TyroCity: Labour Law Notes

Occupational Health and Safety – Meaning, Rationale

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

Occupational health and safety is a discipline with a broad scope involving many specialized fields. In its broadest sense, it should aim at:

the promotion and maintenance of the highest degree of physical, mental and social well-being of workers in all occupations;
the prevention among workers of adverse effects on health caused by their working conditions;
the protection of workers in their employment from risks resulting from factors adverse to health;
the placing and maintenance of workers in an occupational environment adapted to physical and mental needs;
the adaptation of work to humans.
In other words, occupational health and safety encompass the social, mental and physical well-being of workers, which is the “whole person”.

Poor working conditions affect worker health and safety

Poor working conditions of any type have the potential to affect a worker’s health and safety.
Unhealthy or unsafe working conditions are not limited to factories — they can be found anywhere, whether the workplace is indoors or outdoors. For many workers, such as agricultural workers or miners, the workplace is “outdoors” and can pose many health and safety hazards.
Poor working conditions can also affect the environment workers live in, since the working and living environments are the same for many workers. This means that occupational hazards can have harmful effects on workers, their families, and other people in the community, as well as on the physical environment around the workplace.
A classic example is the use of pesticides in agricultural work. Workers can be exposed to toxic chemicals in a number of ways when spraying pesticides: they can inhale the chemicals during and after spraying, the chemicals can be absorbed through the skin, and the workers can ingest the chemicals if they eat, drink, or smoke without first washing their hands, or if drinking water has become contaminated with the chemicals. The workers’ families can also be exposed in a number of ways: they can inhale the pesticides which may linger in the air, they can drink contaminated water, or they can be exposed to residues which may be on the worker’s clothes. Other people in the community can all be exposed in the same ways as well. When the chemicals get absorbed into the soil or leach into groundwater supplies, the adverse effects on the natural environment can be permanent.

Benefits of Effective Safety and Health Program

Reduce work-related injuries and illnesses
Improve morale and productivity
Reduce workers’ compensation costs

*Why is occupational health and safety important? *

Work plays a central role in people’s lives, since most workers spend at least eight hours a day in the workplace, whether it is on a plantation, in an office, factory, etc. Therefore, work environments should be safe and healthy. Yet this is not the case for many workers.
Every day workers all over the world are faced with a multitude of health hazards, such as:
- dusts;
- gases;
- noise;
- vibration;
- extreme temperatures.

Costs of occupational injury/disease

For workers some of the direct costsof an injury or illness are:
- the pain and suffering of the injury or illness;
- the loss of income;
- the possible loss of a job;
- health-care costs.

The costs to employers

Occupational accidents or illnesses are also estimated to be enormous. For a small business, the cost of even one accident can be a financial disaster. For employers, some of the direct costs are:

payment for work not performed;
medical and compensation payments;
repair or replacement of damaged machinery and equipment;
reduction or a temporary halt in production;
increased training expenses and administration costs;
possible reduction in the quality of work;
negative effect on morale in other workers.

Some of the indirect costs for employers are:

the injured/ill worker has to be replaced;
a new worker has to be trained and given time to adjust;
it takes time before the new worker is producing at the rate of the original worker;
time must be devoted to obligatory investigations, to the writing of reports and filling out of forms;
accidents often arouse the concern of fellow workers and influence labour relations in a negative way;
poor health and safety conditions in the workplace can also result in poor public relations.
Overall, the costs of most work-related accidents or illnesses to workers and their families and to employers are very high.

Health and safety programs

For all of the reasons given above, it is crucial that employers, workers, and unions are committed to health and safety and that:
workplace hazards are controlled – at the source whenever possible;
records of any exposure are maintained for many years;
both workers and employers are informed about health and safety risks in the workplace;
there is an active and effective health and safety committee that includes both workers and management;
worker health and safety efforts are ongoing.
Occupational health and safety encompass the social, mental and physical well-being of workers in all occupations.
Poor working conditions have the potential to affect a worker’s health and safety.
Unhealthy or unsafe working conditions can be found anywhere, whether the workplace is indoors or outdoors.
Employers have a moral and often legal responsibility to protect workers.
Work-related accidents and diseases are common in all parts of the world and often have many direct and indirect negative consequences for workers and their families. A single accident or illness can mean enormous financial loss to both workers and employers.
Effective workplace health and safety programmes can help to save the lives of workers by reducing hazards and their consequences. Effective programmes can also have positive effects on both worker morale and productivity and can save employers a great deal of money.

