Eid Bonus

Before Eid every year a confusion arises with respect to payment of festival bonuses! The Government has clarified all such ambiguity by Bangladesh Labor Rules, 2015. Rule 111(5) enshrined that, any worker who has completed one year of service consecutively is entitled to two festival bonuses in a year.

Now, the issue is what will happen to the employees who has not completed one year before the disbursement of the bonus? Or what will happen to one who is on unpaid leave? Anyone completed one year is eligible to this bonus. For the purpose of calculation of entitled amount, sum of two bonuses will be divided by 365 days to determine the bonus amount of one day, which will be multiplied by his total days of work in the said year.

If for any reason, the bonus could not be distributed by the employer before Eid, it is imperative that the amount payable be paid as soon as possible as ‘arrear’.

It should be kept in mind that, Bangladesh Labor Act, 2006 (“BLA_2006”) provides provisions for minimum benefits only (refer to first proviso to Sec. 3 of BLA 2006) and any benefits cannot be less favorable than the provisions of BLA 2006. Therefore, if any employer wishes to provide more benefits than what Labor Rule 2015 has suggested, e.g. payment of full bonuses instead of proportionate amount, is allowed; which might have a greater impact on employee satisfaction and employee retention-ship plan.

Note: This is not a legal opinion or advice and is only a personal opinion on the issue solely for academic purposes.