DFDL’s Employment Practice Group is dedicated to advising clients on employment and labor issues and preparing human resources documentation that is compliant with local laws. Our employment team’s in-depth knowledge of the law and practices in the countries where we operate allows us to provide specialized, tailored, and practical advice on issues that arise in employment relationships. Our Head of the Regional Employment Practice Group is Marion Carles-Salmon, who is based in Bangkok. This legal update is to advise you on important legislation and employment issues in the region.
The Bangladesh Labour Act 2006 (the “BLA”) sets out the rights and obligations of employers, workers, trade unions, functions and the powers of the labour courts for private entities in Bangladesh. In 2018, a number of amendments were made to the BLA through the Bangladesh Labour (Amendment) Act 2018 (the “Amendment”). The Amendment provides for the following:
In Bangladesh, a separate entity called the ‘Minimum Wages Board’ is in charge of fixing the rate of minimum wages for employees in different sectors. After almost 6 years in January 2019, a new government gazette was published to increase the minimum wages of garments workers. For example, the minimum wages for a grade 7 worker were increased from BDT 5,300 to BDT 8,000 and for a grade 1 worker these have been increased from BDT 13,000 to BDT 18,257.
Furthermore, a separate set of labour legislation was published for the workers of Export Processing Zones (EPZs) in Bangladesh. The EPZ workers can now form Workers’ Welfare Associations if 20% of the workers participate (previously, the requirement was set at 30%). The service rules of the establishment must be approved by the Additional Chief Inspector who is appointed by the Government for the specific zone.
Further to the Prakas 443 on Seniority Payments (“Prakas 443”) issued by the Ministry of Labour and Vocational Training (the “MLVT”), the MLVT issued Guideline 042/19 on Payment of Back Pay of Seniority Pay prior to 2019 (the “Back Pay”) for companies outside of the Garment, Textile and Footwear Manufacturing Sectors on 22 March 2019.
The obligation on companies outside of the garment, textile and footwear manufacturing sectors to issue Back Pay has been pushed back to December 2021 and the number of days of Back Pay has been reduced from 15 days to 6 days per year, being 3 days in June and 3 days in December. During this period, if an employee is terminated for any reason other than serious misconduct, retirement or death, the employer is required to provide the entire amount of Back Pay. By contrast, an employee who resigns or is terminated due to serious misconduct is not entitled to Back Pay.
Certain issues regarding the calculation of Back Pay remain unsettled by the Guideline 042/19, such as the calculation of average daily actual wages prior to 2019, the inclusion of the probationary period in the calculation and the application of seniority payments to employees who shift from a fixed duration contract to an unfixed duration contract.
Notwithstanding the postponement of the obligation to provide Back Pay, there is no change to the payment regime of new seniority pay from 1 January 2019. Accordingly, employers outside of the garment, textile and footwear manufacturing sectors must comply with Prakas 443, meaning that the 7.5 days of new seniority pay must be paid in each of June and December (a total of 15 days per year).
1. List of Labor Related Occupational Diseases in the Lao PDR
The Minister of Labour and Social Welfare issued the Decision on Occupational Diseases (№ 3002/MLSW, 16 August 2018) which details a list of approved occupational diseases which serves as a guideline for employers and the Social Security Fund in the treatment and payment of allowances to injured employees under the Lao PDR labor laws.
Prior to issuing this Decision, the labor management authority applied the ASEAN list of occupational diseases in cases where employees instituted claims against their employer or the Social Security Fund.
The 2018 Decision applies to both the public and private sectors in the Lao PDR.
2. Draft Instruction on the Implementation of the Social Security Law
The Social Security Law (Nº 54/NA, 27 June 2018) (the “Social Security Law”) came into force on 9 January 2019, but certain provisions lacked clarity, one being the calculation of benefits.
The Ministry of Labor and Social Welfare is in the process of drafting an instruction to provide explanations and examples relating to the calculation of benefits listed in the Social Security Law, being:
As currently drafted, the instruction fails to adequately address the uncertainty surrounding the calculation for retirement benefits and the allocation of insurance points to an insured person. The current position is that the calculation will be dependent on the number of insured persons in the Lao PDR and the percentage of benefit allocated to an insured person will still be based on the periodic internal calculations and methodologies of the Social Security Fund. However, further details are not provided in the draft instruction.