The extent of the problem worldwide

1. Accidents

In general, health and safety in the workplace have improved in most industrialized countries over the past 20 to 30 years. However, the situation in developing countries is relatively unclear largely because of inadequate accident and disease recognition, record-keeping and reporting mechanisms.
It is estimated that at least 250 million occupational accidents occur every year worldwide. 335,000 of these accidents are fatal (result in death). (Since many countries do not have accurate record-keeping and reporting mechanisms, it can be assumed that the real figures are much higher than this.) The number of fatal accidents is much higher in developing countries than in industrialized ones.

2. Diseases

Some occupational diseases have been recognized for many years, and affect workers in different ways depending on the nature of the hazard, the route of exposure, the dose, etc. Some well known occupational diseases include:
asbestosis (caused by asbestos, which is common in insulation, automobile brake linings, etc.)
silicosis (caused by silica, which is common in mining, sandblasting, etc.);
lead poisoning (caused by lead, which is common in battery plants, paint factories, etc.);
and noise-induced hearing loss (caused by noise, which is common in many workplaces, including airports, and workplaces where noisy machines, such as presses or drills, etc. are used).
There are also a number of potentially crippling health problems that can be associated with poor working conditions, including:–heart disease;–musculoskeletal disorders such as permanent back injuries or muscle disorders;
- allergies;
- reproductive problems;
- stress-related disorders.
There are at least 250 million occupational accidents every year worldwide, at least 335,000 of which result in death.
Developing countries have more fatal accidents than industrialized nations, emphasizing the need for health and safety education programs that focus on prevention.
Some occupational diseases have been recognized for many years and affect workers in different ways. Such diseases are still problems in all parts of the world.
The numbers of work-related diseases in developing countries are much higher in reality than the numbers that are reported.
The number of cases and types of occupational diseases are increasing in both developing and industrialized countries.
It is often difficult to identify the cause of both occupational accidents and diseases.

Identifying the cause of occupational disease

The cause of work-related diseases is very often difficult to determine. One factor is the latency period (the fact that it may take years before the disease produces an obvious effect on the worker’s health).
By the time the disease is identified, it may be too late to do anything about it or to find out what hazards the worker was exposed to in the past. Other factors such as changing jobs, or personal behaviors (such as smoking tobacco or drinking alcohol) further increase the difficulty of linking workplace exposure to a disease outcome.
Although more is understood now about some occupational hazards than in the past, every year new chemicals and new technologies are being introduced which present new and often unknown hazards to both workers and the community. These new and unknown hazards present great challenges to workers, employers, educators, and scientists, that is to everyone concerned about workers’ health and the effects that hazardous agents have on the environment.

3. The range of hazards

There is an unlimited number of hazards that can be found in almost any workplace. There are obvious unsafe working conditions, such as unguarded machinery, slippery floors or inadequate fire precautions, but there are also a number of categories of insidious hazards (that is, those hazards that are dangerous but which may not be obvious) including:
chemical hazards, arising from liquids, solids, dusts, fumes, vapours and gases;
physical hazards, such as noise, vibration, unsatisfactory lighting, radiation and extreme temperatures;
biological hazards, such as bacteria, viruses, infectious waste and infestations;
psychological hazards resulting from stress and strain;
hazards associated with the non-application of ergonomic principles, for example badly designed machinery, mechanical devices and tools used by workers, improper seating and workstation design, or poorly designed work practices.

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.

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.

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.

