Labour and Trade Union Act of Nepal

1992

Objectives

• To provide the employees and workers with job security

• To regulate the working conditions• To ensure the certain other benefits

available to them under the labor laws

Definitions

• Employee• Persons engaged in the administrative functions of the

enterprise• Worker

• Persons employed on the basis of remuneration to work in any building, premises, machinery or any part there of used for any production process or providing service, or any act relating to such work or for any unscheduled works and this expression also includes any worker working at a piece-rate, contract or agreement

Definition

• Proprietor• A person having final authority on the

activities of the Enterprise.• Manager

• A person appointed for performing the functions of an enterprise

Definitions

• Enterprise• Any factory, company, organization, association,

firm, or group there of, established under the prevailing laws for the purpose of operating any industry, profession, or service, where ten or more workers or employees are engaged.

Applicability

• The act is applicable whole of Nepal & extends to

• Every enterprise wherein, the number of workers or employees employed is 10

Employment and Security of Service

• Whenever employees are required, managers should advertise in order to select the employees and the selected employees should be provided with an appointment letter.

• Appointment letter should mention the remuneration to be provided to the employee with clear basic salary and allowances. (Current minimum basic scale= NPR 6205, Allowance= NPR 3495)

• The working hours should be clearly mentioned in the appointment letter. They should be deployed at work for no more than 8 hours a day with a ½ hr break within 5 hours of continuous work.

Employment and Security of Service

• Overtime should be paid for extra hours of work.• The probation period is one year where in if an

employee works for 240 days i.e. 8 months continuously (without leave), it qualifies as one year.

• One day should be provided as weekly holiday. And a total of 39 days as yearly holiday.

Employment and Security of Service

• Remuneration increment should be at least the employee’s half day’s remuneration

• As and when the employee is permanent, the enterprise should provide the employees with the benefit of provident fund.

Retrenchment and reinstatement

• Employees cannot be fired once they have been appointed unless the employee voluntarily leaves

• If retrenchment is required, the enterprise should take approval from the labor department with priority of newer employees to be removed first with a month’s notice and compensation as per labor law.

Conduct and Punishment

• Employees may be punished for offence with prior notice and a chance to submit clarification within seven days with following actions:• Reprimanded• To withheld annual grade increments• Suspend ( for maximum 3 months)• Termination

Other Benefits

• Settlement of Labor Dispute• Collective Bargaining

• Retirement Benefits• Health and Safety• Welfare Provision

Act 1992

(An act made to provide for the management of trade union)

Introduction

• An organization whose membership consists of workers and union leaders, united to protect and promote their common interest.

• provide a framework for a union to engage in collective bargaining for better workplace or business standards with employers

Objectives

• Improve the working condition• Establish a good relationship• Development of Enterprise• Protect and promote the rights and interest of

workers

Registration of Enterprise Level Trade Union

• Can be enforced at an enterprise containing 10 or more employees/workers.

• Register within 15 days• 25% of workers should be engaged

Registration of Trade Union Federation

• 10 Trade Union constitute a Trade Union Federation.

• Application with a copy of mutual agreement shall submit to the Registrar

• Registrar should register within fifteen days• One cannot be the member of more than one

Trade Union Federation at a time

Renewal of Trade Union

• A Trade Union of Enterprise level shall be required to renew in every two years

• A Trade Union Association and federation in every four years.

Authorized Trade Union

Authorized Trade Union shall be recognized for the collective bargaining with the management on behalf of the worker of the Trade Union.

Collective Bargaining

• A negotiation between an organization's management and Trade Union for salary, working condition and other matters and mutual interest.

• Collective bargaining is the fundamental principle on which the trade union system is based.

• Collective Bargaining is performed once in 2 years.

Cont..

•Trade Union can proceed a proposal of the employee to the management•Management are given 21 days to fulfill the proposed presentation•If not within 21 days then additional 15 days is added for negotiations•If not fulfilled then the Trade Union member can go for protest and negotiate