"FNCCI and major trade unions have yet to reach an agreement and FNCCI has asked us to bring a unified conclusion" -- Nabin Pokhrel, Ministry of Labour and Tranport

"We are not satisfied with this one sided decision, as it should have been made with the consent of all three parties." -- Suraj Vaidya, president of FNCCI

"Any deal without the involvement of major trade unions and private sector is incomplete."-- Baburam Gautam, ANTUF

The frequent showdown of labour unions and the hindrances to smooth running of industries place a huge question mark on the future of industrial development and economic growth of Nepal -an already politically troubled country with a struggling economy.

On March 24, a deal was cut for wage hike of the labourers -a result of agitation jointly organised by General Federation of Nepalese Trade Unions (GEFONT), Nepal Trade Union Congress Independent (NTUCI) and All Nepal Trade Union Federation (ANTUF). However, Tarai-based trade unions disagreed and demanded a 100 per cent hike. As if the recurring strikes by trade unions and disputes among themselves were not enough, the current row between private sector and government regarding minimum wage agreement endorsed by government on April 16 poses another obstacle in which the government only focused on hiking wages from Rs 1,500 to Rs 1,600.

Previously discussed important points, such as industrial peace for a period of four years, were left out. While the agreement to increase wages was made between the Ministry of Labour and Transport Management and trade unions associated with Tarai-based political parties, private sector and leading trade unions were left out of the picture. The role of government was to act as a mediator but the current situation shows it over stepped its role and function.

“The gazette only focuses on the welfare of workers, whereas the industrial sector also comprises of industrialists. We are not satisfied with this one sided decision, as it should have been made with the consent of all three parties. Such lopsided decisions will result in further confusion and problems for the industrial sector. Frankly , it has already created a crisis of consent when it comes to government,“ says Suraj Vaidya, president of FNCCI.

He says, “We cannot trust the government anymore, as we have already asked it to address the issue several times, but to no avail. We cannot afford to pay the increased amount and we feel that the valid deal should also address the issue of industrial peace for four years as it should be implemented to entrust a sense of security for any kind of investment. The four years' deal of `no strikes' is for the benefit of the entire industrial sector. On a day of closure, the government loses revenue of around Rs 1 billion, so what is the point in not emphasising the solution to such unproductive hours?” Stating that they will not compromise on industrial welfare but are open to sorting out further valid issues anytime, he added, “The country already witnesses a work force of around 1,000 people leaving it as foreign labourers each day and such turmoil in the industrial sector will further accelerate this rate. Also, if the government does not cooperate with us, we will be forced to -although unwillingly -close our industries.”

Multinational companies such as Dabur and Nepal Unilever are facing unlimited problems due to strikes organised by Maoist affiliated labour unions demanding a minimum pay of Rs 10,000 (nearly USD 140) per month -up from the current Rs 6,100. The Nepali economy in the last decade grew sluggishly at around 3.5 per cent with unstable political environment and shortage of electricity as major contributors that demoralised industrialists -not to mention, the never ending labour activities, unsecured environment that discourages investment and other problems in smooth operation of an industry.

Pashupati Murarka, vicepresident of FNCCI and coordinator of Employer Council under FNCCI, says, “The initial deal was done in mutual understanding. We had focused on issues of social security too, since the agreement between the FNCCI and major trade unions declared the next four years as industrial peace years barring strikes in the industrial sector. However, this point is nowhere in implementation, while the wage has been increased. As we are unsure about the security of our investment, we do not agree to increase the wage.“ He further clarified that they are happy to implement the social security fund regulations but are against any decisions taken by government alone as government's role is just to mediate.

“As the government turns a deaf ear to our objections on the issue, we are preparing to challenge it in the court,“ he informed.

Currently, the private sector is seriously affected by insecurity, forced donation, strikes and shutdowns, which have dragged down both production and productivity .

Tulsi Siwakoti, chairman of GEFONT (Bagmati), says, “As the government has already passed the gazette regarding increased wage and majority of industries have already regulated it, there is no point in defying it now.“

However, he adds that their concern regarding the issue related to declaration of industrial peace for four years is valid, as strikes and any other hindrances result in decrease of overall productivity. “All we need is a secure future; moreover, we also need to prove now that our voices get heard without any demonstration. We are ready to ensure 100 per cent productivity if our rational demands are addressed.“

Amidst all this chaos, Maoist's wing ANTUF also laid bare its internal dispute by splitting itself into three factions, indicating politicisation of the trade unions. However, the organisation now claims to be unified and also objects to the five-point deal between government and minor trade unions in unison. Baburam Gautam, exvice chairman of dissolved ANTUF says, “Any deal carried out and agreed upon without involvement of official representatives of major trade unions and private sector is incomplete. The five points are not even a deal; they have been put forward as recommendation. This can invite unfortunate incidents in the future as it does not fulfil even basic formalities.“

He adds, “There were conflicts within our trade union in the previous deal, but it was resolved through understanding.

Now, it is a big and unfortunate step taken foolishly by the government alone.“

The government, however, claims to have played fair. Nabin Pokhrel, senior factory inspector at Ministry of Labour and Tranport Management says, “FNCCI and major trade unions have yet to reach an agreement and FNCCI has asked us to bring a unified conclusion and its officials have also signed a document on May 12 stating that Ministry can give a conclusive shape to the problem. The gazette of government is based on that and does address all the issues.”

Despite labour acts, labour court, enough labour force, 47 per cent of population still seeking employment, and an unfavourable balance of trade, industries are closing or shut down on a regular basis. Something is terribly wrong with our labour policies yet nothing is being done to rectify it. Highly politicised and increasingly assertive trade union activities are sending out a negative message to investors and over-politicisation of labour will result in the economy and the nation paying the price.

Published on: 12 June 2011 | The Himalayan Times