TyroCity: Labour Law Notes

Probation Meaning and Legal Provisions

Labour Law Notes — Sun, 18 Aug 2013 05:41:42 +0000

Meaning:
“A probationary period is a stretch of time during which a new or existing employee receives extra supervision and coaching, either to learn a new job or to turn around a performance problem. The probationary period can be as short as a month or as long as a year, depending on the situation.“

Employers may require probationary periods for:

new employees (in this situation, it might be called an “introductory” period)
current employees who are promoted to a new position (particularly if it’s the employee’s first time serving in a supervisory or managerial position), or current employees with significant performance problems.

The process under prevailing legal provision:

Probation period as per the Section 16 of the Civil Service Act, 2049, While making fresh appointment to any permanent post of the civil service, such appointment shall be made on probation for a period of Six months in the case of a female civil employee, and one year, in the case of a male civil employee.

If his/her performance is not satisfactory during the probation period, his/her appointment may be canceled. The appointment of a civil employee whose appointment has not been so canceled shall be deemed to have ipso facto been confirmed on the expiration of the probation period.

Provided that, any employee who has already completed the probation period upon being once appointed permanently to a post in the civil service is appointed to another post and obtains the dispatch letters shall not be required to undergo the probation period again.

Under the Labor Act 2074, the Probationary period is Six months.

An appointment letter shall be provided with the name of the post of the worker or employee and his/her remuneration and conditions of service while making such an appointment. Information thereof shall also be provided to the Labour Office.

How long probation period of an employing entity will be -see the Writ No. 2866 of Sambat 2062 (Certiorari) decided by Joint Bench of Supreme court comprising of Hon. Justices Balaram K. C and Pawan Kumar Ojha. (Decision No. 7849. Ne.Ka.Pa. 2064).

Employment of Foreigners

Labour Law Notes — Sun, 18 Aug 2013 05:41:42 +0000

Every year Nepal labor market has to face 500,000 new job seekers. But the economy at present is unable to provide jobs and unemployment is more and more aggravated. In the declining trend of economic activities within the country, only option is the foreign employment and migration of the people. Thus Nepal is facing a situation-forced migration of workers in a mass scale. Conflict has created a situation of heavy displacement of workers and their families which has resulted into internal and international migration of the people. People are forced to migrate from their origin places to different places. But in the big multinational company’s foreigner are working as there are the different laws for the guidance of it. Similarly, same is the condition in the very informal sector as well where no any guidance is concentrated from the government side to date or if concentrated that is worthy of criticism.

More interestingly, the penetration of foreigners because of the porous border between Nepal and India is also reportedly noticed since long back. For an average Nepali, it is the heavy presence of foreign workers in the informal sector—carpentry, tailoring, plumbing, wiring, construction, you name it—that is robbing them of potential livelihood alternatives far more attractive than toiling in the Middle East or Malaysia.

The Ministry of Labor and Transport Management recently expressed serious concern over the increasing tendency of organizations to recruit foreigners without obtaining work permits from the Department of Labor (DoL). Indeed, Nepali citizens are being bypassed in favor of foreigners—from telecommunications companies to manufacturing firms to hydropower projects, including those with foreign investment.

The Labor act 2074 also prohibits Non-Nepalese citizen to be engaged at work in any of the posts which is the same as per the previous act. The New Labor Act continues the general terms of hiring of foreign nationals by a local entity that the foreign nationals can only be hired if the Nepalese citizen could not be available for any skilled technical post even after publishing an advertisement in the national level public newspapers and journals.

Foreign nationals need to obtain the work permit for being engaged in the work in Nepal as per sec 22 and 23 of the Labor Act, 2074 except in the following conditions:

Foreign nationals who are provided diplomatic immunity.
The arrangement as per treaty or agreement with the Government of Nepal.

Domestic Laws for the Employment of Foreign Nationals

The relevant Acts are the Nepal Petroleum Act 2040, the Industrial Enterprises Act 1992 and the Labor Act 1992, which, despite some contradictory provisions, allow recruitment of foreign workers only under strict conditions.

Nepal Petroleum Act, 2040 (1983)

Section 16: Subject to prior approval of the Department, foreign nationals may be employed in the conduct of Petroleum Operations if qualified and skilled Nepalese nationals are not available.

The Industrial Enterprises Act, 1992

Section 22: Industrial Manpower

The manpower required for any industry shall have to be recruited from among Nepali citizens.

Notwithstanding anything contained in sub-section (1) above, if any industry cannot be operated without person living outside his own country expatriate manpower, foreign nationals may be appointed in such industry with the prior approval of the Department of Labor for a maximum period of five years. If a person so appointed happens to be a technician of a special category but not available within Nepal, such person may, with the approval of the Department of Labor, be appointed for up to an additional period of five years.
A foreign national who is working in any industry pursuant to sub-section (2) above and who is from a country wherein convertible foreign currency is in circulation, may repatriate his salaries, allowances, emoluments, etc. in convertible foreign currency in an amount not exceeding seventy-five percent of such salaries, allowances and emoluments.

It requires “manpower” to be recruited from among Nepali citizens. It allows appointment of foreign manpower only if the industry cannot be operated without it, that too only with the prior approval of the DoL for a maximum period of five years. In the case the foreigner in question happens to be a technician of a special category but not available within Nepal, s/he may be appointed for up to an additional period of five years with the approval of the DoL.

The use of the word “manpower” in the Industrial Enterprises Act may raise questions about the provision’s coverage of labor categories. By contrast, the Labor Act covers both “employees” and “workers” in all enterprises employing 10 or more people, tea estates, and enterprises operating within industrial districts regardless of the number of people employed.

Trade Unions - Meaning, Objectives and Establishment

Labour Law Notes — Sun, 18 Aug 2013 05:41:42 +0000

A trade union is a collective organization of workers/employees which aim at promoting the welfare of their members, especially through securing higher wages and shorter working hours. As a rule, they developed in industrializing nations first among skilled workers, who were in relatively short supply and thus had greater bargaining power.

