Dispute Settlement in Bangladesh (PDF)

1 DISPUTE SETTLEMENT Chapter SIX  Individual and industrial disputes, definition 2  The Labour Act 2006 foresees that a worker can raise a dispute before the Labour Court on the ground of violation of any right conferred by the Bangladesh Labour Act 2006  Th...

1 DISPUTE SETTLEMENT Chapter SIX  Individual and industrial disputes, definition 2  The Labour Act 2006 foresees that a worker can raise a dispute before the Labour Court on the ground of violation of any right conferred by the Bangladesh Labour Act 2006  There is no alternative mechanism for settlement of individual disputes other than by the intervention of the Court.  Individual disputes cannot be taken to court by the CBA as industrial disputes.  Although this issue has been raised several times before the Supreme Court of Bangladesh the Court has made it clear that individual disputes cannot be entertained by the Labour Court as an industrial dispute.  According to the Labour Act, no industrial dispute shall be deemed to exist unless it has been raised by an employer or a collective bargaining agent in accordance with the provisions of chapter 14 of the Act  No differentiation is made between rights’ dispute and interest dispute; both are considered as dispute under law.  Both rights dispute and interest dispute can be taken to the Labour Court under this legislation.  Dispute Settlement Machinery of the State 3  The idea underlying the provisions of the Bangladesh Labour Act, 2006 is to settle industrial dispute and to promote industrial peace and establish a harmonious and cordial relationship between labour and capital by means of conciliation, mediation and adjudication.  With this end in view different authorities under this Act have been set up to resolve an industrial dispute  The Act has been streamlined for some non-adjudicatory as well as adjudicatory authorities.  Non-adjudicatory includes participation committee, conciliator and arbitrator, while adjudicatory (judicial) authorities include Labour Court, Labour Appellate Tribunal etc.  The state provides machinery for the settlement of disputes which starts with conciliation and ends up with provision for the adjudication by court.  Bipartite negotiation and conciliation are two important methods of settlement of industrial disputes because they provide grounds for amicable settlement in a free and unfettered environment  As a third party the conciliators try to help the conflicting parties resolve their disputes amicably and restore good relationship between the disputants.  In essence, bipartite negotiation and conciliation are complementary to each other and can, if successfully used, provide a solid foundation to industrial relations  In Bangladesh the relevant law provides dispute settlement machinery which is discussed below at length.  Bipartite Negotiation 4  Bipartite negotiation as a means to prevent and solve disputes helps develop harmonious relationship between the management and workers.  The scope of bipartite negotiation has been expanding with the growth of industrialization in general and trade unionism in particular.  Bipartite negotiation takes place between the employers and their employees over job– related affairs.  The employees are usually represented by their elected representatives who form the CBAs, while the employers are allowed to participate in collective bargaining themselves or through their representative.  The legal provisions relating to the process of bipartite negotiation need a brief discussion here  A trade union, which is elected as CBA, can raise a dispute in writing and place it before the management for settlement through negotiation.  Similarly the employers can also raise a dispute and place it before the CBA for negotiation  Bipartite negotiation starts within 15 days of submitting a written demand from either party  It has to be completed within 30 days after first meeting 5  If bargaining is successful, a memorandum of settlement is recorded in writing and signed by both the parties and a copy thereof is forwarded to the Government, Director of Labour and conciliator  It has been reported that though the law provides a favourable environment for bipartite negotiation, the scenario is different in practice.  Bipartite negotiation is not so successful as is desired by the legislature in incorporating such mechanism for settlement of dispute.  Unfavorable and authoritarian attitude of management towards trade unionism, bribing trade union leaders, lack of experience and leadership skill in trade union officers, interference of the government and the ruling party in the settlement of industrial dispute, multiplicity of trade unions having political rivalries, low level of class consciousness among workers as well as trade union leaders, inefficiency in applying bargaining techniques etc. are the main reason for making bipartite negotiation as useless tools in the settlement of industrial dispute in Bangladesh.  Conciliation-Tripartite Negotiation 6  Conciliation in industrial dispute becomes necessary mainly when the settlement of disputes fail at the bipartite negotiation level.  In fact conciliation can be taken as an extension of the function of collective bargaining or simply as “assisted collective bargaining” in which the conflicting parties can have a fair chance of settlement of industrial disputes through the services of expert negotiators.  If bipartite negotiation fails, any of the parties concerned may request the conciliator in writing, to conciliate the dispute within 15 days from the date of the failure of collective bargaining  The practice of conciliation is compulsory in Bangladesh before resorting to industrial action.  