TRW & Co · Employment and labour law
EPZ Labour Act 2019: Key Rules for Employers and Workers
The EPZ Labour Act 2019 governs every enterprise in a BEPZA zone, including the Chattogram and Karnaphuli EPZs, and overrides the ordinary Labour Act there. It sets its own notice periods, benefits, leave and wage rules, allows one Workers' Welfare Association per enterprise instead of trade unions, and sends disputes through BEPZA conciliation to the EPZ Labour Court.
Key pointThe 2025 and 2026 reforms of the national Labour Act did not amend the EPZ Labour Act 2019, so zone and mainland rules now differ more than before. Templates updated for the mainland in 2026 should not be used inside CEPZ or KEPZ.
At a glance
Overriding effect
Section 3 gives the Act effect notwithstanding any other law, so it, not the Labour Act 2006, governs workers and employers in BEPZA zones.
Welfare associations
One association per company in a zone, needing 20 per cent of permanent workers to apply and to join, with registration by BEPZA's Executive Chairman.
Notice to terminate
120 days for permanent workers and 60 days for others, or wages in lieu, plus 30 days' wages per completed year for permanent workers.
Dispute route
Negotiation, then a BEPZA conciliator, then arbitration or strike notice, with the EPZ Labour Court and Appellate Tribunal deciding cases and appeals.
Grievance deadline
Under section 28 a worker must send a written complaint by registered post within thirty days of being informed of the cause.
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The EPZ Labour Act 2019 is the separate labour code for every enterprise inside a zone run by the Bangladesh Export Processing Zones Authority (BEPZA), including the Chattogram EPZ and the Karnaphuli EPZ. It replaces the ordinary Labour Act for most purposes, with its own rules on service, wages, workers' welfare associations, conciliation and a dedicated EPZ Labour Court. This guide sets out the key rules for employers and workers in 2026.
The short answer
If a factory sits inside a BEPZA zone, its workers and employer are governed by the Bangladesh EPZ Labour Act 2019, not the Bangladesh Labour Act 2006. Section 3 gives the EPZ Labour Act 2019 overriding effect over any other law. BEPZA, through its Executive Chairman and its labour and industrial relations officers, is responsible for implementing it.
Many service conditions mirror the mainland code, but the institutions are different. Workers organise through one Workers' Welfare Association per enterprise rather than trade unions; collective disputes go through BEPZA conciliators and arbitrators; and individual and collective cases go to the EPZ Labour Court, with appeals to the EPZ Labour Appellate Tribunal. The 2025 and 2026 reforms of the national Labour Act did not amend the EPZ Labour Act 2019.
The legal framework and who it covers
The Act is Act No. II of 2019, published in the Bangladesh Gazette on 28 February 2019. It repealed the EPZ Workers' Welfare Association and Industrial Relations Act 2010 and the short-lived EPZ Labour Ordinance of early 2019. An authentic English text was published by notification, S.R.O. No. 257-Law/2021, on 27 July 2021; where the Bangla and English texts conflict, the Bangla text prevails. BEPZA reproduces the Act in its Information for Investors compilation.
Section 1 applies the Act to the workers and employers of all industries in EPZs or zones under BEPZA, including the Chattogram EPZ. "Zone" is defined widely to include any EPZ, area or economic zone established and regulated under BEPZA, which is why BEPZA Economic Zone at Mirsharai is also relevant. Economic zones run by other authorities generally follow the national Labour Act 2006 unless a specific exemption applies.
Who enforces it
Section 167 makes BEPZA responsible for implementing the Act and for all matters relating to workers' rights and industrial relations in the zones. Its Executive Director (Labour and Industrial Relations) supervises welfare association elections and can act as an arbitrator. Inspection is carried out by BEPZA's Inspector General and Additional Inspectors General, and inspectors of the Department of Inspection for Factories and Establishments may inspect with the Executive Chairman's permission.
Reform status in 2026
The national Labour Act was amended by ordinance in November 2025 and by an Act of Parliament in April 2026, with new union thresholds, longer maternity leave and graded resignation benefits. Those changes did not extend to the zones. The EPZ Labour Act 2019 therefore still contains its original figures, and foreign buyers and international bodies continue to press for full freedom of association in the zones. Check for further amendment before relying on any figure.
Service conditions under the EPZ Labour Act 2019
Chapter II sets the floor for every zone employer. An enterprise may have its own service rules, but they cannot be less favourable than the Act and have no effect until approved by BEPZA's Additional Inspector General, who must decide within six months. An aggrieved party can appeal to the Executive Chairman within thirty days.
- Classes and probation. Workers are apprentices, casual, temporary, probationers or permanent. Probation is six months for clerical work and three months for others, extendable once by three months.
