News on Sunday

Rashid Hossen : “We will scrutinize before any attempt towards redundancy”

Rashid Hossen is the first president of the Redundancy Board. This institution has been operational since a month now. According to him, the setting up of this new institution will ensure more transparency in cases of restructuring and closure of companies. 

As the first president of the Redundancy Board, what are your responsibilities and the role of the board?
I am to apply the provision of the law, that is the particular section that deal with redundancy in the Worker’s Rights Act 2019. This is a new law and has led to the creation of this institution. Briefly from a historical point of view, prior to Independence, companies that were firing their employees had their cases dealt with by a Board known as the ‘Termination of Contract Service Board’. It was not a full-time sitting Board as such but it was attempting to reconcile the parties. The Labour Act 1986 provided for proper Termination of Contract Service Board. But it closed down. Then came the period of hire and fire. People having a long period of service only received one paid notice as salary and were declared redundant. The government then felt the necessity to look into redundancy. The fundamental difference between this current Board and previous institution dealing with redundancies is that the employer cannot declare an employee redundant unless the board is seized of the matter.     

What will be your priorities?
First of all, to look into the setting up of the Board structures, its permanent seat and the recruitment of proper staffing. We are in the process to be structured. We are doing it as quickly as we can. At the same time, I am dealing with some cases at a preliminary stage. 

Being the first president, is it a real challenge?
Indeed, it is a challenge. We have around 54,000 companies and cases have started coming in. It is an interesting challenge. 

For a small country, is redundancy becoming a real issue? 
It’s part of the business and economic cycle. Recycling is sometimes important for a company to be restructured. But at least this time, there will be transparency. The enterprise cannot just declare redundancy. Now, they have the duty to notify the Board. We will scrutinize before any attempt towards redundancy. 

If the Board finds the closing down is justified for economic or structural reasons, the employees will receive only a one-month salary."

With the introduction of the minimum wage, many SMEs are closing their doors. Is it justified to fire employees?
I am limited to the jurisdiction provided by the law. I have the power to decide whether their closing down is justified or not only for cases that I am dealing with. It is on a case-to-case basis. The decision is binding and subject to judicial review up to the Privy council. If the Board finds the closing down is justified for economic or structural reasons, the employees will receive only a one-month salary. But if the Board finds it is unjustified, then those declared redundant will be entitled to three months’ salary depending on their years of service and they may also benefit from several other allowances.

Can an employer be prevented from showing an employee the door?
The law provides that before an employer, who intends to reduce the number of employees or close down its enterprise, is bound to notify and negotiate with the representative of those workers. He is further to consider a series of possibilities to avoid taking such action. For example, restriction on recruitment, considering retirement of workers who are beyond the pensioner age or redeployment of workers.

What will be the role of the Board in such cases?
Then the law says the employer is deemed to have acted unjustifiably. The Board will act like a tribunal. After hearing the matter, the Board will issue an order. 

The law states that you only intervene for companies that have fifteen or more employees or have a turnover of more than Rs 25 million. What happens to companies that are not in this category?
Then they will not be considered by the Board. They are not bound to notify the Board. You can still have only one employee but can have a turnover of Rs 25 million. Irrespective of the number of employees, if the turnover exceeds Rs 25 million, the employer should notify the board. 

In the domain of labour law, a substantial number of workers are represented by trade unions who are pretty well-versed of the provision of the law."

Do you believe that employees know very little when it comes to their rights?
It depends. There are some people who are enlightened and others are ignorant. In the domain of labour law, a substantial number of workers are represented by trade unions who are pretty well-versed of the provision of the law. Some can be even represented by lawyers. The Ministry of Labour provides a reconciliation service.

What are your final words to employees and the employers?
It would in the interest of everyone to abide by the law. That is to say, the representative of employees must be notified before any drastic decision is taken or closing down the enterprise. Negotiate with them. Try to avoid drastic decisions by negotiating. If this fails, then notify the Board. When the Board seizes the matter, it has thirty days to decide. 

About Rashid Hossen

Rashid Hossen has spent a large part of his professional career in the judiciary. He has been a solicitor at the Public Prosecutor’s Office and has served at various levels of the judiciary to the Intermediate Court. He has also served as the President of the Employment Relations Tribunal (ERT). 

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