Blurred Lines in Labour Law: Redefining Employer and Worker in a Changing Industrial Landscape
Md. Mostafa : In the age of the fourth industrial revolution, the growth of the modern state pivots highly on the industrial nexus between the employer and employees, viz. workers. It is a common phenomenon that, due to the nature of the character of the relation, industrial or labour disputes occur frequently. Therefore, a sustainable relationship among all the stakeholders remains pivotal for strengthening the industrial environment.
The Bangladesh Labour Act of 2006 governs the rights and obligations of both employers and employees in our nation. However, some ambiguities in the Act have created loopholes that are frequently abused, especially in the definitions of “employer” under Section 2(49) and “worker” under Section 2(65). People who work primarily in management, administrative, or supervisory roles are not considered workers under Section 2(65). A crucial point is brought up by this exclusion: Who is eligible to occupy a management or supervisory position, and how does this designation impact their rights in non-governmental organisations like private businesses? According to the labour law, an employer is someone who: Hires employees; oversees or manages the business; or, although not the owner, has the final say over the management and operations of the business.
The Labour Act, 2006 Act does not specify who is regarded as a supervisory officer or as someone who holds an administrative or managerial position. The Bangladesh Labour Rules, 2015, supplement these lacunas. Rule 2 of the Bangladesh Labour Rules, 2015, contains the definitions. Rule 2(1) (Nio) provides that “any person engaged in administrative or managerial work” means any person authorised in writing by the employer or management, who shall be engaged in appointing a worker or employee, determining salary and allowances, removing or dismissing from the employment, paying off final payment to the workers or employees of the factory or establishment, and ratifying or controlling the activities in relation to the expenditure of the establishment by virtue of such power vested upon him.
Rule 2(1)(Chha) defines a supervisory officer as an individual who is authorized in writing by the employer or management to perform certain duties. These duties include determining the work or service targets for a section within a factory or establishment, controlling the scope of work, overseeing the implementation of activities, evaluating or reviewing the work, and giving instructions to workers or supervising their tasks.
Given that the Bangladesh Labour Rules, 2015, have clearly outlined the functions of an administrative, managerial, or supervisory officer, it is silent on whether such a person has to perform all the functions mentioned or if any one of the functions would be adequate to meet the requirements. It would be preposterous if it were required to perform all the functions laid down under Rule 2(1)(Nio) or Rule 2(1)(Chha), respectively. Since, in large corporations, there are distinct professionals for production, human resources, and finance management. In such corporations, it is far-fetched that an individual would both hire and fire workers, control the company’s expenditures, and determine the target of work or service of a section of a factory or establishment.
In our country, generally, it is practiced that only the board of directors and the founders of any establishment hold the ultimate power to hire and fire, along with making major financial and commercial decisions. Therefore, a reasonable shadow of ambiguity darkens the rights of the employees who are neither followed by the definition of worker expressly nor by the employer but exercise functions mainly of a managerial or administrative nature. In case of any breach of the rights of these employees, legal actions are often not accessed and asked for by the aggrieved due to various obstacles. But the practice of following judicial precedence and interpretation ignites the extinguished lamp so that no one suffers for being not protected by laws, and the state is compelled to follow, as we all know how corporate entities misuse and take ill-motivated advantages sometimes.
In determining whether someone is an employee, worker, or independent contractor, courts typically rely on a variety of tests to assess the nature of the relationship between the worker and the employer. The goal is to determine how much control the employer has over the worker, the degree of independence the worker has, and whether there is an economic dependency. These tests are commonly referred to as the mutuality of obligation test, the control test, and the economic reliance test.
The case of Indo Pak. Corporation vs. Chairman, Labour Court(1969) lays forth the guidelines for evaluating a worker that have been established by Supreme Court legal precedent. In this instance, the honourable court declared: “As one swallow does not make a summer, neither the status of an administrative officer nor a manager with supervisory powers is conferred upon an individual by the simple act of signing checks together with the manager when required by the authorities. Consequently, the exclusions listed in clause (v) of section 2 of the Act would not apply to such a person. For a worker, the nature of work is of prime importance. In the case of Dosta Tex. Mills Vs. S.B. Nath (1988), it was held that mere designation is not sufficient to indicate whether a person is a ‘worker’ or an ’employer,’ but it is the nature of the work, showing the extent of his authority, which determines whether he is a worker or employer.
Even if it is taken that he has a supervisory function, still mere supervisory capacity will not bring him into the category of “employer.”. Sub-clause (ii) of clause (v) of section 2 of the Act shows that a person who, being employed in a supervisory capacity, “exercises function mainly managerial or administrative in nature” will fall into the category of employer. Respondent does not exercise any functions managerial or administrative in nature. He got no power to control or to supervise the work of any other person. The nature of his work does not bring him within the category of ’employer,’ which has been defined in clause (8) of section 2 as a person who is “concerned with the management and responsible to the owner for control of the industrial establishment.”. It is, therefore, clear that the respondent is not an employer but is a worker under the Act. It may be mentioned that the expressions managerial” and manager” are included in the definition of “employer.”
