New Labour Act

Kathmandu, Jan 16-The bill drafting committee under the Office of the Prime Minister and the Council of Ministers has finally approved the second amendment ordinance of the Labour Act 2048 BS with major changes in the Act. A meeting of the Committee, headed by Law Minister Niranjan Thapa, on Friday finalised the Labour Act second amendment ordinance 2062 BS, according to sources at the PMO Himalaya times reports .

Other members of the committee included minister for Information and Communication, minister and secretaries of the Ministry of Labour and Transport Management, secretary at the Ministry of General Administration and experts from the Finance Ministry, the National Planning Commission and the office of the Attorney General. The ordinance would be sent back to the cabinet for its final approval and it would come into effect once it receives a royal seal. Earlier, the council of ministers had sent it to the Committee for further consideration.

The amendment allows appointment of non-Nepali nationals as managers, executive directors and experts in firms opened with FDI. There is no such provision in the existing Act. Appointment of non-Nepali nationals in the FDI-aided firm, however, should not exceed more than 15 per cent of the total number of employees, says the ordinance. “This is one of the major changes the ordinance has made to attract FDI in the country,” said a secretary involved in the meeting of the Committee. The official said the ordinance is more FDI-friendly. The ordinance has given leverage to the management of a firm about hiring and firing of employees. A private firm will have the rights to hire a person on contract or piece-rate basis and his/her job will automatically terminate after the job comes to an end. The existing Act has, however, a provision of keeping an employee on a probation period for one year. An independent panel will be set up to determine a minimum salary of an employee. The existing Act has a provision under which the government decides the employees’ salary. It has also given the management the rights for complete or partial shut down of the firm and lay-off of employees under “special condition”. But the firm will require to inform the government three months before closing it down or laying off employees.

A new firm, formed after the merger of two of more firms, will have the same rights as per its requirements. If the employees decide to go for a strike, they will have to inform management 30 days in advance with a proposal passed by a two-thirds majority of votes of employees. But it should be handed over to management through an authorised trade union.