Trade unions are voluntary organizations of workers or employers formed to promote and protect their interest through collective action. The Trade Unions Act, 1926 defines a trade union as a combination, whether temporary of permanent, formed (i) primarily for the purpose of regulating the relation between (a) workmen and employers or (b) between workmen and workmen, or (c) between employer and employer, or (ii) for imposing restrictive conditions on the conduct of any trade or business, and includes any federation of two or more trade unions

Trade Unions are the organization established to protect the professional right and interests of wage earners.

To the workers

By the workers

Organization of the workers

Objectives of Trade Unions

1. Empowerment of workers:

welfare work= may collect fun for the benefit and welfare of the members for instance: ill health, old age, and funeral expenses, etc.
developing capacity: providing professional, paralegal training etc.

2. Collective bargaining:

The ongoing process of negotiation between representatives of workers and employers to establish the condition of employment. The collectively determined agreements may cover not only wages but hiring practices, layoffs, promotions job functions, working conditions and hours, worker discipline and termination, and benefit programs.

3. Advocacy: Building awareness on issues concerning workers right

4: Campaign and Action:

industrial action: trade unions may enforce strikes or resistance to lockout in furtherance of particular goals.
mass demonstration: formally against government policy

5. Lobbying: An effort for policy changing through technical dialogues.

6. Other political activities:

Trade unions may promote legislation favorable to the interest of their member or workers as a whole. To this end they may pursue campaign, undertake lobbying or, financially support individual candidates or parties (such as the labor party in Britain) for public office.

The legal framework of Union

To be the party of ILO, union rights should be provided and secure.

Trade Union Act 2049 made to regulate unions.

2051 - GEFONT and NTUC recognized as confederation.

Till 2061 - Unions are divided but after that unions united and on 2065 JTUCC established, now recognized.

Hierarchy of Trade Union

Authorized TU – Enterprises level T Us – Trade Union Federation- Trade Union Con-Federation

Trade Union as a legal personality

Be an autonomous and Corporate body having perpetual succession.

It shall have a seal of its own to carry out its activities.

May acquire, possess, dispose or manage its movable or immovable property.

It may sue or be sued under its name.

Work, Duty, and Function

Organizing
Policy intervention
involve in Law Making process
Collective Negotiation with employer and government
Call industrial action, if Necessary
Implementation of Labour laws
Protection of members and workers in general
Networking Nationally/internationally

Unions are involved in

Central Level Labour Advisory Council
Minimum Wage Fixation Board
Social Security Board
National Welfare Fund
Foreign Employment Promotion Board
Skill Development and training program of CTEVT
ILO Governing Body
National Development Council
Policy related other board and committee

Politics and Union

Union is the political organization to intervein policy of the state.
Union created party vs party created Union.
Nepalese Union is registered based on the bottom-up approach but closely working with the political party.
Strong union movement may change the society and living standards of the working-class.

Disciplinary action, Misconducts and Punishments

Labour Law Notes — Sun, 18 Aug 2013 05:41:42 +0000

The New Labor Act 2075 has redefined the punishment as it removed suspension as punishment and included salary deduction or withholding promotion as one of the forms of disciplinary action. The list of misconducts and disciplinary action will be as follows:

Chapter 20 Section 130 to 145
Reprimand/Warning (Section 131(1))

absence from the work without obtaining permission,
leaving the workplace without obtaining permission from the Managerial level,
coming late frequently without obtaining permission,
not abiding the order of the senior or employer with regard to work,
other misconducts as prescribed in Bylaws.

Deduction of one day’s remuneration (Section 131(2))

not accepting the letter or notice of punishment,
participation or compelling to participate in an illegal strike,
collectively delaying in the work,
causing loss to the entity by reducing the production or service recklessly or negligently,
trying to take facilities by submitting false details,
not using the security instruments provided by the employer,
Other similar misconducts as prescribed in Bylaws.

Withholding Annual Grade of Remuneration or Promotion (Section 131(3))

taking the entity’s property outside the entity or allowing an unauthorized person to use such without the permission of the competent person,
embezzlement with the entity’s transactions,
destroying the entity’s property due to negligence or recklessness,
preventing the supply of food and water in entity or obstructing movement in the entity,
abusing any items kept or arrangements made for interest, health and safety of the workers or employees or causing damage to them intentionally,
Other misconducts as prescribed in Bylaws.

Termination upon Misconduct (Section 131(4))

causing bodily harm or injury to Proprietor, Manager or Employee of the entity,
accepting or offering a bribe,
stealing the property of anyone in the entity,
embezzlement of property of the entity,
causing damage to the entity’s property knowingly
absence from entity for more than a consecutive period of 30 days without getting the leave approved
causing damage to secrecy relating to special technology of the Entity

Termination upon Misconduct (Section 131(4))

convicted on a criminal offense involving the moral turpitude,
presenting false documents for the appointment,
consuming psychotropic drugs or alcoholic drinks,
Having been punished twice for other misconducts within 3 years,
Other similar misconducts as prescribed in prevailing Nepal laws.

Procedure for Disciplinary Action

Seek an explanation from the employee: -give a letter stating the misconduct and punishment that is likely to be awarded, - provide 7 days time to submit the explanation
Time limitation for seeking explanation: within 2 months from the date of having obtained the knowledge of the occurrence of misconduct
Time limitation for Punishment: within 3 months from the date of requiring explanation. (Previously, within 2 months)
Authority to issue Punishment: Chief Executive Officer or the managerial level employee authorized by the Employee Bylaws.

INDUSTRIAL RELATIONS: Meaning and components

Labour Law Notes — Sun, 18 Aug 2013 05:41:42 +0000

INDUSTRIAL RELATIONS:

“Industry” refers to “any productive activity in which an individual (or a group of individuals) is (are) engaged”.
“Relations” means “the relationships that exist within the industry between the employer and his workmen.”
Industrial relations are the relationships between employees and employers within organizational settings.
The field of industrial relations looks at the relationship between management and workers, particularly groups of workers represented by a union.
Industrial relations are basically the interactions between employers, employees and the government, and the institutions and associations through which such interactions are mediated.
The relationships which arise at and out of the workplace generally include the relationships between individual workers, the relationships between workers and their employer, the relationships between employers, the relationships employers and workers have with the organizations formed to promote their respective interests, and the relations between those organizations, at all levels.
Industrial relations also includes the processes through which these relationships are expressed (such as, collective bargaining, workers’ participation in decision-making, and grievance and dispute settlement), and the management of conflict between employers, workers and Trade unions, when it arises.