- Documents. Every worker must receive an appointment letter and a photo identity card, and the employer must keep a service book and a worker register.
- Wages. The wage period cannot exceed one month, and wages must be paid within seven working days after it ends.
- Hours. Ordinarily eight hours a day and forty-eight a week, with overtime allowing up to ten hours a day and sixty hours a week, averaging no more than fifty-six a week over a year.
- Leave. Ten days' casual leave, fourteen days' sick leave, earned leave at one day for every eighteen days worked after a year's service, and eleven days' festival holiday a year.
- Maternity. Eight weeks before and eight weeks after delivery for a worker with at least six months' service, subject to the Act's limit on the number of surviving children.
- Group insurance. Compulsory where at least twenty-five permanent workers are employed, with death claims to be settled jointly by insurer and employer within 120 days.
Injury compensation follows a schedule that mirrors the mainland figures: Tk 2,00,000 for death and Tk 2,50,000 for permanent total disablement, with monthly payments for temporary disablement, and claims within two years. Our article on workplace injury compensation explains how such claims work.
Keep a single file per worker that BEPZA, buyers' auditors and the EPZ Labour Court would all accept: approved service rules, appointment letter, ID card record, service book, attendance and wage sheets with payment proof, and any disciplinary papers. Zone disputes are decided on records, and gaps are usually read against the employer.
Ending employment: notice and benefits compared
Exit rules are where zone and mainland employers most often confuse the two codes. The table compares the EPZ Labour Act 2019 with the Labour Act 2006 as amended.
| Issue | EPZ Labour Act 2019 | Labour Act 2006 (amended) |
|---|---|---|
| Termination by employer | 120 days' notice for permanent workers, 60 days for others, or wages in lieu; 30 days' wages per completed year for permanent workers | 120 days (monthly-rated) or 60 days (others) for permanent workers; 30 days' wages per year or gratuity if higher |
| Group terminations | Consult the zone's Additional Inspector General before terminating ten or more workers at a time | Retrenchment notices copied to the Inspector General and any CBA |
| Retrenchment | Inform BEPZA; one month's notice or wages in lieu; 30 days' wages per year of service | One month's notice; 30 days' wages per year or gratuity if higher |
| Resignation notice | 30 days (permanent), 15 days (others) | 60 days (permanent) |
| Resignation benefit | 15 days' wages per year at five to under ten years; 30 days at ten to under twenty-five years | 7, 15 or 30 days' wages per year depending on service |
| Retirement | At 60, or voluntarily after 25 years' service with 30 days' notice; 45 days' wages per completed year | At 60; dues under section 26(4) or service rules |
| Death in service | After more than one year: 30 days' wages per year, or 45 days if death at work or after a workplace accident | After one year (amended): same rates, or gratuity if higher |
Dismissal for misconduct is governed by section 21, which leaves the list of misconduct, penalties and inquiry method to regulations. Suspension pending inquiry cannot exceed sixty days unless the matter is before the EPZ Labour Court, and the worker receives half average wages as subsistence allowance plus other allowances in full. Our EPZ labour lawyers review discipline and exit files against both the Act and the regulations.
Workers' Welfare Associations and collective bargaining
Chapter IX gives zone workers the right to form and join a Workers' Welfare Association. It is the zone counterpart of a trade union, with tighter rules.
- At least 20 per cent of the permanent workers must apply, with signatures or thumb impressions, to BEPZA's Executive Director (Labour and Industrial Relations).
- Registration requires that 20 per cent of permanent workers become members; the Executive Chairman must decide within sixty days, and refusal or delay can be taken to the EPZ Labour Court.
- There is one association per company in a zone, with several units of the same company treated as one.
- At least 30 per cent of executive council posts are filled from permanent women workers where women are employed, and the council serves a three-year term.
- The elected representatives are the collective bargaining agent and may negotiate wages, hours and other terms.
- Funding from outside the zone needs the Executive Chairman's prior approval.
Section 115 lists unfair practices by employers, including dismissing, discharging or threatening a worker for joining or promoting an association, or inducing workers to leave one. Discrimination against workers who apply to form an association is itself an unfair practice.
Grievances, conciliation and the EPZ Labour Court
Individual and collective disputes follow different paths, and both run on short deadlines. The usual sequence is:
- Individual grievance. Under section 28, a worker who has been laid off, retrenched, discharged, dismissed, removed or terminated, or has any complaint under Chapter II, sends a written complaint by registered post within thirty days of being informed of the cause; inquiry and settlement follow the regulations.
- Collective negotiation. Where a dispute is likely, the employer or the bargaining agent writes to the other side, which must arrange a meeting within fifteen days; any settlement is recorded and copied to the Executive Chairman and the Conciliator.
