PARTICIPATION OF WORKERS IN THE PROFIT OF THE COMPANIES
![232. Application of the Chapter.—(1) This Chapter shall apply to a company or establishment which fulfils any one of the following conditions, namely:—
- the amount of its paid up capital on the last day of an accounting year is not less than taka 1 (one) crore;
- the value of its permanent assets on the last day of an accounting year is not less than taka 2 (two) crore.
- The Government may, by notification in the official Gazette, also apply this Chapter to any other company or establishment specified therein.
- Notwithstanding anything contained in sub-sections (1) and (2), the Government shall, in the cases of hundred percent export oriented industrial sectors or hundred percent foreign exchange investing sectors, make, by rules, the provisions for constitution of a fund, constitution of the fund management board, determination of the amount of grant and manner of its collection and utilization of the fund and the necessary provisions for other ancillary matters, centrally in each such sector, consisting of the buyers and employers, for the beneficiaries working in the respective sectors:
Provided that such board may, subject to the prior approval of the Government, make regulations for carrying out the proposes of this section.]
- Special definitions.—(1) In this Chapter, unless there is anything repugnant in the subject or context,—
- “Participation Fund” means the Workers Participation Fund established under this Chapter;
- “Welfare Fund” means the Workers Welfare Fund established under this Chapter;
- “company” means a company within the meaning of the Companies Act, 1994 and also includes the following establishments, namely:—
- a body corporate established by or under any law for the time being in force;
- any establishment, organization or association, whether incorporated or not, declared by the Government, by notification in the official Gazette, to be a company for the purposes of this Chapter;
- “Fund” means the Participation Fund and the Welfare Fund;
- “Board”, in relation to Participation Fund and Welfare Fund, means a Board of Trustees constituted under this Chapter;
![(ee) “owner” means the owner or management authority or chief executive of any company or establishment or any person who succeeds them;]
- “profits”, in relation to a company, means the net profit as defined in section 2 of the Companies Act, 1994 which are attributable to its business, trade, undertakings or any other work in Bangladesh;
3[(g) the activities of any establishment, business establishment, industry, factory, bank, money lending establishment or insurance company run for profit, and the activities related with one or more of the following shall be considered to be “industry related activities”, namely:—
- making changes in the original condition or making addition to value, of any goods, material or thing by manufacturing, assembling or polishing it or by bringing it in any other normal or artificial process;
- ship building and recycling;
- transformation, generation, conversion, transmission or distribution of electrical energy including hydraulic power;
- working in mine, oil well or any other source of mineral deposit including blending, refining or purifying of oil and gas;
- distribution and marketing of oil and gas;
- carriage of man or goods by air or sea;
- service establishment, like mobile operator company, construction establishment; and
(viii) any other activities declared by the Government, by notification in the official Gazette, to be the industry related activities for the purposes of this Chapter;
- “industrial establishment” means an industrial establishment mentioned in clause (61) of section 2 which is run for profit;
- “beneficiary” of a company means any person including a probationer who has been employed in the company for not less than 9 (nine) months irrespective of any rank and status, excepting the employer, a partner or a member of the management board.]
- In this Chapter, “paid-up capital” and “value of fixed assets” of a company shall, in the case of a company incorporated in a foreign country, mean the capital and the value of fixed assets of such company engaged in a branch of it in Bangladesh.
- Establishment of Participation Fund and Welfare Fund.—(1) Every company to which this Chapter applies shall—
(a) establish a Workers Participation Fund and a Workers Welfare Fund in accordance with the provisions of this Chapter within 1 (one) month of the date on which this Chapter becomes applicable to it; and
1[(b) pay, within 9 (nine) months of the close of every year, five percent (5%) of the net profit of the previous year at the proportion of 80:10:10 to respectively the Participatory Fund, Welfare Fund and Workers Welfare Foundation Fund established under section 14 of the Bangladesh Workers Welfare Foundation Act, 2006:
provided that if an employer deposited one percent (1%) of the net profit of the company to the Welfare Fund immediately before this provision takes effect, the Trustee Board shall be required to deposit fifty percent (50%) of the money so deposited to the Welfare Fund to the above-mentioned Workers Welfare Foundation Fund.]