Meaning of Industrial Relations:

The simple meaning of the industrial relations is the ways in which business relate to and deal with workers, the government and the public.
The detail meaning of the industrial relation can be given as follows:
- ”The dealings or relationship of a usually large business or industrial enterprise with its own workers, with labour in general, with government agencies or with public.”—Merrian Webster Dictionary
- ”The term “industrial relation” refers to all types of relations that exists in an enterprises, the employer and employee.”———-Fillippos
- “Industrial relation include individual relation and joint consultation between employees and people at the work, the place of work. Collective relations between employer and their organizations and the Unions and the part played by State in regulating those relations.”——-Richardron (Note: (Industrial relation means each employer has relation with their management. Joint consultation means negotiation of whole union)
- Bearing in mind to the above meaning, we can say that industrial relations cover all aspects of the employment relationship, including human resource management, employee relations, and union-management (or labor) relations.

Top 4 Major Components of Industrial Relation

1. Employees:

Among the participants to IR, employees are considered as the most affected one by the IR system prevalent in an organization. Employees with their various characteristics such as their commitment to the work and the organization, their educational and social background, their attitudes towards the management and so on affect and are affected by the system of IR.
Generally, employees perceive IR as a means to improve their conditions of employment, voice against any grievances, exchange views and ideas with management and participate in organizational decision making processes.
Employees participate in the IR system through their associations, or say, trade unions. Past evidences indicate that trade unions play a crucial role in making an IR system as effective or otherwise. Trade unions with their strong political and emotional overtones are looked upon as a tool to wrest concessions from employers.
Employees achieve following objectives:
- To redress the bargaining advantage on one-on-one basis, i.e., individual worker vis-a-vis individual employer by way of joint or collective actions.
- To secure better terms and conditions of employment for their members.
- To obtain improved status for the worker in his/her work.
- To increase democratic mode of decision-making at various levels

2. Employer:

Employer is the second party to IR. In the corporate organization, employer is represented by the management. Hence, management becomes responsible to various stakeholders in an organization including employees.
According to Cole, management has to see IR in terms of the following employee-employer relationship:
- Creating and sustaining employee motivation.
- Ensuring commitment from employees.
- Achieving higher levels of efficiency.
- Negotiating terms and conditions of employment with the representatives of employees.
- Sharing decision making with employees.
- Like employees’ associations, employers also form their associations at the local, industry and national levels. Examples of employers’ associations at all Nepal level are Chambers of Commerce’s and Industry (CCI), Federation of Nepalese Chambers of Commerce and Industry (FNCCI), etc.

The said employers organization is constituted for the following purposes:

Represent employers in collective bargaining at the national or industry level.
Develop machinery for avoiding disputes.
Provide feedback on employee relations.
Advise member organizations on the issues relating to IR.

3. Government:

The role of government in the matter of industrial relations has been changing along with changes in an industrial environment and management perspective. For example, till the century, the governments everywhere in the world adopted a policy of laissez-faire.
The IR matters were left to be settled by the employees and employers. But, towards the end of the 19 century, the attitude of the government in the changed conditions of conflicts between employees and employers, changed to some kind of intervention in the matter of IR.
In due course of realization, government intervention became a reality. As of day, government intervention has become widespread in HR matters. In India and Nepal government tries to regulate the relationship of employees and employers, and also keeps an eye on both groups to keep each in line. This relationship is enforced and maintained through labour courts, industrial tribunals, wage boards, investigating and enquiry committees, etc.

4. Consumer:
Ultimately, the user of the commodity or product is consumer. Services to the consumer should be good quality, not sub-standard quality; there should be reasonable price of goods for consumer, not high what they pay for that product. The consumer has the right that can challenge employer for the product in the Court.

Labour Law

Labour Law Notes — Sun, 18 Aug 2013 05:41:42 +0000

Introduction

Recruitment Process

Working Terms and Conditions

Disciplinary Action

Disciplinary action, Misconducts and Punishments

Welfare and Social Security

Occupational Health and Safety

Industrial Disputes

Trade Unions

Foreign Employment

Main Features of Foreign Employment Act 2064, Gaps and Challenges

Collective Bargaining and Legal Provisions

Labour Law Notes — Sun, 18 Aug 2013 05:41:42 +0000

It is a process in which employers and duly appointed representatives of the employees negotiate an agreement, pertaining to wages, hours, and other terms and conditions of employment.

Scope of Collective Bargaining:

Wages, hours, and other terms and conditions of employment

Three subjects

Mandatory
Permissive
Prohibited

Good-Faith Bargaining

Active participation in deliberations

Intention to find a basis for agreement

Sincere effort to reach common ground

Does not require either party to make a concession

Strikes

Any concerted stoppage, slowdown, or interruption of work.

Includes sick-outs and organized refusals to work.

Common law prohibited strikes by public utility employees.

Types of Strike

Economic Strikes
- Strikes over economic issues (e.g., wages)
Unfair labor practice strikes
- Strikes over illegal employer actions (e.g., refusal to bargain)
Wildcat strikes
- Strikes not approved by the union
Jurisdictional strikes
- Strikes in a dispute over the ownership of work
Sympathy strikes
- Expressions of support for other unions

Collective Bargaining in Nepal

Formation of Collective Bargaining Committee

The collective bargaining committee is formed by an authorized trade union or by the signature of 60 percent of workers in the absence of any trade union.

Excluded matters from Collective Demand

contrary to the Constitution of Nepal,
against the interest of others due to being baseless allegation,
prejudicial to the personal conduct of any worker or employee;
unrelated to the entity,
without expiry of the time of the collective bargaining agreement,
about the rate and benefit prescribed for social security.

Strike
If the dispute is not settled through mediation within 21 days the employees can go to strike giving seven (30) day notice if they do not agree for arbitration. Even the matter is referred to arbitration the employee may go to strike in certain situations as defined in the Labor Act.