- Conciliation. If negotiation fails, either side asks the BEPZA-appointed Conciliator to conciliate.
- Strike or lock-out notice. If conciliation fails within fifteen days, thirty days' notice may be served; a strike notice needs the consent of two-thirds of the executive council by secret ballot.
- Arbitration. The Conciliator tries to persuade the parties to refer the dispute to an arbitrator, whose award is due within thirty days and is final.
- EPZ Labour Court. Any bargaining agent, employer or worker may apply to enforce a right under the Act, a settlement or an award, and prohibited strikes are referred to the court.
- Appeal. Appeals against an award go to the EPZ Labour Appellate Tribunal within thirty days of delivery; its decision is final.
The EPZ Labour Court is chaired by a sitting District Judge or Additional District Judge with employer and worker representatives, sitting alone in wage and compensation matters. The Act directs it to deliver an award within twenty-five days of filing unless the parties agree to more time, and the Appellate Tribunal, a single present or former High Court Division judge, to decide appeals within forty days. Until a dedicated EPZ court is set up for an area, section 137 deems the ordinary Labour Court and Labour Appellate Tribunal to act for the zones.
Strikes and lock-outs are barred for three years after a new enterprise starts production, with arbitration binding instead. Questions of jurisdiction or legality can reach the High Court Division by writ. Workers who are unsure whether to use section 28 or the mainland section 33 grievance procedure should check the workplace address against BEPZA's zone list first.
An illustrative scenario
This scenario is illustrative only; the enterprise and figures are hypothetical.
A foreign-owned accessories maker in a Chattogram zone loses a major order and plans to cut fifteen of its 300 workers. Head office sends a separation template drafted for a mainland Bangladeshi subsidiary, citing the Labour Act 2006 and the sixty-day resignation notice.
Local counsel flags three problems. The EPZ Labour Act 2019 applies, not the mainland Act. Because ten or more workers will go at once, the employer must consult the zone's Additional Inspector General before terminating, and retrenchment must be reported to BEPZA. And the compensation must be calculated under the EPZ figures, with the welfare association informed so that the plan does not trigger unrest. The company revises the letters, consults BEPZA, funds the settlements in advance and completes the exits without a dispute.
Risks and common mistakes
Using mainland templates inside a zone
Group HR teams often apply Labour Act 2006 letters, notice periods and grievance wording in an EPZ unit. Many terms look similar, but notice for resignation, resignation benefits, retirement compensation and the dispute forum differ. Letters that cite the wrong statute confuse workers and weaken the employer's position before BEPZA and the court. Keep separate templates for zone and mainland units, and review them whenever either law changes, which in 2025 and 2026 meant the mainland templates changed while the EPZ ones did not.
Mass exits without BEPZA engagement
Order losses and buyer exits can force lay-offs, retrenchment or closure. Section 22(4) requires consultation with the zone's Additional Inspector General before ten or more workers are terminated at a time, and retrenchment must be notified to BEPZA. Announcing cuts before calculations, funding and consultation are in place is the most common cause of unrest. Plan the legal basis, the payments and the communication together, and involve the welfare association early. Our BEPZA practice coordinates the regulatory side.
Interfering with a welfare association
Section 115 treats dismissing, threatening or discriminating against workers for association activity, and inducing them to leave, as unfair practices that can lead to penalties. Buyer audits and international monitors watch this closely. Once an association is registered, treat it as the bargaining agent, answer its demands in writing and keep minutes of meetings. Where a worker who holds association office faces discipline, document the conduct carefully and apply the same standards used for others.
Unapproved service rules
Service rules have no effect until BEPZA's Additional Inspector General approves them. Enterprises that rely on a handbook that was never approved may find that disciplinary provisions, leave rules or allowances cannot be enforced, while the statutory minimum still applies. Submit the rules, keep the approval on file, and re-submit material changes. Employers acquiring a zone enterprise should check this in due diligence, because unapproved rules are a common hidden liability.
Workers missing the thirty-day grievance window
The section 28 period starts when the worker is informed of the cause, not when talks fail. Workers are often promised payment later, and by the time the promise is broken the window has closed. Send the written complaint by registered post within thirty days and keep the receipt, even while negotiations continue. A worker can still settle after sending a grievance; the reverse is often impossible.
Foreign investors and buyers
Most enterprises in the Chattogram zones are foreign-owned or joint ventures, with decisions taken in China, Korea, Japan, Hong Kong, Europe or the Gulf. Head-office instructions on restructuring, wage policy or discipline need to be translated into steps that work under the EPZ Labour Act 2019 and that BEPZA will accept. Buyers' codes of conduct and European due diligence rules also scrutinise freedom of association, wages and grievance handling in the zones, so the same records should satisfy both BEPZA and auditors.
