policy Convention, 1964 Not ratified

Tripartism C144 - Tripartite Consultation (International Labour Standards) Convention, 1976 1979

Up-to-date Conventions

Working time C014 - Weekly Rest (Industry) Convention, 1921 1972

C106 - Weekly Rest (Commerce and Offices) Convention, 1957 1972

Social Security C118 - Equality of Treatment (Social Security) Convention, 1962 1972

Specific categories of workers C149 - Nursing Personnel Convention, 1977 1972

Seafarers C185 - Seafarers' Identity Documents Convention, 2003 2014

MLC - Maritime Labour Convention, 2006 * 2014

Note: Fundamental Conventions are the eight most important ILO conventions that cover four fundamental principles and rights at work. Equivalent to basic human rights at work.

Governance Conventions are four conventions that the ILO has designated as important to building national institutions and capacities that serve to promote employment. In other words, conventions that promotes a well-regulated and well-functioning labour market.

In addition, there are 71 conventions, which ILO considers “up-to-date" and actively promotes.

* In accordance with Standard A4.5 (2) and (10), the Government has specified the following branches of social security: medical care; sickness benefit and employment injury benefit. There were Amendments of 2014 and 2016 to the MLC (2006) but they are not yet in force (March 2017).

Source: ILO, NORMLEX, Country Profiles

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Methodology and Analytical Issues, Policy Research Working

Paper 5430, 2010 56 McKinsey&Company, Bangladesh’s ready-made garments landscape: The challenge of growth, 2011 57 WTO, Bangladesh ratifies Trade Facilitation

Agreement, September 27, 2016 58 Ministry of Commerce, Regional & Multilateral Trade Agreement 59 Clean Clothes Campaign, Labour rights groups call for a review of EU-Bangladesh trade agreement following massive crackdown on workers rights, February 13, 2017 60 Dayli Sun, Draft EPZ Labour Law 2016 inconsistent with labour law, September 4, 2016 61 U.S. Department of State, Annual Country Reports on

Human Rights Practices, Bangladesh, 2016 62 ITUC, Report for the WTO General Council review of Trade policies of Republic of Bangladesh, 2012 63 ILO, NORMLEX, Country Profiles