The role of the conciliator is to suggest solutions that can help find a compromise between workers and the management, but can not impose a solution.  The success of conciliation depends on the willingness of the two sides to resolve their differences.  Conciliation-Tripartite Negotiation 7  If a settlement of the dispute is arrived at in the course of conciliation, the conciliator shall send a report thereof to the Government together with a memorandum of settlement signed by the parties to the dispute  If the conciliation fails, the conciliator shall try to persuade the parties to agree to refer the dispute to an Arbitrator for settlement  If the parties do not agree to refer the dispute to an Arbitrator for settlement, the Conciliator shall, within three days of the failure of the conciliation proceedings, gives a certificate thereof to the parties  The conciliation proceedings may continue for more than 30 days if the parties agree  The Director of Labour may, at any time, carry on with conciliation proceedings, withdraw the same from a conciliator or transfer the same to any other conciliator, and the other provisions of this section shall apply thereto  Statistics show that in the period from 1990 to 2004 an average of 310 disputes was taken up for conciliation annually, of which 22.48 per cent were successful and 48.06 per cent failed  In fact, conciliation has become a weak machinery in settlement of disputes  Conciliation-Tripartite Negotiation 8  Trade union leaders and officials in the Department of Labour indicated the following shortcomings in the process which prevent the parties from reaching at an agreement: i. Employers do not honour the compromise formula suggested by the conciliator because the law does not compel them to do so. ii. Direct linkage of the employers with the vested quarters as well as the government and the ruling party. iii. Partiality of the conciliator either in favour of the employers or influenced by the labour front backed by the ruling party. iv. Incompetence of the conciliator to persuade the disputants to reach an agreement. v. Tendency to bribe trade union leaders during conciliation. vi. Absence of mutual respect and patience between the parties involved. vii. Tendency among employers to take chance in the Labour Court. viii. Poor accountability of conciliation officers. ix. Financial inability of employer to meet workers’ demands. x. Showing of muscle power by trade union leaders during conciliation. xi. Irrational charter of demands by CBA.  Arbitration 9  Arbitration is a voluntary process for the settlement of industrial dispute  When conciliation fails, arbitration may prove to be a satisfactory and most enlightened method of resolving industrial dispute  The legal provisions relating to the process of collective beginning need a brief discussion here  If the conciliation fails, the conciliator tries to persuade the parties to refer their dispute to an arbitrator  If the parties agree to refer the dispute to an arbitrator for settlement, they make a joint request in writing to the arbitrator agreed upon by them.  The arbitrator shall give his award within a period of thirty days from the date on which the dispute is referred to him or such further period as may be agreed upon by the parties to the dispute.  After he has made an award, the arbitrator shall forward a copy thereof to the parties and to the Government.  The award of the arbitrator is final and no appeal shall lie against it. An award shall be valid for a period not exceeding two years, as may be fixed by the arbitrator.  In practice no dispute is referred to the Arbitrator due to the fact that either the dispute is settled at the time of conciliation or in failure the parties feel interested to go to the Labour Court rather going for arbitration  Right to strike or lock-out 10  In case of failure of conciliation, the party which has raised an industrial dispute may, within fifteen days from the date of the receipt of a certificate of failure under section 210(11), serve on a notice of strike or lock-out to the other party.  However, the CBA, before serving any such notice, has to obtain the consent of three-fourths ( 75 per cent) of its members through a secret ballot specifically held for the purpose of obtaining their consent over the strike action.  The secret ballot has to be conducted by ballot committee formed by the CBA.  Examination/verification of the records relating to secret ballot is done by the conciliator.  The Bangladesh Labour Act 2006 not only recognized the right to strike and lock but also put some limitations, namely, a) No party can serve a notice of strike or lockout while conciliation is taking place or during the proceeding before the Labour Court or Labour Appellate Tribunal. b) The Labour Court and the Labour Appellate Tribunal has the right to prohibit any strike or lockout during pendency of any proceeding before it. c) If a strike or lock-out lasts for more than 30 days, the Government may, by order in writing, prohibit the strike or lock-out. But the Government may prohibit a strike or lock-out at any time before the expiry of thirty days if it causing serious hardship to the community or is prejudicial to the national interest. d) In the case of any of the public utility services the Government may, by order in writing, prohibit a strike or lock-out at any time either before or after the commencement of a strike or lock-out.  Right to strike or lock-out 11  If the strike does not follow the above procedures, it can be considered an illegal strike or lock-out and in that case the liable worker or employer shall be punished with imprisonment for a term which may be extended to one year or with fine which may extend to five thousand taka  Data reveals that an annual average of four strikes or lock-outs were declared during the period of 1990-2004 due to failure of conciliation, involving on average 14,048 workers and production loss of Tk 30,173,300/-.  