TRW & Co's offices in Dhaka, Singapore, Dubai and London help foreign owners with board approvals, group policy and investor reporting, while our Chattogram team handles BEPZA, the welfare association and the EPZ Labour Court. For zone set-up and leases, see our Chittagong EPZ and Karnaphuli EPZ pages.
Checklist for zone employers and workers
- Confirm the enterprise is inside a BEPZA zone, so the EPZ Labour Act 2019 applies.
- Obtain BEPZA approval of service rules and keep it on file.
- Issue appointment letters and photo ID cards, and keep service books and registers.
- Pay wages within seven working days of the wage period and keep payment proof.
- Use EPZ templates for discipline, exits and settlements, not mainland ones.
- Consult the Additional Inspector General before terminating ten or more workers at a time.
- Respect the welfare association's role and answer demands in writing.
- Workers: send any grievance by registered post within thirty days and keep the receipt.
The firm's Bangladesh advocates appear before the EPZ Labour Court, the Appellate Tribunal and the High Court Division. For mainland matters see our labour and employment practice, or visit the Chattogram office hub at Room 4022, Annex 2, District and Sessions Judge Court Building, Court Hill (Porir Pahar), Kotwali, Chattogram 4000. For advice on the EPZ Labour Act 2019, contact us, email info@trw.co or call +880 1779 127165.
Frequently asked questions
01Does the Bangladesh Labour Act 2006 apply inside CEPZ and KEPZ?
For most purposes, no. The EPZ Labour Act 2019 applies to the workers and employers of all industries in zones under BEPZA, and section 3 gives it effect notwithstanding any other law. Many service conditions are similar, but notice periods, resignation benefits, worker representation and dispute forums differ. Economic zones run by other authorities generally follow the national Labour Act unless an exemption applies.
02Can EPZ workers form a trade union?
Not under the current Act. Workers may form a Workers' Welfare Association, one per company in a zone, which acts as the collective bargaining agent. At least 20 per cent of permanent workers must apply, and 20 per cent must be members for registration by BEPZA's Executive Chairman. The national Labour Act reforms of 2025 and 2026 did not extend trade union rights to the zones.
03How much notice must an EPZ employer give to terminate a worker?
Section 22 requires 120 days' written notice for a permanent worker and 60 days for other workers, or wages for the notice period in lieu. A permanent worker also receives compensation of thirty days' wages for each completed year of service, in addition to other benefits. Where ten or more workers are terminated at a time, the employer must first consult the zone's Additional Inspector General.
04What benefits does an EPZ worker get on resignation?
A permanent worker resigns by giving thirty days' notice, and other workers fifteen days, or pays wages in lieu. Under section 23, a permanent worker with five to under ten years' continuous service receives fifteen days' wages per completed year, and one with ten to under twenty-five years receives thirty days' wages per completed year, in addition to other benefits. The 2026 mainland resignation tiers do not apply.
05Where are EPZ labour disputes decided?
Collective disputes go first to negotiation, then to a BEPZA-appointed Conciliator, then to arbitration or a strike or lock-out notice. Cases and enforcement applications go to the EPZ Labour Court, chaired by a District Judge or Additional District Judge, with appeals to the EPZ Labour Appellate Tribunal within thirty days. Until a dedicated EPZ court is established for an area, the ordinary Labour Court acts in its place.
06Are EPZ workers entitled to compensation for workplace injuries?
Yes. Chapter VIII makes the employer liable for injury by accident arising out of employment, with a Fifth Schedule fixing Tk 2,00,000 for death and Tk 2,50,000 for permanent total disablement, and monthly payments for temporary disablement. Claims must be made within two years. Enterprises with at least twenty-five permanent workers must also carry group insurance, payable in addition to other dues.
Sources and official materials
- BEPZA: Information for Investors — Includes the Bangladesh EPZ Labour Act 2019 (Act No. II of 2019)
- Bangladesh Export Processing Zones Authority — Regulator implementing the Act in the zones
- BEPZA: Chattogram EPZ — The zone in South Halishahar, Chattogram
- Bangladesh Labour Act 2006 — Mainland labour code for comparison
- Department of Inspection for Factories and Establishments — Inspectors who may inspect zone industries with permission
- Supreme Court of Bangladesh — High Court Division writ jurisdiction
General information only, current as at 2 November 2026. It is not legal advice and does not create an advocate–client relationship. It reflects the law of Bangladesh unless stated otherwise, and the law, court practice and official fees change frequently. Check current official sources and take advice on the facts of your matter.
