Consensus between the trade unions and employers' organizations on Draft Labour Act 2071

 Himalayan News Service

Kathmandu, October 12

Provision of ‘no work no pay’ is still a major hurdle in formulating the new Labour Act. Even as the private sector and trade unions agreed on a majority of labour related provisions to be included in the new Labour Act, the ‘no salary’ provision for protest periods has remained unresolved. 

A meeting of five major trade unions and employer organisations, on Friday, agreed on 28 points, out of the 30 points related to labour, as part of preparations to bring a new labour law. The two points that failed to receive consensus is related to ‘no work no pay’ and ‘sectoral bargaining’. 

With both sides failing to agree on the two points, they have urged the Ministry of Labour and Employment (MoLE) to decide over the issue after hearing out both sides. Employers demanding ‘no work no pay’ provision have been saying that they do not want a provision that requires them to pay salaries for protest periods. 

However, it is the right of workers to be organised and hold protests for their benefit if the employers fail to address their genuine demands within a certain timeframe. According to MoLE, it will hold discussions with both sides and decide on the provision. Another point in which the trade unions and employers failed to agree on was ‘sectoral bargaining’. This provision allows trade unions to fix benefits of workers separately under sectoral bargaining with employer organisations in different sectors. 

According to a draft of the new Labour Act prepared based on input from the private sector and trade unions, employers will be responsible to make a contribution of 20 per cent of basic salary in the Social Security Fund for social security of workers. And, there will be a provision of medical and accident insurance, among others, for workers.

Responding to demands of the private sector, the new labour law has become flexible toward employers. It has given employers the power to take disciplinary action on workers and cut down employees without taking permission from any government agency if employers face problems such as financial crisis, merger of two companies requiring limited workers, and other situations beyond control of employers. 

Shekhar Golchha, chairperson of the Employers’ Council of the Federation of Nepalese Chambers of Commerce and Industry said that both the new Labour Act and Social Security Act, which are in the pipeline are the best to improve labour relations and attract investment. “Since we are weak in implementation part, the real impact will be seen later,” he added.

Labour flexibility is the main issue raised by employers, and social security is the main concern of trade unions. After implementation of the new Labour Act, management staffs will not be allowed to take part in protests of workers and collective bargaining agreement. There will be restriction on keeping bonded labour, child workers and employment will be classified into four categories and Nepalis will be legally allowed to hire foreign workers.