The Adjudication system 12  After the stages of bipartite negotiation and conciliation are exhausted, the disputant parties may resort to settling their dispute by referring it to the arbitrator or by a strike action or lock-out as discussed above or through the Labour Court.  An industrial dispute may be referred to the labour court in any of the following ways: i. If no settlement is arrived by way of conciliation and the parties agree not to refer the dispute to an arbitrator, the work man may go on strike or the employer may declare lock-out. However, the parties at dispute may, either before or after the commencement of a strike or lock-out, may give an application to the Labour Court for the adjudication of the matter. ii. If a strike or lock-out lasts more than 30 days the Government may prohibit such strike or lock-out and in that case the government must refer the dispute to the Labour Court. Any collective bargaining agent or any employer or workman may apply to the Labour Court for the enforcement of any right guaranteed or secured to it or him by or under any law or any award or settlement. iii. Any individual worker including a person who has been dismissed, retrenched, laid-off or otherwise removed from employment can make a complaint to the Labour Court on failure of the employer to perform his obligation in that behalf iv. The worker himself or his legal heir in case he dies or any legal representative may apply to the Labour Court for a payment on the ground that an amount from such payment has been deducted from the wages in contravention of the provision of the law or that any payment of wages has not been made or delayed or that under any rule the payment of any gratuity or provident fund is delayed. v. On rejection of the application for registration of Trade Union by the Director of Labour or after settlement of objection disposal such application is delayed by the Labour Director beyond the period of sixty days, the applicant Trade Union within thirty days from the date of such rejection or from the date of the expiry of the said time limit may appeal to the Labor Court. vi. If the Director of Labour is satisfied after investigation that the registration of a trade union should be cancelled, he shall submit an application to the Labour Court praying for permission to cancel such registration.  The Adjudication system 13  The Labour Court is constituted with a Chairman and two Members to advise him, however, in the case of trial of an offence or adjudication of any matter under Chapters Ten and Twelve it shall consist of the Chairman alone  The Members of the Labour Court are appointed by the Government in prescribed manner and to be the Chairman of the Labour Court a person is to be the sitting District Judge or Additional District Judge.  While trying an offence the Labour Court shall administer its proceedings without its members.  The Labour Court has the power to dismiss the case or to decide the same ex-parte.  The award, decision or judgment of the Labour Court shall be delivered, unless the parties to the dispute give their consent in writing to extend the time-limit, within sixty days following the date of filing of the case, provided that the delay of its delivery shall not invalidate the award, decision or judgment  An award, decision or judgment of Labour Court shall be given in writing and delivered in open Court and a copy thereof shall be forwarded to each of the parties.  Any party aggrieved by an award, decision or judgment of the Labour Court may prefer an appeal to the Labour Appellate Tribunal within sixty days of the delivery thereof and the decision of the Tribunal in such appeal shall be final.  Data reveals that an annual average of 5,668 cases were filed during the period of 1990-2006 of which 35.37 per cent cases were disposed of during the year and 64.63 per cent cases remained pending at the end of the year.  The Adjudication system 14  About 50per cent of the cases took a time period ranging between 12 months and 36 months.  The time required for 25per cent of the cases ranged between three years and five years  About 8 per cent of the cases took more than five years.  The average time taken to decide the cases by the First Labour Court and the Second Labour Court of Dhaka was more than 17.5 months and 31 months respectively.  The reasons behind the backlog of cases in the Labour Courts are as follows: Inadequacy of Courts for dealing with labour disputes There are huge cases under different laws specially under section 114 of the Code Criminal Procedure and Immigration Ordinance which create unnecessary backlog of cases The Judges of the Labour Court usually do not have any prior experience in dealing with labour issues The absence of members cause unnecessary delay in disposing of the case The practicing lawyers of the Labour Court are habituated in filing frequent time petitions which create unreasonable delay in disposing of the case Lack of logistic support of the Labour Court.  The Adjudication system 15  The Labour Court is the pioneer adjudication body in settling labour disputes  But Chairman of the Labour Court is appointed from the District Judge or Additional District Judge, and does not have specific training on labour laws.  Similarly, Judges of the Labour Courts do not have any experience in dealing with labour issues but are often appointed under political pressure of the ruling party and not based on qualifications or standardized recruitment procedures.  