Labor Act does not require a secret ballot to go for a strike. They can go for strike simply giving notice to the management and other security agencies.

Mandatory Arbitration for Collective Disputes

The Labor Act requires the disputed parties to settle the dispute by arbitration in certain situations or for certain entities depending upon their nature.

providing essential service, or
established in Special Economic Zone,
state of Emergency declared as per the Constitution.

The Arbitration Tribunal is composed of the Ministry constituting representatives of workers, employers and the Nepal Government. Any agreement between the Collective Bargaining Committee and Employer in regard to collective dispute or award of the arbitration tribunal is binding upon both the parties.

Lock Out

The requirement of Lock Out is mostly similar to that of the Previous Act that the management can lock out the entity in the case of an illegal strike or violent activities in the strike.

Remuneration during Strike and Lock Out

The employees are entitled to half remuneration during lawful strike or lawful Lock-Out. The employees are not entitled to any remuneration for an unlawful strike. Conversely, the employees are entitled to full remuneration during unlawful Lock-Out.

Special Provisions on Collective Dispute

Collective bargaining may be placed and settled not in each individual entity but jointly for all the industries in the same sector at the association level. In the situation, the individual industry is not required to deal with collective demand separately.

Government Intervention

The government has the authority to require the parties to settle any collective disputes at any stage through arbitration if it potentially triggers a financial crisis in the country or the government believes that the dispute should be settled through arbitration.

Composition of Labor Court

As per the Act, the Labor Court shall consist of a chairperson and two members. The jurisdiction of the Labor Court is exercised collectively where the majority opinion prevails.

Appeal

Any decision or order of the Department of Labor Office can be appealed at Labor Court within 35 days of such order or decision. Any decision of the entity terminating the employment or on disciplinary action can be appealed at Labor Court within 35 days of having obtained the notice of such decision.

Settlement of Dispute: Individual Claim (Section 113-115)

Submit a written application to the employer
The employer should settle the dispute by negotiating with the employee within 15 days of receipt of application
Such time period can be extended on mutual consent or agreement
Upon failure to settle the dispute or if the employer does not provide notice for negotiation, an application should be filed to Labor Office.
Labor Office should settle the dispute through discussion between the parties within 21 days.

Upon failure to settle the dispute through discussion, Labor Office issues the decision within 15 days of Dispute:

Collective Settlement Dispute

Authority to Submit the Collective Claim (Section 116):

Collective Bargaining Committee in an entity with 10 or more employees v- Group of representatives nominated by the authorized trade union of the entity v- Group of representatives nominated in consensus by all trade unions of the entity, where there is no authorized trade union v- Group of representatives supported by 60% or more employees by signing, where there is no group as provided above.

Submission of collective claim in writing to the employer
Upon the receipt of the collective claim, the employer must provide a notice in writing within 7 days specifying the place and time for discussion.
If the employer does not call for discussion or if the dispute is not settled through discussion within 21 days, an application can be submitted to the concerned Labor Office for mediation.
The dispute should be settled within 30 days by mediation by Labor Office.
Arbitration: Where cannot be settled through mediation, the dispute it is referred to arbitration in following conditions: - if an agreement is done between the collective bargaining committee and employer to settle the collective dispute through arbitration or - in case the collective dispute arises in an entity operating essential services or - in case the collective dispute arises in an entity operating in the Special Economic Zone or -- at the time strike has been prohibited during the time of emergency as per the Constitution.
The new Labor Act provides recognition to institutional level collective bargaining which had been in practice before. The trade union federations of the entrepreneurs, service sector, tea estate, travel, tourism, labor suppliers, construction entrepreneurs or industries of similar nature may from an institutional level present collective bargaining demands to the employers’ federation.

Collective Bargaining Agreement

Following arrangements may be done through Collective Agreement:

To reduce the remuneration of the employee (Section 34(3))
Arrangement for Interim Management during the transfer of ownership (Section 14(2))
To agree on certain facilities in lieu of overtime payment (Section 31(2))
To determine facilities for which the employer may deduct the remuneration (Section 38)
To determine the grounds of transfer of employees (Section 109(1))
Determination of rate of remuneration during the period of a legal strike or lockout (Section 127(3))
To add the grounds of termination upon misconduct (Section 133(2)
To determine the alternative option of retrenchment, and criteria and terms of retrenchment (Section 145(3))

Other Means: Collective Dispute

For Employees: Strike
For Employer: Lock Out

Strike (Section 121)

The Collective Bargaining Committee can strike for the settlement of collective dispute only in the following conditions:

– in the absence of compulsory requirement for arbitration,

failure of arbitrators to arbitrate,
failure to constitute arbitral tribunal within 21 days after the submission of application to the Ministry for settlement of collective dispute,
failure to arbitrate within the prescribed time,
– rejection to implement the arbitral award by the employer or legally challenging the arbitral award, and
disagreement of either of the parties to the arbitral award except where the arbitration is compulsory.

Notice of Strike:
outlining the claims and specifying the date to effect the strike:

30 days in prior
Information to Local Administration Bodies & Labor Office
Worker appointed or deputed on the duty of control, security and guard of the entity are not entitled to go in a strike during their duty hours.

Lock Out (Section 124)

The entity may declare a lock out after submitting justifications with its rationale and obtaining the approval of the Department when:

a strike has been started or continued without giving prior notice, or
if the collective dispute is not settled through the process provided in the New Labor Act

Notice of Lock Out:

a notice for the information of workers and employees specifying the date of seven days in advance effecting the lock-out and announcing that the entity shall be locked-out if the strike is not called off.
If there is a situation with possibility of damage destruction, to the Entity through riot, etc. from the workers and violence, employees during the strike, the lock-out may be declared.
In such a situation, the Labor Office or the Department and the Local Administration should be informed about the lock-out with reasons within three days.
The Local Administration should arrange for the necessary security arrangement immediately upon the receipt of such information.

Government Intervention (Section 124(5))

The Department can declare lockout as illegal at any time if:
the lockout appears irrational, or
it is likely to cause a breach in peace and security conditions of the country, or
it is contrary to the economic interests of country.

