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.

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.

Labour welfare draft

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

Social Welfare connotes the welfare of the entire Society.

Labour Welfare is a narrow concept concerned with welfare of workers.

Labour Welfare is an important dimension of industrial relation. It includes overall welfare facilities designed to take care of the well being of employees and in order to increase their living standards.

It can also be provided by government, non-government agencies, and trade unions.

Employee Welfare

To give expression to philanthropic and paternalistic feelings.
To win over employees loyalty and increase their morale.
To combat trade unionism and socialist ideas.
To build up stable labour force, to reduce labour turnover and absenteeism.
To develop efficiency and productivity among workers.
To save oneself from heavy taxes on surplus profits.
To earn goodwill and enhance public image.
To reduce the threat of further government intervention.
To make recruitment more effective (because these benefits add to job appeal).
The service should satisfy the real needs of the workers.

Scope of Labour Law

Work Environment
Health Facilities
General Welfare Programs
Economic Welfare Programs
Labour Welfare Programs

The Management of workplace Health and safety

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

Importance of management commitment

In order to develop a successful health and safety programme, it is essential that there be strong management commitment and strong worker participation in the effort to create and maintain a safe and healthy workplace. Effective management addresses all work-related hazards, not only those covered by government standards.
All levels of management must make health and safety a priority. They must communicate this by going out into the worksite to talk with workers about their concerns and to observe work procedures and equipment. In each workplace, the lines of responsibility from top to bottom need to be clear, and workers should know who is responsible for different health and safety issues.

The importance of training

Workers often experience work-related health problems and do not realize that the problems are related to their work, particularly when an occupational disease, for example, is in the early stages.
Besides the other more obvious benefits of training, such as skills development, hazard recognition, etc., a comprehensive training program in each workplace will help workers to:
recognize early signs/symptoms of any potential occupational diseases before they become permanent conditions;
assess their work environment;
insist that management make changes before hazardous conditions can develop.

Specific Training Needs

Hazard recognition
Training required in standards
Emergency response
Accident investigation
Emergency

Role of the health and safety representative

As health and safety representative your role is to work proactively (this means taking action beforehazards become a problem) to prevent workers from being exposed to occupational hazards. You can do this by making sure management eliminates hazards or keeps them under control when they cannot be eliminated.

Steps to help you reach your goals are:

Be well informed about the various hazards in your workplace and the possible solutions for controlling those hazards.
Work together with the worker’s representatives/ union and the employer to identify and control hazards.
You may occasionally need to share some of this information with your supervisors and employer in the process of working towards a safe and healthy workplace.

Being a health and safety representative is not always easy, but helping to protect the lives of your fellow workers is worth all the time and effort you put into the job.

Hazards Prevention Planning

Maintain the facility and equipment
Emergency planning
- Training and drills, as needed
Medical program
- First aid on site
- Physician and emergency care nearby

Supervisors Responsibility

Analyze work to identify potential hazards in area of responsibility
Maintain physical protections in work areas
Reinforce employee training through performance feedback and, if needed, enforcement of safe work practices

Completion of Recruitment Process

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

The recruitment process deemed to have been completed fulfilling the following process:

Defining the role,
Person specification/job profile,
Attracting applications,
Application forms,
CVs,
Dealing with applications,
The ‘candidate experience,
Selecting candidates,
Making appointments,
References,
Medical examinations,
Employment offer,
Joining the Organization,
Documentation.

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)

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.

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

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

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.

Holiday and Leave

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

Meaning of holidays:

A holiday is a day set aside by custom or by law on which normal activities, especially business or work, are suspended or reduced. Generally, holidays are intended to allow individuals to celebrate or commemorate an event or tradition of cultural or religious significance. Holidays may be designated by governments, religious institutions, or other groups or organizations. The degree to which normal activities are reduced by a holiday may depend on local laws, customs, the type of job being held or even personal choices.

Concept of holidays:

The concept of holidays often originated in connection with religious observances.
The intention of a holiday was typical to allow individuals to tend to religious duties associated with important dates on the calendar.
In many societies, there are important distinctions between holidays designated by governments and holidays designated by religious institutions. For example, in many predominantly Christian nations, Hindu nations, Buddhist Nations, etc. government-designed holidays may center on Christian holidays, Hinduism, Muslims, Buddhists observe religious holidays associated with their faith.

Eligibility:

The worker or employee is entitled to holidays as per the terms and conditions of his/her employment contract that was concluded with the employer. Generally, such types of holidays shall be as prescribed in the Laws and Regulations. Leave is not a matter of right; it is only a privilege.

The authority to sanction leave may, in the keeping of view the work of the Enterprise, refuse to sanction leave, postpone utilization thereof, make a deduction or cancel any sanctioned leave.

Prevailing legal provision about holidays (leave):

Generally, holidays are given to the worker or employees as per the laws and regulations of the concerned laws and regulations of services. Such as civil servants, security personnel and others are entitled to holidays as per their sector-wise laws and regulations. Worker or labor or employee working in enterprises or productive sectors shall be governed by labor laws and regulations and entitled holidays as per the laws and regulations.

NATURE OF LEAVE LABORACT, 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 for the leave : 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 – 98 days. Fully paid up to 60 days.

Paternity Leave – 15 days. Fully Paid

International standard of working hours:

The regulation of working time is one of the oldest concerns of labour legislation. Already in the early 19th century it was recognized that working excessive hours posed a danger to workers’ health and to their families. The very first ILO Convention, adopted in 1919 (see below), limited hours of work and provided for adequate rest periods for workers. Today, ILO standards on working time provide the framework for regulated hours of work, daily and weekly rest periods, and annual holidays. These instruments ensure high productivity while safeguarding workers’ physical and mental health. Standards on part-time work have become increasingly important instruments for addressing such issues as job creation and promoting equality between men and women.