Remuneration of the members is very poor leading to disinterest in attending the Court.  The practicing lawyers of the Labour Court submit frequent time petitions which create unreasonable delay in disposing of the case.  Adjudication by Labour Appellate Tribunal 16  The Labour Appellate Tribunal has the power to hear or dispose appeals from the Labour Court  It consists of a Chairman or if the Government deems fit, of Chairman and such number of Members as determined by the Government.  The Chairman shall be a former Judge or Additional Judge of the Supreme Court and any Member thereof shall have been a Judge or an Additional Judge of the Supreme Court or is or has been a District Judge for at least three years.  The Labour Appellate Tribunal on appeal may set aside, vary or modify any award decision in judgment or sentence given by the Labour Court or send the case back to the Court for rehearing; and shall exercise all the powers conferred by the Code on the Labour Court.  The judgment of the Tribunal shall be delivered within a period of not more than 60 days following the filing of the appeal  From the data it is revealed that an annual average of 278 appeals were filed for disposal during the period 1990-2006 of which 33.45per cent appeals were disposed of during the year and 66.55per cent appeals were pending at the end of the year.  Adjudication by Labour Appellate Tribunal 17  The mains reasons behind the backlog of cases in the Labour Appellate are that there is insufficiency of Benches of Appellate Tribunal  At present only two Benches exist which are not sufficient to deal with the huge volume of appeals from around the country  But according to law the Government is empowered to appoint as many as members as required for the Labour Appellate Tribunal with whom several Benches can be created for smooth functioning of the activities of the Labour Appellate Tribunal.  Apart from this limitation the Labour Appellate Tribunal also suffers from lack of sufficient logistics support i.e. building, court room, manpower etc.  High Court Division of the Supreme Court of Bangladesh 18  Even though the Labour Court has been entrusted with the exclusive jurisdiction in respect of deciding labour issues, the aggrieved person can invoke the jurisdiction of the High Court Division on the ground that the matter in question leads to the violation of fundamental rights and that there is no other efficacious remedy in the matter  Before enactment of the Bangladesh Labour Act, 2006, there was no scope of appeal against the decision of the Labour Court to Labour Appellate Tribunal and the right to appeal could be exercised only in the case of award of a Labour Court.  It was only way to invoke the writ jurisdiction of the High Court Division of the Supreme Court for challenging a decision passed by the Labour Court.  But now by the Bangladesh Labour Act, 2006 every decision passed by the Labour Court is appealable before the Labour Appellate Tribunal.  In spite of this the jurisdiction of the High Court Division can only be invoked on the grounds of violation of fundamental rights or any procedural error committed by the Labour Court.  Role of labour administration in dispute settlement 19  Under the Bangladesh Labour Act, 2006 the Labour Administration has been entrusted to play a key role in industrial dispute in the manner specified below: i. The Director of Labour or any person under his authority may play the role of conciliator ii. The Director of Labour shall have the power to file complaint before the Labour Court for any unfair offence or unfair labour practice or for contravention of any provisions of Chapter Thirteen in respect of Trade Union and Industrial Relations iii. The Director of Labour in the interest of the settlement of dispute may himself proceed with conciliation proceedings withdrawing the same from a Conciliator or transfer the same to any other Conciliation iv. The Bangladesh Labour Act, 2006 empowered the Government to appoint as many persons as it considers necessary to be conciliation for the purpose of settlement of industrial dispute and may classify them in reference to type of establishment, territorial area etc. v. The Labour Court and the Labour Appellate Tribunal being adjudicatory bodies of the Labour Administration play a key role in dispute settlement. In this regard the Labour Court has been entrusted with the exclusive jurisdiction on the following matters a) To adjudicate and determine an industrial dispute which has been referred to or brought before it under this Code; b) To enquire into and adjudicate any matter relating to the implementation or violation of a settlement which is referred to it by the Government; c) To try offences under the Bangladesh Labour Act, 2006;  Role of labour administration in dispute settlement 20 vi. A Labour Court is vested with the powers the Court of a Magistrate of the First Class under the Code of Criminal Procedure. But for the purpose of inflicting punishment, it shall have the same powers as are vested in Court of Sessions vii. For the purpose of adjudicating and determining any matter, question or dispute except any offence the Labour Court shall be deemed to be a Civil Court and shall have the same powers as are vested in such Court under the Code of Civil Procedure including the powers of: a) enforcing the attendance of any person and examining him on oath; b) compelling the production of documents and material objects; c) issuing commissions for the examination of witnesses or documents; d) delivering ex parte decision in the event of failure of any party to appear before the court; e) setting aside ex parte decision; f) setting aside the order of dismissal of a suit given