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A last-minute amendment to labour law by the interim government has reduced mandatory profit-sharing by foreign energy companies, triggering concerns over potential losses for workers and broader policy implications.

The government cut contributions to the Workers’ Profit Participation Fund (WPPF) from 5% to 1.5% for foreign energy firms, issuing a gazette notification just a day before handing over power on February 17.

Questions over timing

The move has drawn criticism from economists and labour leaders, who questioned the urgency of the decision and warned it could weaken workers’ entitlements.

Dr Khondaker Golam Moazzem of the Centre for Policy Dialogue said the decision should have been left to the elected government.

“The interim government should not have taken such a decision. The elected government should reconsider it,” he said, questioning what prompted the change.

Reduced share for workers

Under existing rules, most private companies are required to contribute 5% of net profits to the WPPF, with 80% distributed among employees and the rest allocated to welfare funds and the government.

The নতুন amendment lowers this obligation for foreign energy companies such as Chevron Bangladesh and Tullow Bangladesh, allowing them to share a smaller portion of profits with workers.

Labour leaders argue this will directly reduce workers’ benefits and weaken a system designed to promote shared prosperity.

Risk of wider impact

Stakeholders warn the change could set a precedent, encouraging other sectors to seek similar exemptions.

Moazzem noted that such a move may prompt local companies to push for reduced contributions, especially in a system where compliance is already uneven.

Opposition from labour groups

Labour leaders said they had opposed the proposal during multiple meetings before the amendment was finalised.

Babul Akhter, a labour representative, said the decision would “badly affect workers’ interests,” adding that their objections were ignored.

Investment vs workers’ rights

A former adviser to the labour ministry indicated that pressure from policymakers seeking to attract foreign investment influenced the decision.

While countries worldwide maintain similar profit-sharing mechanisms to support workers, critics say weakening such provisions could undermine fairness in income distribution.

With enforcement already inconsistent, analysts warn that the reduced contribution requirement could further erode compliance and dilute worker protections in the long run.