Security of Service - Retrenchment, Resignation, layoff and Compulsory Retirement

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

Security of Service:

In an ILO report from 2001, and an earlier ILO report from 1995, uses the following definition of employment security for wage and salaried workers as follows:

Employment security generally refers to protection against unfair or unjustified dismissals. According to the most commonly used definition, “employment security means that workers have protection against arbitrary and short notice dismissal from employment, as well as having long-term contracts of employment and having employment relations that avoid casualization.”
Job Security is an assurance that an individual will keep his or her job without the risk of becoming unemploye- S/he will have continuity in employment and it may be from the terms of a contract of employment, collective bargaining agreement, or labor legislation that prevents arbitrary termination.
Job security may depend on economy, prevailing business conditions, and the individual’s personal capacity. Employees have more job security in times of economic expansion and less in times of a recession. Normally, government jobs and jobs in education, healthcare and law enforcement are considered very secure. Private sector jobs are generally believed to offer lower job security.
The service of any permanent worker or employee may not be terminated without following the procedures prescribed by this Act or the Rules or Bylaws made under this Act. (Section 10 of the Act)

Retrenchment

Retrenchment simply means the reduction or cutting back on expenditure to achieve financial stability. By retrenchment, means reducing the workforce to enable the company/organization to be financially viable and healthy. In other words, to be able to function as an entity, it is inevitable that the company/organization reduce its workforce by ‘retrenching’ (terminating) some of its employees. Hence, retrenchment means cutting off or cut down, reduce, or diminish; curtailment (expenses). According to labor law, retrenchment refers to the reduction or cutting off the employees.

Retrenchment (Section 145)

Reasons of Retrenchment: -Due to harsh economic conditions, -Due to increment in number of employees as a result of merger, -Due to other conditions.
Notice: 30 days prior notice specifying the reasons for retrenchment, possible date of retrenchment and likely number of employees to be retrenched should be provided to Labor Office and authorized trade union of the entity, if any or effective trade union or Labor Relation Committee.
Employees can be retrenched after reaching a consensus with the Trade Union or Labor Relation Committee.
Where such a trade union or Labor Relation Committee does not exist or where the consensus cannot be reached, the employees can be retrenched by giving information to the Labor Office.
These provisions of the New Labor Act on retrenchment are not applicable to entities in Special Economic Zone or when the entity is partially or fully closed by the order of Labor Court or Government of Nepal.
Priority in Retrenchment:

Retrenchment shall be generally done in the following order:

Foreign Nationals
Employee subjected to disciplinary action more often in comparison
Employee with poor work performance
Employees last appointed among employees engaged in similar nature of work. However, the employer may retrench an employee appointed earlier by providing reasons thereof.
- Unless otherwise agreed with the trade union, members of the Collective Bargaining Committee or authorized trade union shall be retrenched at last.

Case relating to retrenchment:

Section 12 of Labour Act has provided some grounds for retrenchment process in any enterprise. Supreme Court had clarified the retrenchment provision of the Act with its illustration in the landmark case of Purusottam Bhandari v. Ministry of Labour and Transportation and others[1] which was a certiorari writ.

Fact of the case:

An employee, Purusottam Bhandari, junior clerk, who had been made permanent after completion of the trial period, is curtailed by the Necon Air Limited as per approval of the application from the government authority for retrenchment of employees as the company is suffering from loss.

In this case there are three law in issue. Section 12 of the Labour Act, 2048 which deals with the process and manner of retrenchment under special circumstances with approval from government authority another is Article 11 of the Constitution of kingdom of Nepal, 2047 which states about right to equality as all are equal before law and the last one is Section 34 of the Evidence Act, 2031deals with provision of estoppels which restricts denial of already accepted fact.

Claim of petitioner:

Necon Air being a profitable private airline company has not suffered any loss that there is no any condition arouses as to curtail employees under special circumstances under section 12 of the Labour Act. The application provided to Labour Department and labour office dealt with number of planes which is not true. The decision of the government was executed after 4 months and under installment employees were curtaile- The company and the government authority ignored the rule of giving priority in curtailment for those who had joined lately. Further the labour department ignored right to information when the petitioner demanded the copy of the decision of application provided by the company. There is no situation of loss and the situation does not come under special circumstances under section 12 of the Act that the company cannot curtail its employees arbitrarily. The decision of the company as well as approbation by the government authority to execute the decision should be made invalid with issuance of mandamus and certiorari by the court.