in the event of failure of any party to appear before the Court; g) so that the purpose of the case is not frustrated, the court may issue injunction against any party in the case  Role of labour administration in dispute settlement 21 viii. The Labour Court is empowered to prohibit the continuance of any strike or lock-out in pursuance of any industrial dispute in respect of which such dispute is pending before the Labour Court for adjudication ix. The Labour Appellate Tribunal may, on appeal, confirm, set aside, vary or modify any award, decision, judgment or sentence given by the Labour Court or send the case back to the Court for rehearing; and shall exercise all the powers conferred by this Code on the Labour Court x. The Tribunal shall have authority to punish for contempt of its authority, or that of any Labour Court, as if it were a High Court Division of the Supreme Court xi. The Tribunal has the power to transfer a case from one Labour Court to another either on its own motion or on the application of any party xii. The Tribunal shall have the power of control and supervision over all Labour Courts xiii. The Tribunal has the power to pass an order prohibiting the continuance of any strike or lockout in pursuance of any industrial dispute in respect of which any appeal is preferred to the Tribunal  Preventive measure for avoiding industrial dispute 22  The Bangladesh Labour Act, 2006 provides an important tool for minimizing industrial disputes at the very initial stage by the intervention of the Participation Committee.  The Participation Committee is a bipartite mechanism comprising of equal number of representation of workers and employers  In an establishment where fifty or more workers are employed the employer is bound to constitute a Participation Committee to his establishment  The representatives of the workers in the Committee shall not be less than the number of the representatives of the employer  The representative of the workers in the Participation Committed shall be appointed on the basis of nomination by trade union or from the workers engaged in the establishment in the absence of trade union  The principle function of the Participation Committee is to inculcate and develop a sense of belonging and workers’ commitment and in particular a) To endeavour to promote mutual trust, understanding and cooperation between the employer and the workers; b) To ensure application of labour laws; c) To foster a sense of discipline and to impose and maintain safety, occupational health and working condition; d) To encourage vocational training, workers’ education and family welfare training; e) To adopt measures for improvement of welfare services for the workers and their families. f) To fulfill production target, reduce production cost and wastes and raise quality of products  Preventive measure for avoiding industrial dispute 23  The employer and the trade union of the establishment shall take necessary measures to implement the specific recommendations made by the Participation Committee within the time prescribed by it  If by any reason the employer or trade union faces any problem in implementing the recommendations of the committee within prescribed time, the Participation Committee shall be informed of it and all possible endeavours shall have to be taken to implement the recommendations  the role of Participation Committee is very limited as such committee exists only in a very few industries and establishments.  Only five per cent of the existing establishments have Participation Committees. Some of them do not even operate regularly.  There is hardly any participation committee in RMG, EPZs and shrimps sectors.  Dispute settlement in export processing zone 24  The BEPZA set up an Industrial Relations Department to take over the powers of the Ministry of Labour’s Directorate of Labour in the EPZs.  A manager entrusted with the task of grievance handling, dispute settlement, and labour inspection heads the Industrial Relation Department in each zone  The Industrial Relations Department uses a checklist to monitor compliance with the provisions provided in BEPZA’s guidelines for benefits and privileges to be accorded to the workers.  BEPZA management believes that 100 per cent of the large firms comply with the law, but many smaller enterprises have been cited for late or non-payment of wages  According to the EPZ Workers’ Association and Industrial Relations Act 2004, when a difference between an employer and worker is found they will sit for negotiation to settle the issue  When negotiation fails any of the parties can request to the conciliator to conciliate them in the dispute  If the conciliation fails though the parties to the dispute are entitled to go for strike or lock-out but this right has been suspended till October 31, 2010.  Dispute settlement in export processing 25  There is another provision to go to the EPZ Tribunal for settlement of dispute, but it is still in the process and till now no EPZ Tribunal has been setup  Arbitration is also available.  In practice it is revealed that there are two conciliators, sixty counselors and one arbitrator in the EPZs in Bangladesh.  The workers submit grievances to the counsellors in written form. They are then inquired and the matter is decided upon by the counsellors accordingly  The matters which are not settled by the counsellors are referred to the conciliator and then conciliator initiates his proceedings.  In 2007 the Office of Conciliator of Chittagong Export Processing Zone settled a number of 40 disputes in which Tk 10,03,066 were awarded to the workers as compensation  It seems that the BEPZA authority is giving one stop service to the workers in settling their disputes