Termination and Notice Periods in Bangladesh: An HR Perspective

Understanding Notice Period Requirements

Employers operating in Bangladesh must adhere to specific notice period regulations when terminating employment contracts. The Bangladesh Labor Act establishes clear guidelines that vary depending on employee classification and compensation structure.

For permanent employees, the required notice periods are:

120 days for monthly-paid employees
60 days for other employee categories

Temporary employees follow different guidelines:

30 days for monthly-paid temporary staff
14 days for other temporary workers

Employers have the option to provide payment in lieu of notice, which must equal the wages the employee would have earned during the notice period. This flexibility can be particularly useful in restructuring scenarios or when immediate termination is necessary.

Severance Pay Calculations

Bangladeshi labor law mandates specific severance payments for terminated employees. The calculation methodology differs between permanent and temporary workers.

Permanent employees are entitled to compensation equivalent to 30 days' wages for each completed year of service, or any gratuity amount specified in their employment contract, whichever is higher. This ensures long-serving employees receive appropriate recognition for their tenure.

Temporary workers receive severance based on their employment agreement terms, particularly when termination occurs for reasons other than project completion. Companies like SailGlobal often help multinational organizations navigate these complex calculations to ensure compliance.

Termination Process Best Practices

A structured termination process minimizes legal risks and maintains professional standards. The recommended approach includes:

Documenting valid termination reasons aligned with labor law provisions
Providing written notice with clear termination details and effective date
Completing all administrative paperwork thoroughly
Settling final payments including outstanding wages and accrued benefits
Calculating and disbursing severance payments according to service duration

International companies frequently partner with local experts like SailGlobal to manage these processes efficiently while maintaining compliance with Bangladesh's evolving labor regulations.

Unemployment Benefits Landscape

Bangladesh currently lacks a formal unemployment insurance system. Unlike many Western countries, there's no government-provided safety net for unemployed workers. Employees must rely on severance payments, personal savings, or family support during job transitions.

This absence of state-sponsored unemployment benefits makes proper severance calculation critically important. Employers bear full responsibility for providing adequate termination compensation, making compliance with labor law essential for ethical business practices.

Companies expanding into Bangladesh should consider these factors when developing their HR policies and termination procedures.

Bangladesh Termination Laws: Notice Periods & Severance Pay Guide 2024