The government is set to exempt banking companies from the purview of Bangladesh Labour Act 2006 as the bankers do not want to be treated as 'workers' as they perform white-collar jobs, sources said.
Legislative and Parliamentary Affairs Division has recently approved a proposal, put forward by Financial Institutions Division in this regard, and found 'the proposal as rational'.
However, legislative division suggested that the Ministry of Labour and Employment take steps for amending the section concerned of the labour law to grant banking companies the required exemption.
Chapter XV of Bangladesh Labour Act contains the provision of establishment of a Workers' Participation Fund and a Workers' Welfare Fund. The companies are bound to pay 5.0 per cent of its net profits accrued in the previous year.
While amending Labour Act-2006 in 2013, the government included banking companies in the list of areas where Chapter XV will be applicable. Since then, bank owners and employees have been requesting the government to exempt the sector from the labour law.
Bank owners were of the opinion that all the scheduled banks are operating in the country as per Banking Companies Act (BCA) where labour law should not be applicable.
They observed that providing 5.0 per cent of net profits of the banks to the workers' welfare fund, as mentioned in the labour act, will result in profitability drop, depletion of banks' capital base, decrease in share prices and possible negative impact on the capital market.
They said banks provide better compensation package and congenial working environment for their employees. Besides, they give additional financial facilities to its employees through incentive bonus, medical assistance, and superannuation fund and welfare schemes.
The bank owners earlier met Finance Minister AMA Muhith, seeking exemption from applicability of labour law in case of banks. Leaders of Association of Bankers, Bangladesh (ABB), the body of bank employees, also opined in favour of the bank owners' proposal.
When contacted over telephone Thursday, former ABB chairman Anis A Khan told the FE that a salaried person, according to banking companies act, cannot be part of profit sharing.
"Our job pattern is not similar to other workers who are employed in the factories. The salary we draw is good enough," he said.
"People who are involved in white-collar job cannot be treated as workers," he noted.
Asked whether the ABB joined hands with bank owners in this case being persuaded by bank owners as they will have to share 5.0 per cent of net profits with the employees, Mr Khan answered in the negative.
He, however, said sharing 5.0 per cent of net profits with the employees may create problems for overall banking sector including profitability drop and depletion of banks' capital base.
Earlier in a letter to the labour and employment ministry, the central bank mentioned that Section 11 (1) (B) of Banking Companies Act 1991 prohibits a banking company from employing any person who receives his/her remuneration or part of remuneration in the form of commission or of a share in the profits of the company.
The insertion of the workers profit participation fund in the amended labour act is in conflict with Section 11 (1) (B) of banking companies act, the letter reads.
syful-islam@outlook.com