Industry leaders call for labour law revisions over investment risks

Business Report :

Leading business associations have called on the government to review the newly approved amendment to the labour law, warning that the changes could hurt investment and create instability in the country’s industrial sector.

The appeal came less than a week after the Advisory Council approved the Bangladesh Labour (Amendment) Ordinance 2025, which allows as few as 20 workers in any establishment to form a trade union a major policy shift from previous rules that required a higher minimum number or percentage of workers.

At a press conference held at the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) office in Dhaka Tuesday, business leaders said the reform, though well-intentioned, could lead to labour unrest if applied without sufficient preparation.

“We are not ready for graduation from the Least Developed Country category, and we need at least a three-year extension to prepare for the challenges ahead,” said BGMEA President Mahmud Hasan Khan.

Khan and other trade-body leaders argued that allowing very small groups to form trade unions could disrupt production, invite external influence in factories, and discourage both domestic and foreign investment.

“If only 20 workers can form a union, people with no real link to the factory could influence operations and create unnecessary disputes,” one garment manufacturer warned.

The business leaders also criticised the recent tariff hikes at Chattogram Port, saying the higher costs are eroding competitiveness at a time when Bangladesh’s export sector is already under pressure from global economic uncertainty and rising production expenses.

Background to the amendment
The labour law amendment follows Bangladesh’s ratification of three International Labour Organization (ILO) conventions earlier this year focusing on workers’ rights, safety, and protection from harassment and violence at the workplace.

The government says the reforms are part of its broader effort to align national labour standards with international norms, especially under pressure from global trade partners such as the European Union and the United States, who have long urged Bangladesh to improve labour conditions in export industries.
Mixed reactions
While labour rights activists welcomed the amendment as a step toward stronger worker representation and greater accountability in factories, industry leaders fear the move could reduce stability in export-oriented sectors like garments which employ over four million workers and account for more than 80 percent of Bangladesh’s export earnings.

“The government should balance labour rights with industrial realities,” said an economist at a Dhaka-based think tank.