Payment of Remuneration during strike or lock out (Section 127)

Where the workers go in a strike contrary to the provisions of the prevailing laws, such workers are not entitled to any payment of remuneration.
Where the lockout is declared against the provision of the law, the workers are entitled to the full payment of remuneration for the period of such lockout.
In legal strike or lockout, the workers are entitled to half the remuneration, unless otherwise agreed in the collective agreement.

Regulating & Adjudicating Authority

Labor Office
Department of Labor
Labor Court

Composition of Labor Court

Member: 1 Chairperson and 2 members
Qualification of Chairperson & Members:
Judge of the High Court, or - Person qualified to be the judge of High Court
Tenure: 4 years except when the judge of the High Court are appointed
Functions, Duties, and Facilities of Chairperson and Members: Similar to those available to judges of High Court
Sanctions: Labor Office or Department
Supplying Labor without a license and engaging labor in work from such supplier: Fine up to NPR. 200,000
Engaging a foreign national in work without a work permit: Fine up to NPR. 200,000 depending upon the number of workers; repetition even after being punished shall be fined with an additional fine of NPR. 5,000 per person per month.
Discriminating among the workers: Fine up to NPR. 100,000 and the order to maintain the equality may be given.

Hours of Work

Labour Law Notes — Sun, 18 Aug 2013 05:41:42 +0000

Meaning of Hours of Work

ILO – Hours of Work (Commerce and Offices) Convention, 1930 (No. 30)

For the purpose of this Convention the term hours of work means

–the time during which the persons employed are at the disposal of the employer; it does not include rest periods during which the persons employed are not at the disposal of the employer.

The Working Time Regulation, 1998 (UK)

“working time”, in relation to a worker, means—

any period during which he is working, at his employer’s disposal and carrying out his activity or duties,
any period during which he is receiving relevant training, and
any additional period which is to be treated as working time for the purpose of these Regulations under a relevant agreement;

The rationale behind the standardizing working hours

“working excessive hours poses a danger to workers’ health and to their families” – ILO

-Individual health

physical

Mental

-Social capital

Time for family

Socio-cultural activity

-Industrial prosperity

direct – productivity (enhanced efficiency/industrial peace)

Indirect- employment generation

International Standards

Hours of Work (Industry) Convention, 1919 (No. 1)

Article 2 – The working hours of persons employed in any public or private industrial undertaking or in any branch thereof, other than an undertaking in which only members of the same family are employed, shall not exceed eight in the day and forty-eight in the week.

Hours of Work (Commerce and Offices) Convention, 1930 (No. 30)

Article 1 – This Convention shall apply to persons employed in the following establishments, whether public or private:

commercial or trading establishments, including postal, telegraph and telephone services and commercial or trading branches of any other establishments;
establishments and administrative services in which the persons employed are mainly engaged in office work;
mixed commercial and industrial establishments, unless they are deemed to be industrial establishments.

Hours of Work (Commerce and Offices) Convention, 1930 (No. 30) ….

Article 3 – The hours of work of persons to whom this Convention applies shall not exceed forty-eight hours in the week and eight hours in the day

Hours of Work (Commerce and Offices) Convention, 1930 (No. 30) ….

Article 3 – The hours of work of persons to whom this Convention applies shall not exceed forty-eight hours in the week and eight hours in the day.

Weekly Rest (Industry) Convention, 1921 (No. 14)

The whole of the staff employed in any industrial undertaking, public or private, or in any branch thereof shall … enjoy in every period of seven days a period of rest comprising at least twenty-four consecutive hours.
This period of rest shall, wherever possible, be granted simultaneously to the whole of the staff of each undertaking.
It shall, wherever possible, be fixed so as to coincide with the days already established by the traditions or customs of the country or district.

Weekly Rest (Commerce and Offices) Convention, 1957 (No. 106)

All persons to whom this Convention applies shall be entitled to an uninterrupted weekly rest period comprising not less than 24 hours in the course of each period of seven days.
The weekly rest period shall, wherever possible, be granted simultaneously to all the persons concerned in each establishment.
The weekly rest period shall wherever possible, coincide with the day of the week established as a day of rest by the traditions or customs of the country or district.
The traditions and customs of religious minorities shall, as far as possible, be respected.

As per section 28 of the labor act, 2074 Working hours shall be 8 hours a day and 48 hours a week.

As per sec 31, The overtime wages is to be one and half time of his/her ordinary rate of wages.

As per sec 30 of the new act, the maximum overtime has been increased to 24 hours a week.

श्रम ऐन, २०७४

दफा २९. बढी समय काम गर्न बाध्य गर्न नहुने :
(१) रोजगारदाताले दफा २८ को उपदफा (१) मा उल्लिखित समयभन्दा बढी समय हुने गरी श्रमिकलाई काम गर्न बाध्य पार्नु हँुदैन ।
(२) उपदफा (१) मा जुनसुकै कुरा लेखिएको भए तापनि कुनै काम सम्पन्न नहुँदा कसैको जीवन, सुरक्षा तथा स्वास्थ्यमा प्रतिकूल असर पर्न सक्ने वा रोजगारदातालाई गम्भीर हानी नोक्सानी हुने भएमा दफा ३० को उपदफा (१) को अधीनमा रही सम्बन्धित श्रमिकलाई अतिरिक्त समय काममा लगाउन सकिनेछ ।

दफा ३२. काम गर्ने समयको निर्धारण:
(१) श्रमिकको काम शुरु हुने र काम समाप्त हुने समय रोजगार सम्झौतामा उल्लेख भएकोमा सोही बमोजिम र नभएमा रोजगारदाताले निर्धारण गरे बमोजिम हुनेछ ।
(२) काम गर्ने समय सम्बन्धी अन्य व्यवस्था तोकिए बमोजिम हुनेछ ।
दफा ३३. यातायातको व्यवस्था मिलाउनु पर्नेः सूयासर््त भएपछि वा सूर्योदय हुनुभन्दा अघि कार्य समय प्रारम्भ वा समाप्त हुने गरी महिला श्रमिकलाई काममा लगाउँदा कार्यस्थलमा आउन तथा कार्यस्थलबाट फर्की जान रोजगारदाताले यातायातको आवश्यक व्यवस्था मिलाउनु पर्नेछ ।