- The amount paid to the said [Funds] under sub-section (1) (b) in relation to a year shall be deemed to have been allocated to those [ Funds] on the first day of the next succeeding year.
- Management of the Funds.—(1) As soon as may be, after the establishment of the Participation Fund and the Welfare Fund, there shall be constituted a Board of Trustees consisting of the following members, namely:—
- two members nominated by the collective bargaining agent of the company and if there is no collective bargaining agent, 2 (two) members elected by the workers of the company from amongst themselves; and
- two members nominated by the management of the company, of whom at least one shall be a person from the accounts section of the company.
- The Board of Trustees shall, in exercise of its powers and performance of its functions, be subject to such directions as may be given by the Government from time to time.
- If the Government is of opinion that the Board of Trustees or a member thereof is persistently failing in the performance of its or his functions or is generally acting in a manner inconsistent with the objects and interests of the Funds, the Government may, after giving the Board or such member an opportunity of showing cause by order—
- dissolve the Board for such period as may be specified therein or remove such member from his office; and
- direct that until the Board of Trustees is reconstituted or until a new member is nominated or elected to the office of such member, the powers and functions of the Board or such member shall be exercised and performed by a person specified in the order.
- Upon the dissolution of the Board of Trustees under sub-section (5), the members of the Board shall cease to hold office and any reference to the Board of trustees in this Chapter or any rules shall be construed as reference to the person specified in the order made under the sub-section.
- Before the expiry of the period of dissolution, the Board of Trustees shall be re-constituted in accordance with the provisions of this Chapter so as to enable it to take over its charge upon the expiry of such period.
![(8) If any Board of Trustee is dissolved, or the Chairman or any member thereof is removed, by the Government under clause (a) of sub-section (5), the members of such Board or the Chairman or the member concerned thereof shall not be re-elected or nominated to the Board of Trustee.]
2[236. Fine, recovery of money, etc.—(1) Where any company or Trustee Board fails to comply with the provisions of section 234, the Government may, by order, direct it to do acts in accordance with the provisions within such time as may be specified is that order. 
- If any amount payable under section 234 remains unpaid and any fine imposed under this section is not paid within the time specified in the relevant order, such unpaid amount and fine shall be deemed to be public demand and be recoverable in accordance with the provisions of the Public Demands Recovery Act, 1913 (Act No. IX of 1913).
- Any person aggrieved by an order issued under sub-sections (1) and (2) may, within 30 (thirty) days of making such order, apply to the Government for review thereof and the Government shall, on receipt of such application, within not exceeding 45 (forty-five) days, review the matter and make appropriate order and inform the person, company or Board of Trustee concerned accordingly.
- An order made by the Government under sub-section (4) shall be final.]
- Power to call for information.—The Government may, at any time call upon a company or a Board of Trustees to furnish it with such information or documents or the records of the proceedings as may be relevant or useful for the purposes of, or necessary, for ensuring proper compliance with the provisions of this Chapter or rules.
- Settlement of dispute, etc.—(1) Any difference which may arise between the Board of Trustees and the company relating to the administration of the Funds shall be reported to the Government, and the decision of the Government thereon shall be final.
(2) Any complaint which a worker may have against the Board of Trustees or the company relating to the benefits available from the Funds shall be settled in the same manner as is provided in Chapter X for the settlement of dispute relating to deductions from wages.
- Delegation of power.—The Government may, by notification in the official Gazette, delegate all or any of its powers or duties under this Chapter, subject to such conditions as may be specified in the notification, upon any of its officers or any other authority.
- Investment of Participation Fund.—(1) The amount allocated or deposited in the Participation Fund shall be available to the company for its business operation.
- The company may request the Board of Trustees to utilize the amount of the Participation Fund for investment under sub-section (11), and the Board may decide for such investment.
- The company shall pay interest on the amount of the Participation Fund which is used for its business at the rate of two and a half percent above the bank rate or 75% (seventy five percent) of the rate at which dividend is declared on its ordinary shares, whichever is higher.