Defendant’s submission:

The Company has suffered loss as its two airplanes were damaged by accident; three others were grounded in the airport, The Company is in no position to fulfill the administrative cost of all employees. So under the provision of section 12 of the Labour Act, company had applied for curtailment of its employees and the authority upon investigation had granted permission for the same. Further no any other employee who had curtailed filed a petition. The company had retrenched the employees putting in priority list where the late joined come first. Even Purusottam Bhandari in one hand accepted all his facilities provided by the company under curtailment. He could not claim for any kind of injustice in curtailment as per section 34 of the Evidence Act—the provision of estoppels.

The decision of the case:

For the purpose of Section 11 and 12 the “Special Circumstances” shall mean damage, break down or failure of machines of the enterprise and thereby causing stoppage in the production or failure in the supply of fuel, electricity, coal or similar energy or due to natural calamity or insufficient supply of raw materials or stockpiling of the produced goods due to decline in sale or other similar situations.

As the company’s two airplanes had already faced an accident, three were grounded; it is obvious that the company is suffering from loss. Further, the company is bound to fulfill all the administrative costs including remunerations to the employees, being in loss it could not manage its economic liabilities which s definitely a special circumstance. The court cannot issue an order to recruit a fixed number of employees in any industry.

It is observed that the Necon Air limited has fulfilled the condition as stated in law and it is found that through various documentary transactions between government and the Company, the governments had examined the situation and approve the curtailment of employees. Further, as per rule, the employees who had joined later were curtailed.

Again Purusottam Bhandari had already taken all the facilities provided by the company on curtailment which shows his acceptance to the decision made by the company.

There is no ground for granting the order as demanded by the petitioner rather the writ is quashed.

[1] Writ No. 3232/2058, Decision No. 7545, Nepal Law Journal 2062, pg. 626

RETIREMENT

Compulsory Retirement Before the Amendment:

As per the sec 15 of Labor act, 2048 the proprietor may compulsorily retire any worker or employee who has crossed the age of fifty-five years. Provided that he/she may extend the period of service of any worker or an employee by five years, in case the worker or employee is indispensable for the operation of the functions.

After the Amendment: As per sec 147 of the New Labor Act, it has increased the age of compulsory retirement and can be retired after the age of 58 years.

Time-Bound Employee-Sec 140: As per the new act, the employee can be terminated after the expiry of the time period provided in the employment agreement.

Work-Based Employee-Sec 140: According to the new act, the employee can be terminated after the completion of the work specified in the employment agreement.

Lack of Performance-Sec 142: The employment of a worker may be terminated by the employer if the performance of the employee is found unsatisfactory in the performance appraisal for three or more times.

On the ground of bad health-Sec 143: The employer may terminate the employment of an employee upon the recommendation of a medical practitioner if: – an employee is physically or mentally disabled or injured – rendering him/her unable to work – requiring a long period for medical treatment effecting in the work of the entity.

Termination by Notice-Sec 144: The employee or employer terminating the employment should provide the notice except in the situation of termination by dismissal.

Resignation:

If a worker or employee intends to resign his or her post voluntarily, he or she tender resignation in writing with the office or enterprises where he or she is serving.
The office with which resignation has been tendered as above has to be got identified by the concerned employee.
The employer or official having identified the resignation so tendered by a worker or employee approve the resignation.
The procedure and mode of approval of resignation of the resignation tender by a worker or employee shall be as prescribed in the laws and regulations so concerne-
Layoff and compulsory retirement: old provisions

The Proprietor may layoff or compulsorily retire any worker or employee who has crossed the age of fifty five years.

Provided that he/she may extend the period of service of any worker or an employee by five years, in case the worker or employee. (Section 12 of the Act)

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.

Stages of Recruitment

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

What is recruitment?

Recruitment is the process of having the right person, in the right place, at the right time.
Recruitment is a critical activity, not just for the HR team but also for line managers who are increasingly involved in the selection process.
All those involved in recruitment activities should be equipped with the appropriate knowledge and skills.
Recruitment is not only carried out to fulfill current needs. It should always be aware and refer to future plans that have implications for organizational resourcing. Recruiters also be fully aware of equal opportunities legislation and understand how discrimination can occur both directly and indirectly in the recruitment process

The recruitment process involves working through a series of stages such as:

Defining the role:

Job analysis :

Before recruiting for a new or existing position, it’s important to invest time in gathering information about making up the job, job’s purpose, the outputs required by the job holder and how it fits into the organization’s structure . The job analysis be made as follows.