The draft instruction is still under revision and comments have been requested from stakeholders. A finalised instruction is expected to be published during 2019.
On 15 March 2019, the Parliament issued the Occupational Health and Safety Law 2019 (the “OHSL”) which aims to prevent occupational health, decease and injuries by promoting health and safety in the workplace. Although passed, actual implementation of the OHSL is not expected to occur until later this year.
The OHSL notably applies to private sector companies and JV businesses involved in (or doing business in the field of) manufacturing, industrial and construction activities, mining and oil and gas, port businesses, educational services, health care, transportation and communication activities.
1. New obligations for employers
Companies carrying on the activities covered under the OHSL must register with the Factory and General Labour Laws Inspection Department (the “Department”) for occupational health and safety purposes. The OHSL also provides for the appointment by the employer of an “in-charge employee” to supervise the health and safety of workers at the workplace (the “Occupational Safety and Health Officer”). Finally, the employer must notify the Department in the event of serious workplace injuries, dangerous incidents and serious occupational accidents (as defined by the OHSL).
In accordance with the OHSL, the employer must undertake a threat assessment of the machinery and equipment used in the workplace, arrange medical check-ups of its employees to ensure that they do not suffer from occupational diseases, provide personal protective equipment and ensure that the company provides appropriate medical assistance and services to its employees (a registered doctor and nurses must be appointed when the number of employees exceeds a specific threshold).
The OHSL provides for protective measures in favor of employees, such as protection against dismissal during the period of leave (as certified by a doctor’s medical report following an injury sustained in the workplace or an occupational disease) and prohibition from work that, due to its nature, does not fit with the recommendations of the certified doctor. The employer must also take all necessary measures to prevent any negative effects on the health of pregnant and breastfeeding employees in the workplace. Finally, the OHSL provides the right for employers to limit or restrict the work of employees who are incapacitated due to their health condition.
2. Employees’ duties and responsibilities in the workplace
The OHSL lays down employees’ duties and responsibilities in the workplace, such as the obligation to promptly inform their employer or the Occupational Safety and Health Officer when they discover any condition, cause or event likely to affect health and safety in the workplace.
The Thai National Legislative Assembly approved a resolution to amend the existing Labor Protection Act (the “LPA”) on 13 December 2018. This amendment has been published in the Government Gazette on 5 April 2019 and has come into effect on 6 May 2019. It provides for the following changes:
1. Basic monthly wage increase
The basic monthly wage is currently VND 1,390,000 (approximately USD 60.50). From 1 July 2019, it will increase to VND 1,490,000 (approximately USD 64) in accordance with Resolution No. 70/2018/QH14 issued by the National Assembly on State budget estimates in 2019. The basic monthly wage increase will impact employees in private entities, as well as their pensions, health insurance, social insurance allowances, monthly allowances, lump-sum allowances upon childbirth, and funeral allowances which will be adjusted in line with the basic monthly wage increase (for instance, Vietnamese law provides that the contributions of social insurance or health insurance per month for employees to the social insurance fund must not exceed 20 times the basic monthly wage).
2. Guiding implementation for expatriates on social insurance contributions
The Ministry of Labor, Invalids and Social Affairs recently issued Official Letter No. 1064/LDTBXH-BHXH dated 18 March 2019 (the “Official Letter No. 1064“) to clarify the scope of application of compulsory social insurance schemes for foreign employees working in Vietnam (the “Expatriates”) as formerly mentioned in Decree 143/2018/ND-CP of the Government of Vietnam dated 15 October 2018.
Accordingly, the Official Letter No. 1064 clearly distinguishes when Expatriates are subject to the social insurance scheme (“SI”) and when they are not:
|Expatriates who satisfy all of the below requirements will be subject to SI:||Expatriates that will not be subject to SI:|
If you would like further information or would like to discuss these issues, please contact email@example.com.
The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.
Regional Legal Adviser