In an aggressive move to reform the country’s overall labour sector, the Ministry of Labour and Transport Management (MoLTM) is working to develop a Labour Reform Package (LRP). The package will bring entirely new labour related policies and acts.

According to an MoLTM source, the LRP will implement five labour-related laws including Labour Policy, Unemployment Benefit Act, Social Security Act, Bonus Policy and Labour Commission Act.

The source added that the ministry was trying to implement at least some of these labour laws within the current fiscal year. The budget of the current fiscal year has announced that industrial workers will receive compensation for workplace accident, reproductive health and health insurance across the country within the current fiscal year. “To provide workers these benefits, we have almost completed a draft of the Social Security Act and we will begin its implementation within the current fiscal year,” said Krishna Dhakal, director of the Social Security Fund Management Committee, a body formed under the MoLTM to carry out social security schemes. MoLTM spokesperson Purna Chandra Bhattarai said that these laws were being developed mainly to legitimize the March 24 pact between the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and three major trade unions.

Under the agreement, the trade unions had pledged to respect the conditions put forward by the employers including, hire and fire, no work, no pay and four-year industrial peace, among others. At the same time, the employers had agreed to contribute 20 percent of the total salary received by an individual worker to the social security fund. “These newly established provisions need to be included in the national law. This is also one of the reasons why the ministry is seriously working on implementing these laws,” said Bhattarai, who is also joint secretary of the MoLTM.

Sources also said that the upcoming Labour Policy would establish a provision to develop a factory inspection system and a labour inspection system. The existing policy, however, has mentioned only a factory inspector. He said that the LRP was being developed with the technical assistance of the International Labour Organization (ILO). “The ILO had pledged to help Nepal to enact effective labour laws last year, and it has been conducting research and studies since then,” he added. “Once it submits its report, we will begin drafting laws incorporating the ILO’s recommendations.” The ILO is scheduled to submit its report on Nov 14.

Nabin Pokharel, under secretary of the MoLTM, said that the ministry would introduce a new Labour Policy to replace the National Labour Policy 1999. “The existing policy has become so outdated that there is no chance of revising it, hence we are introducing a new policy in its place,” said Pokharel.

According to officials at the MoLTM, as numerous developments have taken place in the labour sector, like the recent employers-workers pact, demand for flexible labour laws and provisions for outsourcing, the policy needed to be updated urgently.

“The new policy will incorporate all these recent changes in the labour sector and legitimize them,” added Parajuli. Similarly, this is the first time that the ministry under the LRP is introducing Bonus Policy, Social Security Act and Labour Commission Act in the interest of labourers.

“These three laws are particularly meant for the welfare of all the workers in the country,” said Parajuli. He added with the implementation of the Labour Commission Act, the government was mulling forming a Central Labour Commission with semi-judicial authority.

Bishnu Remal, chairman of the General Federation of Nepalese Trade Unions (GEFONT), said that trade unions wanted prompt enactment of the new labour policies.

Published on: 10 November 2011 | The Kathmandu Post