Labour market governance and working conditions in Nepal
A Decent Work Country Programme (DWCP) for Nepal defines a generation of productive employment for building sustained peace as its priority. One of the key outcomes of the DWCP is improved labor market governance for creating enabling environment for jobs. The thrust of the ILO strategy is to strengthen labour market governance through the establishment of effective and coherent national policies, institutions, mechanism and legal framework.
There is in Nepal, as in other countries, a long-standing debate on the extent to which the regulation of the labour market is facilitating or obstructing investment environment – investment being the source of job creation. The ILO facilitates tripartite dialogue on the law’s reform. The aim is to strike a politically and economically workable balance between flexibility, to adjust staffing needs to demand, and security and protection for workers.
The strategy for labour market reform is to work together with the tripartite constituents, focusing on the following thematic subject areas:
- To encourage investment and private sector development, consequently employment generation, the ILO will provide technical support to address the problems of labour law evasion and the critique of the existing law’s investment disincentive. The labour law reform will focus on dismissal provisions, use of contract workers, use of disguised employment, creation of a new industrial relations institution – National Labour Relations Commission (NLRC), establishment of a good faith collective bargaining, strike provisions and unlawful industrial action. The NLRC will have a variety of roles including the mediation, conciliation and arbitration of interest disputes and the settlement of rights disputes concerning claims of unfair dismissal. It will also be given a central role in establishing the minimum wage and minimum employment conditions.
- To minimize the resistance to greater flexibility of labour laws, the ILO will assist its constituents to devise an affordable and workable system of social protection, in particular, in the form of some income replacement for those who might lose out with the loosening of employment protection provisions of the current labour law. This system will involve: the creation of a new unemployment insurance scheme, improvement of the existing universal pension, and introduction of child benefits. The existing Provident Fund will be examined carefully at a later stage.
- To substantially improve the implementation of the labour law and to fairly, promptly and peacefully pre-empt or settle industrial disputes, the ILO will help the Government re-build the institutions of labour administration, develop manuals of procedures for labour inspection, provide training to labour officials and labour inspectors at all levels.