दफा ३०. बढी समय काम लगाउने सम्बन्धी व्यवस्था:
(१) रोजगारदाताले कुनै श्रमिकलाई दफा २८ को अधीनमा रही निर्धारण गरेको कार्य समयभन्दा बढी समय काममा लगाउनु परेमा प्रतिदिन चार घण्टा र एक हप्तामा चौबीस घण्टाभन्दा बढी नहुने गरी लगाउन सकिनेछ ।
(२) रोजगारदाताले कुनै श्रमिकलाई दफा ४२ बमोजिम सट्टा बिदा नदिई लगाएको कामलाई बढी समय काम गरेको मानिनेछ ।

दफा ३१. अतिरिक्त पारिश्रमिक दिनु पर्ने:
(१) रोजगारदाताले श्रमिकलाई दफा ३० बमोजिम बढी समय काममा लगाउँदा नियमित रुपमा काम गर्दा पाउने आधारभूत पारिश्रमिकको डेढी पारिश्रमिक दिनु पर्नेछ ।
(२) उपदफा (१) मा जुनसुकै कुरा लेखिएको भए तापनि बढी समय काम गरेबापत पाउने अतिरिक्त पारिश्रमिकको सट्टामा सामूहिक सम्झौताले निश्चित सुविधा पाउने व्यवस्था गर्न वा व्यवस्थापकीय श्रेणीको श्रमिकको हकमा रोजगार सम्झौतामा उल्लेख भए बमोजिम सुविधा दिन यस दफामा लेखिएको कुराले बाधा पु¥याएको मानिने छैन ।

Nature of Employment Contract

Labour Law Notes — Sun, 18 Aug 2013 05:41:42 +0000

In simple terms a contract of employment is the agreement between employer and employee which governs the relationship between both parties. Employment contracts are formulated in the same manner as any other contract. The nature of an employment contract can be explained in the following chronology.

Offer and Acceptance:

a vacant position/job, constituted as the offer,
the acceptance is by the workman, consideration being the work to be done and salary/remuneration to be received (although consideration does not necessarily have to be in a monetary form) and intention to be legally bound.
an employee who makes an individual approach to an employer in relation to a job will be considered to be making an invitation to make an offer, rather than an actual offer. It must be appreciated that both offer and acceptance may be express or implied, oral or in writing. It may be inferred from the conduct of the parties.
However, it must be born in mind that failure to provide a written contract of employment results in a lack of clarity between the parties as neither party is aware of the precise extent of their respective rights, duties and obligations. The modern day, insisting on written contracts are a prudent action that can be taken by parties to employment.

Terms of a contract:
The contract should provide for the basic contention of remuneration and such other terms that both the employer and employee should abide by.

These terms can be; express terms which are specifically mentioned, either in writing or orally and have been agreed by both employer and employee; implied terms which are not set out in writing or agreed orally but such conduct from all parties are implied; statutory terms which are imposed, varied or regulated by law and incorporated terms.

Clauses of exclusivity:
It is practically and physically impossible for a person to hold several places of employment/jobs. However, there are certain professions where a person can provide their labour to several employers. In order to provide labour in such a manner, the contract of employment must include clauses of exclusivity.

Restraint of trade Clauses (Self-control clauses):
The earliest attitude towards restraint of trade clauses was to avoid all contracts which would prohibit or restrain any to use a lawful trade at any time or place.

However, the most common forms of restrictive covenants are those which prohibit, for a period of time, an employee whose employment has terminated, from:

setting up in business in competition with the employer;
working for a competitor of the employer;
interfering with the suppliers of, or supplies to, the employer;
canvassing, enticing or soliciting the customers of the employer;
dealing with the customers of the employer;
canvassing, enticing, inducing, soliciting or poaching the employees of the employer; and
disclosing or exploiting the confidential information or trade secrets of the employer.

Content of employment contract:

While recruiting worker or employee by the employer, the following matters to be mentioned in the employment contract.

Name of the Parties:
The employer’s organization details and the employee’s full name and address.

Start Date:
This is important as it also includes a brief statement to say that employment with a previous employer does not count towards the various rights that are gained by employees after one and two years of service. In other words the employee starts again from zero with the new employer.

Job Title and Description:
This usually follows the job title and description specified in any recruitment advertisement and subsequent offer letter.

Place of Work:
Allows the employer to specify the location where the employee will work. However, it also allows for the employer to specify any other location in the future.

Hours of Work:
The employee’s hours are specified within the contract, however the employee also agrees to work additional hours if the employer reasonably requests it. However, the hours cannot exceed the 48-hour per week as specified by the working time regulation.

Probationary Period:
The employer can specify a trial period for the employee with the option of a short notice period at the end of the trial, if the employee does not fulfill expectations. The employer can also extend the trial period.

Salary:
This details the employee’s gross salary before tax, national insurance and any deductions. It also specifies when payment is made.

Assessments:
The employer can state when the employee will receive their first work assessment and the timing of all subsequent regular assessments, for example every 12 months.

Deductions:
This clause detail all the circumstances in which the employer can make deductions from the employee’s salary.

Expenses:
The employer can agree with the employee, which work-related expenses will be covered and when the employee will be reimbursed. However to prevent errors and possible fraud the clause makes it clear that proof of payment is required.

Holidays:
This clause specifies when the holiday year will run from. This is important as the employer may wish to prevent employees taking busy work periods off, for example Dashai, Tihar, public holidays and other holidays entitled as per the laws and regulations so concerned.

This also includes further details regarding rolling-over holidays into the next year, restrictions on holidays where the employee has already given notice and on termination the pro-rata payment in lieu of any unused holiday entitlement.

Sickness & Disability:
Absence through sickness is a major cost burden on employers. This clause states by what time the employee must inform the employer that they will be unable to attend work. The clause also states when a doctor’s certificate is required and whether the employee will receive statutory or contractual sick pay.

Pension:
This clause states the pension provision – company pension scheme, a stakeholder pension scheme or whether the employment comes without a pension provision.

