Chandan Kumar Mandal

Labour rights organisations have slammed employers for not showing interest in enrolling their firms and employees with the Contribution Based Social Security Scheme. Labour rights activists representing various trade unions blamed the private sector employers for the dismal progress in registration under the scheme, launched in November last year for protecting and securing employees working in the formal private sector.

“When the scheme was announced, it was hailed as the beginning of a new era for workers in the country,” said Binod Shrestha, president of the General Federation of Nepalese Trade Unions. “Now looking at its implementation, we can see it has not achieved the expected progress so far.”

According to the Social Security Fund, 4,092 business firms and 35,500 workers have enrolled under the welfare scheme which has to cover nearly 3.5 million formal private-sector workers.

“Employers are telling lies so that they can keep their workers away from the coverage of the scheme,” said Jagat Simkhada, acting president of the All Nepal Trade Union Federation, at a programme organised by the Joint Trade Union Coordination Committee, the umbrella organisation of all the labour unions in the country.

“Many employers are threatening their staff with lay-offs if they press for implementing the programme. Some employers have told their workers that joining this scheme would not be in favour of the workers,” said Simkhada. “We will shut down such business houses if the labour law and social security scheme are not implemented.”

Under the contribution-based scheme, the government will provide health, accident and maternity coverage to workers employed in the formal private sector.

For accessing these coverages, both the employer and the employee must register and contribute to the scheme. An amount equivalent to 31 per cent of the workers’ basic monthly salary—11 per cent deducted from their monthly salary and 20 per cent employer’s contribution—will go to the Social Security Fund.

When the scheme was rolled out amidst excessive fanfare that invited both praise and criticism, all three parties—government, workers and employers—had described the programme as a landmark and comprehensive one for workers’ welfare and expressed their commitment for its implementation from one stage.

“Are the employers willing to walk away from the tripartite agreement on the scheme?” said Mahendra Yadav, general secretary of the Nepal Trade Union Congress.

Others argued that as the government policies and programmes like the scheme, which has been brought out for the welfare of workers, should be implemented at any cost since they are a form of state law.

The scheme has seen a lukewarm response from the employer side, whereas the government faces the tall task of roping in nearly 900,000 private firms, which are at least officially registered.

According to Bharat Raj Acharya, vice-chairman of the Employer’s Council of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), the response so far to the scheme has been encouraging.

“This is a new programme, so it will need some time before people become aware of it. Big companies have already registered,” said Acharya.

Another employer representative Hansa Ram Pandey, deputy director-general of the FNCCI secretariat, said that small and medium level industries should be given more time for joining the scheme as they have small labour force and resources.

Ram Prasad Ghimire, joint secretary at the Ministry of Labour, Employment and Social Security, criticised the employers for not taking up the scheme under various pretexts.

“Small industries not enrolling under the scheme should not be an excuse for big employers for not joining the programme. They should instead be concerned about their responsibilities of covering their workers,” said Ghimire. According to Ghimire, the government will strictly implement the scheme this year as all required policies were prepared last year.

“There should be some assurance at least in the beginning for encouraging employers and workers to take up the scheme. There is also a feeling among workers that the government was trying to hold their money,” said Deepak Shrestha, chairperson of industry committee under the Nepal Chamber of Commerce.

All the private sector firms must be registered with the scheme by mid-October this year, but the private sector also worries that it might add an additional financial burden on them.

“There is nothing for employer sector to be scared of,” said Labour Minister Gokarna Bista. “It’s only 1.67 per cent of the additional burden for employers which have already been providing pension and gratuity amount.”

 Published on: 26 August 2019 | The Kathmandu Post