Job description:

This explains the job to candidates and helps the recruitment process by providing a clear guide to all involved about the requirements of the job.

Latest thinking suggests that job descriptions should focus on the work someone needs to achieve rather than the skills and experience, as this is more likely to result in choosing someone with the right abilities.

Person specification/job profile:

A person specification or job profile states the necessary and desirable criteria for selection. Increasingly such specifications are based on a set of competencies identified as necessary for the performance of the job.

As per the Sub-sections (1) and (2) of Section 3 of the Labour Act, 2049, the Proprietor shall classify the job of the workers and employees of the Enterprise according to the nature of production process, service or functions of the Enterprise and shall provide the information thereof to the concerned Labour Office .

If the classification done pursuant to Sub-section (1) requires any amendment, the Labour Officer may, stating the reasons thereof, issue a directive to the Proprietor and it shall be the duty of the Proprietor to abide by such directive.

Attracting applications:

There are mostly two methods to generate interest from potential candidates those are as follows.

Internal methods:

It’s important not to forget the internal talent pool when recruiting. Providing opportunities for development and career progression increases employee engagement and retention and supports succession planning.

Employee referral schemes:

These schemes usually offer an incentive to existing employees to assist in the recruitment of friends or contacts. But employers should not rely on such schemes at the expense of attracting a diverse workforce and they should complement other methods.

External methods:

Survey indicates that the most popular methods for seeking candidates include employer’s corporate website, recruitment agencies, commercial job boards, mass media and professional networking sites such as LinkedIn. There is growing expectation from candidates to be able to search and apply for jobs online and via mobile devices. Advertisements should be clear and indicate:

requirements of the job
necessary and desirable criteria for job applicants (to limit the number of inappropriate applications received)
the organization’s activities
job location
reward package
job tenure (for example, contract length) details of how to apply and the deadline

External recruitment services:

Some organizations use external providers to assist with their recruitment such as recruitment agencies or consultants and they offer employers a range of services – attracting candidates, managing candidate responses, screening, and shortlisting, or running assessment centres on the employer’s behalf.

As per the Section 4 of the Labour Act, 2049 of Nepal in cases where it is required to appoint a worker or employee in any post classified pursuant to Section 3, the Manager Shall have to advertise in order to select such a worker or employee and the worker or employee so selected.

Managing the application and selection process: There are two main formats in which applications are likely to be received those are as follows.

Application forms:

Application forms allow for information to be presented in a consistent format, and therefore make it easier to collect information from job applicants in a systematic way and assess objectively the candidate’s suitability for the job.

CVs:

CVs make it possible for candidates to include lots of additional, irrelevant material which may make them harder to assess consistently.

Dealing with applications:

All applications should be treated confidentially and circulated only to those individuals involved in the recruitment process.

The ‘candidate experience’
The experience of candidates (both successful and unsuccessful) at each stage of the recruitment process will impact on their view of the organization. This could be both from the perspective of a potential employee and, depending on the nature of the business, as a customer.

Selecting candidates:

Selecting candidates involves two main processes: shortlisting and assessing applicants to decide who should be offered a job.

Selection decisions should be made having used appropriate tools, time and resources. Selection should be made on the basis of relevant to the job and the business objectives of the organization.

Making the appointment:
Before making an offer of employment, employers have responsibility for checking that applicants have the right to work in the country so advertised such as Nepal, India, UK etc. and are appropriate for the work.

References:

A recruitment policy should state clearly how references will be used, when in the recruitment process they will be taken up and what kind of references will be necessary (for example, from former employers).

Medical examinations:

It is unlawful to ask candidates to complete a medical questionnaire before being offered a job. Only essential medical issues should be discussed at this stage.

Employment offer:

Offers of employment should always be made in writing. But it is important to be aware that a verbal offer of employment made in an interview is as legally binding as a letter to the candidate.

Joining the organization:

Well-planned induction enables new employees to become fully operational quickly and should be integrated into the recruitment process.

Documentation:

The recruitment process should be documented accurately and access limited to recruitment staff for confidentiality reasons.