Notice:
The notice period to be given by either the employer or the employee. However, this clause also provides a detailed list of actions that constitute gross misconduct allowing the employer to dismiss without giving notice.

Restrictive Covenants:
This is only included within the Compact Law Long Employment Contracts. It protects all confidential and commercial information belonging to the employer. employer.

Prevents an employee from setting up a competing business whilst still employed. Also prevents an employee from competing for a set period of time and within a defined geographical area once they have left the employer.

The clause states that any breaches will entitle the employer to seek legal redress, including damages for any loss.

Grievance and Disciplinary Procedure:
This refers to the detailed separate Grievance and Disciplinary Policy that comes free with each Compact Law Employment Contract.

Retirement:
Refers to a separate Retirement Policy – which every organization should have in place .

Severability:
This standard paragraph states that each paragraph, sub-paragraph or clause is independent of each other, so if one is invalid or does not apply to the employee the rest of the contract remains valid.

Prior Agreements:
Another standard paragraph, stating the contract contains all the terms agreed between the employer and the employee and that no previous agreement (written or verbal) counts.

Jurisdiction:
Confirms the contract of employment comes under the jurisdiction of the English, Nepali, Indian courts etc.

Particulars of Employment:
Under Section 1 of the Employment Rights Act 1996 all employee contracts must set out the main terms of the contract in a separate schedule. This is so that the employee (and the employer) can easily refer to this schedule when they wish to remind themselves of the main terms.

Prior Agreements:
Another standard paragraph, stating the contract contains all the terms agreed between the employer and the employee and that no previous agreement (written or verbal) counts.

Jurisdiction:
Confirms the contract of employment comes under the jurisdiction of the English, Nepali, Indian courts etc.

Nepalese Legal System and International Standards regarding Trade Unions

Labour Law Notes — Sun, 18 Aug 2013 05:41:42 +0000

Definition of workers? Under the Trade Union Act 2049

A person working in the establishment or outside, In any Industry, Business, services, and shops as permanent temporary, contractual, daily-waged, piece rate, or under contractor including agricultural workers, self employees, Under new labor law, workers under all type of employment.

Labour Act 2074 Section 15(3)

Consultation with Authorized Trade Union or Labor Relation Committee for keeping the employees in reserve for more than 15 days.

Section 111 Formation of Labor Relation Committee.

Section 116 Formation of Collective Bargaining Committee.

International instruments relating to trade union:

At the end of World War I a new agreement appears, namely that the injustice in the social field endangers peace in the world, and that action against such injustice, therefore, serves the cause of this.

Freedom of association and protection of the rights to organize the convention, 1948(No.87)

Establishes the right of all workers and employers to form and join organizations of their own choosing without prior authorization, and lays down a series of guarantees and for the free function of the organization without interference by the public authorities.

Right to organize collective bargaining convention, 1949 (no.98)

Provides for protection against anti-union discrimination, for protection of workers’ and employers’ organizations against acts of interference by each other, and for measures to promote collective bargaining.

The ILO Declaration on Fundamental Principles and Rights at work (1998)

The 86th international Labor conference adopted ILO Declaration on Fundamental Principles and Rights at work, committing the organization’s member states to respect, to promote and to realize in good faith the right of workers and employers to freedom of association and the effective right to collective bargaining, and to wok towards the elimination of all forms of forced or compulsory labor, the effective abolition of child labor and elimination of discrimination in respect of employment and occupation. The declaration underlines that all member countries have an obligation to respect of employment and occupation. The declaration underlines that all member countries have an obligation to respect the fundamental principles involved, whether or not they have ratified the relevant conventions.

UN instruments:

“Everyone has the right to form and to join trade unions for the protection of his interests”

The state parties to the present Covenant undertake to ensure:
The right of everyone to form trade union of his choice, subject only to the rules of the organization concerned, for the promotion and protection of his economic and social interests. No restriction may be placed on the exercise of this right other than those prescribed by law and which are necessary in a democratic society in the interest of national security or public order or for the protection of rights and freedoms of others;
The right of trade unions to establish national federations or confederations and the right of the latter to form or join international trade union organization;
The right of trade unions to function freely subject to no limitation other than those prescribed by law and which are necessary in a democratic society in the interests of national security or public order or for the protection of the rights and freedoms of others;
The right to strike provided that it is exercised in conformity with the laws of the particular country.

Welfare and Social security

Labour Law Notes — Sun, 18 Aug 2013 05:41:42 +0000

Social security means security against any unfavorable condition. Social security primarily refers to a social insurance program providing social protection, or protection against socially recognized conditions, including poverty, old age, disability, unemployment and others.

Primarily social security means the security of income up to a minimum. Social security may provide for the welfare of person who became incapable of working by reason of old age sickness and invalidity and are unable to earn anything for their livelihood. It has been considered essential for workers, though with the development of the idea of welfare state, its scope should be widened to cover all sectors of society.

With the introduction of the industrialization and growth of society, it has been increasingly felt that the institution of social security should be established. Today, social insurance has spread throughout the world. It is an integral feature of social democracy.

According to Beveridge, social security means the security of an income to take the place of earning when they are interrupted by unemployment, sickness or accident to provide for retirement through age, to provide against loss of support by the death of another person and to meet exceptional expenditure such as these connected with birth’s death and marriage.

Meaning of Social Security

Social security is the security which the society as whole provides to its individual against the commons risks of life such as employment injury occupational disease invalidity or disablement ill health or sickness maternity or childbirth old age burial or funeral, widowhood orphans and unemployment etc which leads to income and their earning capacity without security, an average citizen can never live rather die peacefully because such risks are not only numerous but their incident is also fairly high in modern complex society.

The formal definition of ILO on social security read like this: basically, it can be taken to mean the protection which society provides for its members through a series of public measures, against the economic and social distress that otherwise would be caused by the stoppage or substantial reduction of earning resulting from (1) sickness, (2) maternity, (3) employment injury, (4) unemployment, (5) invalidity, (6) old age and (7) death; (8) the provision of medical care; and (9) the provision for families with children (ILO 1984).