- In case there is more than one class of ordinary shares of any company, on which different rates of dividend are declared then, for the purpose of determining the rate of interest payable under sub-section (3), the weight average of the different rates of dividend shall be taken into consideration.
- The interest to the Participation Fund, so payable, shall be deposited to the Fund on and from the first day of the year next succeeding the year in which the Fund has been used by the company.
- Where any company does not want to utilize any amount of the Participation Fund in its business under sub-section (1), there shall also be payable the aforesaid rate of interest by the company on the said amount of the Fund for the period between the date of allocation of any amount to the said Fund and the date of its investment under sub-section (11).
- If, at any time after the establishment of the Participation Fund, the company raises any additional capital, otherwise than through the issue of bonus or bonus shares, the Participation Fund shall have the first option to convert any amount available to the company under sub-section (1), or any asset of the Participation Fund into ordinary equity capital; provided that it, shall not, after such conversion, be more than twenty five percent of the paid-up capital of the company or of 50% (fifty percent) of the additional capital, whichever is less.
Explanation.—In this sub-section “additional capital” does not include any capital offered for payment or offered to a foreign partner of the company.
- For the purpose of exercising the right of conversion under sub-section (7), the Board of Trustees shall be given sufficient time to sell assets of the Participation Fund to realize the amount needed for participation in the additional capital of the company.
- The shares acquired in the manner set out in sub-section (7) shall participate in future bonus and right-issues in the same manner as of other shares.
- The shares acquired in the manner set out in sub-section (7) shall have voting rights in the same manner as of other shares and such voting rights shall be exercised by the Board of Trustee on behalf of the Participation Fund.
1[(11) The money of the Participatory Fund may be invested in any Government-owned sector which is eligible for investment.]
- Eligibility to benefits.—(1) All  [beneficiaries] shall be eligible to get all benefits [in equal proportions] under this Chapter and to participate in the Funds.
- No [beneficiary] without completing 6 (six) months of service in a company during a year of account shall participate in the Funds in respect of that year.
- Utilization of Participation Fund.—(1) Two-thirds of the total amount deposited in the Participation Fund in every year shall be distributed in equal proportion to all ^beneficiaries] in cash, and the remaining one-third shall be invested in accordance with the provisions of section 240(11), whose profit shall also be distributed in equal proportion to all  [beneficiaries.]
- If a [beneficiary] voluntarily leaves the service of a company he shall be entitled to benefits of both the Funds, if any, admissible to him under this Chapter.
- If the service of a [beneficiary] is terminated, otherwise than by dismissal, he shall be as per with a [beneficiary] who retires from the service of a company.
- If any [beneficiary] is dismissed from service, his share in the Funds shall be forfeited.
- In the event of transfer of a [beneficiary] from one office or unit of a company to another office or unit of that company, the benefits of the Funds accrued to the beneficiaries shall be transferred to the Funds of the office or unit to which he is so transferred, and his service in the previous office or unit shall be counted towards his entitlement to the benefits of the Funds of the office or unit to which he is so transferred.
- In the event of retirement of a 8[beneficiary, the beneficiary himself], or in the event of his death during employment in a company, his nominee, shall receive full benefits under this Chapter.
9[243. Utilization of Welfare Fund.—Subject to the compliance of the provisions of this Chapter, the amount deposited in the Welfare Fund may be utilized for such purposes and in such manner as the Board of Trustee may decide, and the Board shall inform the Government relating thereto.]
- Fiscal concessions to the companies.—In the cases of all companies to which this Chapter applies any sum allotted to the said Funds by such companies shall not be counted in calculating their taxable income.
- Exemption of income of the Funds from income tax.—The income of the Funds including their capital gains shall be exempted from income tax.
- Exemption of income of the workers from income tax.—The sums paid out of the Funds to the workers shall be exempted from income tax.
- Location and work of the Board of Trustees.—(1) The office of the Board of Trustees shall be located at the company premises and if there is more than one office or unit of a company at the registered head office of the company.
- All expenses of the Board of Trustees, including the cost of maintenance of accounts of the Board, shall be borne by the company.