Remuneration

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

Merriam-Webster’s Learner’s Dictionary

“An amount of money paid to someone for the work that person has done .”

As per the Clause(r) of Section 2 of the Labour Act ” Remuneration” means the remuneration or wage to be received in cash or kind from the Enterprise by the worker or employee for the works performed in the Enterprise and this expression also includes any amount to be received in cash or kind for the works done under piece-rate or contract. Provided that, this expression does not include any kind of allowance or facility.

Standard-setting of remuneration:
It was found that the standard-setting of wages or remuneration was based on the following principles

1. Subsistence theory of wages:

Labour Economist named Ricardo propounded this theory.
The main theme is wages or remuneration be provided to a worker or an employee only that is required for their living.
More wages or remuneration, increase there more interest and demand.
More population be burden to the State.
Lassele states this principle as Iron Low Wages.

2. Standard living theory of wages:

The subsistence theory of wages failed within the 19th Century and emerged this theory.
While determining the wages or remuneration of a worker or an employee, it should be determined on the basis of the requirement that is required or adequate for their livelihood.
It accepts the principle that the standard of living of a worker or employee directly helps to increase production.

3. The wages fund theory:

Stuart Mill propounded this theory.
The main theory is that the management has to establish a fund by allocating the separate amounts to wages or remuneration to a worker or an employee and the average wages or remuneration to be given to an employee or a worker can be determined by dividing the amount so allocated to the fund.
This concept is based on the remuneration fund and the number of workers or employees and wages or remuneration supplied.

4. Demand and supply theory:

The main theme is that in which center there will be demand and supply becomes equal, the wages or remuneration of worker or employee should be fixed or determined bearing in mind to same center.

5. The residual claim and theory of wages:

This theory was propounded by American economist Walker.
The main them of this theory is that the wages or remuneration should be determined from an amount that is due to having deducted the expenses incurred to the total production.
The concept of this principle is that increase incapacity of a worker or employees increase wages or remuneration.

6. Marginal productivity theory:

The main theme of this principle is that the manufacturer has to give wages or remuneration to workers or employees equally to the margin of the production. It is found that most enterprises have accepted this principle.

Presently, it has been found that the following principle has been practiced bearing in mind the above principles as regards wages or remuneration.

1. Concept of minimum wages:

The main theme of this principle is that the minimum wages or remuneration that is required for the living of workers or employees in the present society shall be required to be given by the employer. It states the lodging, food, clothing, educational, medical and other facilities that are required to worker or employee to be given.
This concept believes that have not (Poverty) breaches peace in the enterprises so to maintain peace, minimum wages or remuneration be given to worker or enterprises.

2. Concept of fair wages or remuneration:

The main theme of this principle is that the wages or remuneration should be determined differently or more wages than the minimum wages or remuneration to be given to worker or employee.

3. Living wages system:

The main theme of this theory is that wages or remuneration be determined on the basis of the needs of a family of workers or employees.

Such need includes food, shelter, clothes, education to children, health care, social security, etc.
This theory refers the standard of living that is obtaining by worker or employee of the developed countries and this one is best wages or remuneration obtaining by worker or employee.

Wages or remuneration in Nepal:

Labour Act 2074
पारिश्रमिक सम्बन्धी व्यवस्था

३४. श्रमिकले पारिश्रमिक पाउने:

(१) प्रत्येक श्रमिकले काम शुरु गरेको मितिदेखि पारिश्रमिक तथा सुविधा पाउनेछ ।

(२) श्रमिकले पाउने पारिश्रमिक तथा सुविधा यो ऐन तथा यस ऐन अन्तर्गत बनेको नियममा तोकिएभन्दा कम नहुने गरी रोजगार सम्झौतामा उल्लेख भए बमोजिम हुनेछ ।

(३) रोजगारदाता र श्रमिकबीचको सामूहिक सम्झौतामा उल्लेख गरिएको अवस्थामा बाहेक श्रमिकले खाईपाई आएको पारिश्रमिक तथा सुविधा घटाउन पाइने छैन ।

३५. पारिश्रमिक भुक्तानी:

(१) रोजगारदाताले श्रमिकलाई पारिश्रमिक भुक्तानी गर्दा रोजगार सम्झौतामा उल्लेख भएकोमा सोही बमोजिम र उल्लेख नभएकोमा रोजगारदाताले निर्धारण गरेको समयमा गर्नु पर्नेछ । तर देहायको श्रमिकलाई देहाय बमोजिम पारिश्रमिक भुक्तानी गर्नु पर्र्नेछ ः–

(क) एक महिनाभन्दा कम अवधि काम गर्ने श्रमिकलाई काम समाप्त भएको मितिले तीन दिनभित्र, र (ख) आकस्मिक काम गर्ने श्रमिकलाई काम समाप्त हुनासाथ ।

(२) उपदफा (१) मा जुनसुकै कुरा लेखिएको भए तापनि पारिश्रमिक भुक्तानी गर्ने समयको बीचको अन्तर एक महिनाभन्दा बढी हुने छैन ।

३६. वार्षिक तलब वृद्धि (ग्रेड) पाउने: एक वर्षको सेवा अवधि पूरा गरेको श्रमिकले मासिकरुपमा पाउने आधारभूत पारिश्रमिकको कम्तीमा आधा दिनकोे पारिश्रमिक बराबरको रकम प्रत्येक वर्ष वार्षिक तलब वृद्धि (ग्रेड) पाउनेछ ।

३७. चार्डपर्व खर्च पाउने:

(१) आफ्नो धर्म, संस्कृति तथा परम्परा अनुसार मनाइने चाडपर्वको लागि प्रत्येक श्रमिकले खाईपाई आएको एक महिनाको आधारभूत पारिश्रमिक बराबरको रकम प्रत्येक वर्ष चाडपर्व खर्चको रूपमा पाउनेछ ।

(२) उपदफा (१) बमोजिमको चाडपर्व खर्च श्रमिकले एक आर्थिक वर्षमा एकपटक आफ्नो धर्म, संस्कृति, परम्परा अनुसार मनाइने मुख्य चाडपर्वको अवसरमा भुक्तानी लिन रोजगारदाता समक्ष लिखित अनुरोध गर्न सक्नेछ । त्यस्तो अनुरोध नगरेको अवस्थामा प्रत्येक वर्षको बडादशंैमा चाडपर्व खर्च भुक्तानी दिनु पर्नेछ ।

(३) चाडपर्व खर्च भुक्तानी दिइने दिनसम्ममा एक वर्ष सेवा अवधि पूरा नभएको श्रमिकले निजले गरेको सेवा अवधिको अनुपातमा चाडपर्व खर्च पाउनेछ ।

Labour Law Meaning

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

Labour law is the term used to described the varied body of law applied to such matters as employment, remuneration, condition of work, trade unions, and labour management relations. In its most comprehensive sense it also included old age and disability insurance. Again unlike the laws of contract, tort, or property, the elements of labour laws are less homogeneous then the rule governing the particular legal relationship. Labour law, which is also a branch of sociological jurisprudence, is essentially an abridgement on the right of freedom of contract. It was to regulate the industrial sector and balance the labour and management relations.

Labour law is the term used to describe the varied body of law applied to such matter as employment, individual employment, wages and remuneration, conditions of work, trade unions, health safety and welfare, social security and labour management relation, the administration of labour law and special provision for particular occupational or other group.

However, there are two broad categories of labour law. First, collective labour law relates to the tripartite relationship between employee, employer and union. Second, individual labour law concerns employees’ rights at work and through the contract for work. The labour movement has been instrumental in the enacting of laws protecting labour rights in the 19th and 20th centuries. Labour rights have been integral to the social and economic development since the Industrial Revolution. Employment standards are social norms for the minimum socially acceptable conditions under which employees or contractors will work.

The labour law helps to protect the weaker section of people in the employment contract so that no employees get exploited by the employer being subordinate in the contractual relationship. Labour law protects working environment, ensures rights of the employees, console the clashes between employees and employers.

In addition to individual contractual relations growing out of the traditional employment situation, labour laws deals with the statutory requirements and collective contractual relation that are increasingly important in mass- production societies, the legal relation between organized economic interests and the state, and the various rights and obligation relating to some type of social services.

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.