Social Security Provided By
LABOR ACT, 2074

Weekly Holiday – 1 day every week
Public Holiday – 13 days including May day. Additional 1 day to female employees including Intl Women Labor Day. Annual Leave – 1 day for every 20 worked days.

Sick Leave
– Half paid up to 15 days. – Eligibility : Completion of 1 year of service.

Mourning Leave – 13 days

Leave in lieu – For the laborers put in work on a public holiday or weekly off.

Maternity Leave – Fully paid up to 60 days.

Paternity Leave – 15 days.

Leave is not a right! Under the Labour Rules, no employee can claim a leave as a matter of right. It should only be treated as a facility, which could be permitted by an employer. However, the court has by interpretation established that some kind of leave can be taken by an employee even if it is not authorized by the employer.

Change by collective bargaining: An employee working in the organization has the right to union. Ten or more employees working in an organization can form a Plant Level union. The Plant Level union has the right to submit a charter of demand and bargain collectively with the management. The collective agreement may change social security provisions of a particular organization. This can be settlement shall be valid for up to two year.

BENEFITS
LABOR ACT, 2074

Provident Fund Section: 52

– Employers Contribution: 10% of basic remuneration.

– Employees Contribution: 10% of basic remuneration. – Deposited to Social Security Fund. – Eligible since the first day of employment.

Gratuity Section: 53
– There is no such restriction for the duration of service in the entity for the calculation of the amount of Gratuity as per the new act.

– Rate: 8.33% of basic remuneration every month – Eligible from the first day of employment. – Amount to be deposited to the Social security Fund.

Leave Encashment Section:49

– Accumulated annual leave up to 90 days and sick leave up to 45 days can be encashedat the time of discontinuation of service

Severance Compensation Section: 145

– Rate: 1 month salary for every year of service – Eligible on a proportionate basis. – Not entitled to severance compensation if he/she is entitled to unemployment allowance under Social Security Act

OTHER BENEFITS
LABOR ACT, 2074

Festival Expenses Section: 37

– Amount equivalent to the monthly remuneration once a year. The employee not completing one year is entitled to the expenses on a proportional basis.

Compensation against injury

– Compensation is to be provided from the insurance amount.

Disability Compensation
– Employee or worker shall be paid from an insurance amount on the basis of the degree of disability.

Death Compensation

– The nearest successor is entitled to the amount of accident insurance as per the act.

Medical Insurance

– Coverage: At least 1 Lakh per year for every worker. Premium to be paid equally by the employer and worker. Accident Insurance

– Coverage: At least 7 Lakh for every worker. Premium to be paid fully by the employer.

Bonus – 10% of Net Profit.

Industrial Disputes: Settlement Machinery

Labour Law Notes — Sun, 18 Aug 2013 05:41:42 +0000

Conciliation: The practice by which the services of a neutral third party are used in a dispute as a means of helping the disputing parties to reduce the extent of their differences and to arrive at an amicable settlement or agreed solution.

Conciliation officer: an authority appointed by the government to mediate disputes between parties brought to his notice; enjoying the powers of a civil court. He is supposed to give judgment within 14 days of the commencement of the conciliation proceedings.

Conciliation Committee: The Board is an ad-hoc, tripartite body having the powers of a civil court created for a specific dispute(when the conciliation officer fails to resolve disputes within a time frame, the board is appointed)

Court of inquiry: In case the conciliation proceedings fail to resolve a dispute, a court of enquiry is constituted by the government to investigate the dispute.

TRADE DISPUTE SETTLEMENT

There are four techniques for trade dispute settlement:

Direct negotiation
Conciliation
Mediation
Arbitration

Direct Negotiation

An ideal technique to settle a dispute.
In this technique, parties that involved in trade disputes are willing to discuss until a mutual resolution is reached.
Trade dispute settlement that reached without any third-party intervention will maintain a harmonious relationship between employer and employees.
The Labour Act have encouraged employer and trade union to resolve any employment conflict through established internal machinery before referring it to conciliation or arbitration processes.
If the dispute cannot settle via direct negotiation, it can be settled via the conciliation process or arbitration process.

Conciliation
Definition – a third party intervention that coming in between parties in dispute with a view to resolving the dispute. A conciliator is a natural and unbiased party.

The Role of Labour office for Industrial Relation Conciliation

When a trade dispute exists or is apprehended, that dispute if not otherwise resolved may be reported to the Labour office:

The main role of the conciliator is to help dispute parties to reach a mutual settlement. The conciliator cannot force any parties involved to accept any suggestions.

Conciliator roles including:

Identifying the issue for the dispute.
Encourage a settlement through advising and construction of valid settlement alternatives.
Giving a consultation on dispute settlement technique in the attempt to help dispute parties generating settlement alternatives and selecting a reliable and valid settlement.

Mediation

This settlement method is not frequently used by organizations in settling disputes.
The mediator involves an organization from the private sector that becomes a middle-man (third party) in trade dispute settlement.

Many organizations less interested to use a mediator as a third party due to a high consultation cost and difficult to identify a natural, ethical, unbiased mediator.

Arbitration
Where a trade dispute exists and if that dispute is not otherwise resolved, refer the dispute for arbitration on the joint request by the trade union of workmen and employer / trade union of employer.

Labour Court

Established under the Labour Act.

Where a trade dispute exists or is apprehended, if that not otherwise resolved, the union of workmen or employer refers the disputes to the Court.

The reference to the Labour court could be the issues of both the Individual or Collective nature.

After the matter is referred to the Labour Court, the adjudication process begins.

A union is an organization formed for the purpose of representing its members in resolving conflicts with employers.
Labor relations is the management specialty emphasizing skills that managers and union leaders can use to minimize costly forms of conflict and to seek win-win solutions to disagreements.
Management goals are to increase the organization’s profits. Managers generally expect that unions will make these goals harder to achieve.
Labor unions have the goal of obtaining payment and working conditions that satisfy their members. They obtain these results by gaining power in numbers.
Society’s values have included the hope that the existence of unions will replace conflict or violence between workers and employers with fruitful negotiation.
In contrast to the traditional view that labor and management are adversaries, some organizations and unions work more cooperatively.