- Audit of accounts of the Funds.—The accounts of income and expenditure of the Funds shall be audited every year at the company’s expense in the same manner as the accounts of income and expenditure of a company is audited:
Provided that the Government may, at its own cost, appoint independent auditors for a special audit of the accounts of income and expenditure of the Funds.
- Benefits from the Funds shall be in addition to other benefits.—Any
benefit payable to a worker under this Chapter shall be in addition to, and not in derogation or substitution of, any other benefit to which the worker is entitled under any other law, contract, terms and conditions of employment or otherwise.
- Special provisions for industries working seasonally.—Notwithstanding anything contained in this Chapter, the Government may, by notification in the official Gazette, make provisions for the participation of the workers in the profits of such companies which work in any part of a year instead of the whole year.
- Companies engaged in activities relating to more than one industry.—
Notwithstanding anything contained in this Chapter, the Government may, at the request of a company which is engaged in activities relating to more than one industry, located at more than one place of the country, permit splitting up of the Funds amongst the different offices or units engaged in activities relating to industry and constitution of an independent Board of Trustees for each office or unit of such company; and the provisions of this Chapter shall apply to such office or unit as if it were a company.
Vesting of management of Participation Fund in the Investment Corporation of Bangladesh, etc.—The Board of Trustees may, with the prior approval of the Government, enter into an agreement with the Investment Corporation of Bangladesh or the Sonali Bank, for vesting of the management of the Participation Fund on it, and any fee payable under the terms of the agreement shall be payable by the company.
 The members of the Board of Trustees shall elect for every year a person to be the Chairman of the Board alternatively from amongst the members under sub-section (1) (a) and (1) (b), but the first Chairman shall be from amongst the members under sub-section (1) (b).
 The Board of Trustees shall manage and administer the Funds in accordance with the provisions of this Chapter and any rules made in this behalf.
 If any company or Board of Trustee fails to do any act within the time specified in the order issued under sub-section (1), the Government may, by order, impose on every director, manager or officer of that company who is directly or indirectly responsible for the management of the affairs of the company or, as the case may be, the Chairman, member or a person or persons of the Board of Trustee concerned who is responsible for the management of the affairs of that Board a fine of taka not exceeding 1 (one) lac and, in the case of continuous failure, a further amount of taka 5 (five) thousands for every day from the first day of such failure and direct to pay the total amount of fine within the next 30 (thirty) days:
Provided that if any person contravenes the aforesaid provisions again or fails to comply therewith, twice the amount of fine specified above shall be imposed on him.
The word “beneficiaries” was substituted for the words “workers” by section 69(a)(i) of the Bangladesh Labour (Amendment) Act, 2013 (Act No. XXX of 2013).
The word “in equal proportions” were inserted by section 69(a) (ii) of the Bangladesh Labour (Amendment) Act, 2013 (Act No. XXX of 2013).
 The word “beneficiary” was substituted for the word “worker” by section 69(b) of the Bangladesh Labour (Amendment) Act, 2013 (Act No. XXX of 2013).
 The word “beneficiaries” was substituted for the word “workers”, occurring twice, by section 70(a) of the Bangladesh Labour (Amendment) Act, 2013 (Act No. XXX of 2013).
The word “beneficiaries” was substituted for the word “workers”, occurring twice, by section 70(a) of the Bangladesh Labour (Amendment) Act, 2013 (Act No. XXX of 2013).
The word “beneficiary” was substituted for the word “worker”, occurring twice, by section 70(b) of the Bangladesh Labour (Amendment) Act, 2013 (Act No. XXX of 2013).
The word “beneficiary” was substituted for the word “worker”, occurring twice, by section 70(c) of the Bangladesh Labour (Amendment) Act, 2013 (Act No. XXX of 2013).
The word “beneficiary” was substituted for the word “worker”, occurring twice, by section 70(c) of the Bangladesh Labour (Amendment) Act, 2013 (Act No. XXX of 2013).
The word “beneficiary” was substituted for the word “worker” by section 70(d) of the Bangladesh Labour (Amendment) Act, 2013 (Act No.