According to Sub-clause (ii) of clause (v) of section 2 of the Act, a person employed in a supervisory capacity will be considered an employer only if they perform functions that are primarily managerial or administrative in nature. In this case, the respondent does not engage in managerial or administrative functions and lacks the authority to control or supervise the work of others. As such, the nature of their work does not categorize them as an “employer” as defined in clause (8) of section 2, which describes an employer as a person responsible for the management and control of an industrial establishment on behalf of the owner. Consequently, it is evident that the respondent is a “worker” under the Act, not an employer. It should be noted that the terms “managerial” and “manager” are specifically included in the definition of “employer.
The trial court did not go deep into the matter to determine whether the plaintiff was a worker, but the appellate court came to a clear finding that the plaintiff was not a worker. Mere designation cannot show a person not a worker. In the case of the Managing Director, Contiforms Forms Limited Vs. Labour Appellate Tribunal, Dhaka(1998) Respondent No. 3 was a sales assistant and was transferred as production manager, and subsequently, he was again transferred to the head office as sales assistant. In its decision, the High Court Division underlined the idea that a person cannot be classified as a non-worker based solely on their designation.
A number of precedents were cited to bolster the argument put forth by the Advocate for respondent No. 5. The Court agreed with the perspective presented in these cases, restating that management must present adequate proof to demonstrate that the employee in question carried out managerial or administrative tasks. The High Court Division observed that the management did not provide any evidence or present any material to support the assertion that respondent No. 3 in the corresponding writ petitions was performing such managerial or administrative duties after examining the rulings of the Labour Court and the Labour Appellate Tribunal. The High Court Division was of the view that the Labour Appellate Tribunal has committed no illegality in holding that respondent No. 3, in both the writ petitions, was a worker in the employment of the management of the petitioners.
In the Mehdi Hasan vs. Bangladesh (2014) it was observed that possessing supervisory ability does not preclude employment. The main factor determining an employee’s status as a “worker” is whether or not they are carrying out management and administrative duties, as stated in section 233 (1)(Ja)(1) and (2) of the Act of 2006. According to Section 233(1)(Ja)(2), individuals carrying out management and administrative duties while engaged in a supervisory role are not considered workers. An individual cannot be considered a “worker” if they are not performing management or administrative duties, even if they are exerting supervisory authority. The petitioners base their argument on the High Court Division’s ruling in Mujibur Rahman vs. Chairman Labour Court. In that case, the High Court Division interpreted section 2(v) of the Act of 1968, which is comparable to section 233(1)(Ja) of the Act of 2006, and concluded that an individual does not lose their status as a “worker” simply because they are employed in a supervisory capacity. It must be further demonstrated that such an individual performs mostly managerial and administrative duties.
In Bangladesh, nontraditional work arrangements—such as freelancing, gig work, remote work, and part-time employment—have seen significant growth in recent years, largely due to technological advancements and changing global work trends. However, the development and acceptance of these arrangements in the country remain uneven across different sectors and demographics. While opportunities in freelancing, remote work, and gig work are expanding, challenges remain regarding legal protection, minimum wage, maternity leave, written agreements, job security, and income instability. Breach of data privacy and facing difficulties in terms of technological infrastructures remain the prime challenges. As the workforce continues to diversify and non-traditional employment grows, the need for labour law rights to protect these workers becomes more pressing. These workers are often classified as independent contractors or freelancers, and as such, they are typically excluded from many of the legal protections and benefits afforded to traditional, full-time employees. Addressing this need is essential not only to ensure fair treatment and job security for workers but also to create a more equitable and sustainable labour market. The government and private sector must work together to create a more robust framework to support these workers and ensure their rights and well-being.
There shall be the inclusion of hybrid roles within labor law, whereby individuals who do not possess the authority to make final decisions are categorized as employees rather than workers. Should their responsibilities predominantly involve managerial tasks, they will be classified as employees. Conversely, if their primary duties are operational in nature, they will be considered workers.
Due to the increasing complexity of the legal system, there is a blurred line between what constitutes an employee and what constitutes a worker. The traditional employer-employee relationship can now be highly complex in light of modern-day work practices and today’s growing gig economy. The statute governing employment status, The Bangladesh Labour Act, 2006, together with The Bangladesh Labour Rules, 2015, has become moderately inefficacious and, therefore, needs to be contemporised in the ever-changing employment world of industries and establishments.
Writer Md. Mostafa is an apprentice lawyer.
