Presented by: Md.

Mozahed Hossain
Deputy Secretary Ministry of Labour and Employment, Bangladesh Secretariat
The views expressed in this presentation are the views of the author and do not necessarily reflect the views or policies of the Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.

Informal Sector & Non-Regular Workers of Bangladesh

According to the definition of International Labour Organisation (ILO) '' the informal sector consists of small-scale, selfemployed activities (with or without hire workers) typically a low level of organisation and technology, with primary objective of generating employment and incomes. The activities are usually conducted without proper recognition from the authorities, and escape the attention of the administrative machinery responsible for enforcing laws and regulations.''

Non-Regular Employment
Generally Non-regular workers means -

Non Regular employment refers to the use of specific form of employment arrangement that provides no security of tenure for workers and exclude them from receiving non wage benefit.

Background
Industrialization starts in Bangladesh in the 1960s. After independent (1971), government nationalized all the major industries and factories. From early 80s Govt. starts privatisation and encourage private investment; In this dilemma, informal sectors are now increasing in large scale and state owned sectors are becoming smaller. Due to increase informal and private sector, non-regular workers has been increasing as well in both formal and informal sector.

Present Labor Force Status

Total Workforce Male Female Formal Sector Informal Sector

: : : : :

49.5 million 37.3 million 12.1 million 10.2 million 37.2 million

Source: Labor Force Survey 2005-06 by BBS

Sector wise employment

Sector Agriculture, forestry & fisheries Manufacturing Construction Trade, Hotel & Restaurant Transport, storage & Communication Health, education, public administration & defense Community & personal services Mining & quarrying Electricity, gas & water Finance & business services and real estate Total
Source: Labor Force Survey 2005-06 by BBS

Total Number (million) 22.8 5.2 1.5 7.8 4.0 2.6 2.6 0.1 0.1 0.8 47.4

Workers Classification
According to the Labour Act, 2006 Workers employed in any establishment shall be classified in any of the following classes according to the nature and condition of work; namely (a) apprentice (b) badli (c) casual (d) temporary (e) probationer (f) permanent. permanent type work should not be treated as temporary work And after 30 days of continuation work, worker should be permanent

Employed persons by formal and informal sector

Sector Bangladesh Total M F Total Percent
Total Formal Informal Others 100 13.91 78.44 7.64 100 14.67 76.18 9.15 100 11.51 85.69 2.8 100 26.06 66.96 6.98 100 100 100 100 100

Urban M F Total

Rural M F

25.74 27.07 10.14 11.22 6.72 66.35 68.92 82.01 79.24 90.85 7.9 4.01 7.85 9.54 2.13

Source: Labor Force Survey 2005-06 by BBS

Conditions of the Workers

In Bangladesh, more than 80 percent workers are involved in the informal sector. Comparing to the informal sector, workers of the public sectors are enjoying better condition in Bangladesh. Low wage, poor working conditions, absence of social safety net, no job guarantee and so many hazardous things are still existing in the informal sectors.

Recent Change in Bangladesh Labor Markets Paradigm shift from state owned to Privatizations in last 2 decades. Increasing women workers in the labour market especially in RMG Sector Fast growing service sectors Fast growing informal sectors Rising Foreign Investment especially in EPZs & Telecommunication Joining Young workers in service & Education Sectors Women Empowerment

Changing Pattern in Employment

Outsourcing (e.g. Security, cleaning etc.) Contractual (e.g. Multinational Company/Agency) Daily Basis (e.g. Informal Sectors) Hour basis Master rolling Employed by labour contractor

Major Types of Informal & Non-Regular work Agriculture Construction Domestic work Day labourer Hawker Transport Small manufacturer Fishing Sales Production Service provider

Reasons for increasing informal work

Decrease of state owned organisation & increase of private sector River erosion Cyclone, flood and other natural disaster Decrease of agricultural land Migration Lack of Education Monga

Govt. Position & Initiatives

Increasing employment opportunity. Work for 1 person from 1 family; Labour law amend to regulate the employment relationship and to ensure workers protection Skill develop for internal and external employment Increasing Social Safety net including Labour Welfare Foundation Act, 2006

Government Position & Initiatives

Govt. is aware enough about workers vulnerability due to flexibility of employment. So there are safety clause in labour law for their wage Bangladesh Labour Act, 2006
Section 121

Provided further that when the wages of a worker employed by the contractor is not paid by the contractor, the wages shall be paid by the employer of the establishment and the same shall be adjusted from the contractor.

Government Position & Initiatives

continue...

Govt. established Workers Welfare Foundation where special provision has been made for informal sector workers; Protection of Informal sector workers has considered in upcoming amendment of Labour Act, 2006; Social Safety Net Scheme has been increasing through alternative skill training arrangement; Expansion of LL coverage According to the Labour Act, 2006 Chapter 1 Section 4 (dha)
This act shall not apply to agricultural farms where less than 10 workers are normally employed

Due to the initiative of Govt. the number of workers became 10 instead of 25, which created opportunity to cover more workers under legal framework;

Government Position & Initiatives

continue...

According to the Labour Act, 2006 Chapter 1, Section 2 (7) factory means any premises including the precincts thereof whereon 5 or more workers ordinarily work on any day of the year and in part of which a manufacturing process is being carried on.

Due to the initiative of Govt. the number of workers became 5 instead of 10, which created opportunity to cover more workers under legal framework;

Bangladesh Labour Welfare Foundation Act, 2006

Non-government sector where a workers work or job conditions etc. are not covered within ambit of the Labour Act (of 2006) and related rules and where workers have limited opportunity to be organized.

Definition:

Service Provision:

ensure welfare of the workers and his family initiate and implement different projects for the welfare of the workers and his family provide financial assistance to worker especially who is incapable or disabled treatment or financial assistance for ill worker financial assistance to his family when a worker dies in accident scholarship or stipend to the meritorious family member of worker for education group insurance for the life insurance of worker and for that pay premiums to the insurance company from the fund

Challenges for Future

Environmental Job losses due to climate change especially in the sector of Agriculture, fisheries in costal belt, which will make the workers more vulnerable Economic Economic recession Non-tariff Barrier Social Due to over population increase social unrest and decrease employment opportunities. Due to fast growing automation informal workers will not be able to cope with new technology, which will make them more vulnerable.

Govt. future need

Amend and expansion of the labour law to ensure the rights and regulate the informal economy; Capacity building of labour inspection and directorate; Support SME, rural and agro-based industries to create employment generation; Vocational and Skill development for alternate; Create job opportunity in rural areas.

Thank you