The draft of Public Service Act (PSA), which would be known as Sarkari Karmachari Ain, 2015, got approval in principle from the Cabinet on Monday.
The draft law has a provision of reforming the administration and forminga permanent pay commission.
The approval came at the regular weekly Cabinet meeting held at the Prime Minister's Office (PMO), with Prime Minister Sheikh Hasina in the chair.
After the meeting, Cabinet Secretary M Musharraf Hossain Bhuiyan briefed reporters at the Cabinet Division conference room at Secretariat.
Bhuiyan said the draft law also kept a provision of taking prior approval from the government for arresting any public servant in any civil case while discharging duty before acceptance of any  charge sheet by the court.
However, there is no bar to arrest if the charge-sheet is accepted by the court, Bhuiyan said, adding that administrative action is often taken in case of irregularities in discharging government duty. "In some cases, actions are taken considering the irregularities," he said.
But, there is no bar to arrest of a public servant, in case of their involvement with any criminal offences, the Cabinet Secretary added.
Replying to a query, he said any agency concerned like Anti Corruption Commission (ACC) could investigate and frame charge sheet against any public servant for his or her offences while discharging duties.
Bhuiyan also said, "It would not be conflicting with the existing ACC law. There's no ambiguity in the law. Everything is within the framework of the Constitution and the existing law.
"It's an epoch-making step as it has been in discussion for a long time about formulating a law under the Article-133 of the Constitution to look into the matter of appointment and other activities of the civil servants," he said.
The appointment and activities of the public servants are controlled by the rules and ordinances promulgated by the President in different times. The new law would look into the appointment and different aspects of the services, the Cabinet Secretary added.
Bhuiyan said any previous law contrary to the new law would be dysfunctional. The new law broadly defined the 'persons in the service of the republic' saying employees of some categories will remain beyond the purview of the law.
He said the services of the persons under constitutional posts, judicial service, defence personnel, disciplined forces, public university teachers and employees and employees of the Supreme Court, Railway, any temporary commission, local government bodies and development projects would not be considered as public servant under the law.
They will be guided by separate laws of the organizations concerned.
Necessary rules would be framed on 10 different issues for making the law operational. The rules would be framed on appointment, promotion, seniority, leave, posting, deputation and lien, conduct and discipline, retirement benefits, resignation and retirement, he added.
Bhuiyan said separate rules would be framed under the new law for examination for promotion, performance appraisal, career training and skill development, higher studies and training, privileges, incentives, disability, welfare and preservation of quota for disabled persons and backward communities.
No employee would be affected because of the restructuring of the service under the law and government employees would be rewarded for any outstanding contribution to the service, Bhuiyan said.
"The retirement age of civil servants will be ascertained by the Public Service Act, 1974."
According to the law, the Ministry of Public Administration will lose its authority to forcibly retire a public servant without prior notice. It will be mandatory to serve notice for explanation or self defence before sending a public servant to retirement in case of any violation of the law or rules.
A public servant will be removed from the service finally, if he or she is convicted for more than one year or be penalised Tk20,000 for alleged involvement with corruption or moral degradation.
However, the decision of the President would be final about the officers who are convicted up to one year or penalised up to Tk20,000.
The Cabinet Secretary said the draft of the act will be sent to the Legislative Division of the Ministry of Law for vetting before placing at the Cabinet again for final approval.
The Cabinet also approved the draft of the "Army (Amendment) Act, 2015" and the "Air Force (Amendment) Act, 2015" and the "National Disaster Management Policy, 2015" prepared as a supplementary to the existing Disaster Management Act of 2012.
Ministers, State Ministers and Secretaries concerned attended the meeting.