Industrial disputes

BY SAMRAKT DHAKAL

INDUSTRIAL RELATIONS samraktnpdh@yahoo.com
UNIT 1 INTRODUCTION
CONCEPT
The term ‘Industrial Relations’ comprises of two terms: ‘Industry’ and ‘Relations’. “Industry” refers to
“any productive activity in which an individual (or a group of individuals) is (are) engaged”. By
“relations” we mean “the relationships that exist within the industry between the employer and his
workmen.”

The term industrial relations explain the relationship between employees and management which stem
directly or indirectly from union-employer relationship.
Industrial relations are the relationships between employees and employers within the organizational
settings. The field of industrial relations looks at the relationship between management and workers,
particularly groups of workers represented by a union. Industrial relations are basically the interactions
between employers, employees and the government, and the institutions and associations through
which such interactions are mediated.
The term industrial relations have a broad as well as a narrow outlook. Originally, industrial relations
were broadly defined to include the relationships and interactions between employers and employees.
From this perspective, industrial relations cover all aspects of the employment relationship, including
human resource management, employee relations, and union-management (or labor) relations. Now its
meaning has become more specific and restricted. Accordingly, industrial relations pertains to the study
and practice of collective bargaining, trade unionism, and labor-management relations, while human
resource management is a separate, largely distinct field that deals with nonunion employment
relationships and the personnel practices and policies of employers.
The relationships which arise at and out of the workplace generally include the relationships between
individual workers, the relationships between workers and their employer, the relationships between
employers, the relationships employers and workers have with the organizations formed to promote
their respective interests, and the relations between those organizations, at all levels. Industrial
relations also includes the processes through which these relationships are expressed (such as,
collective bargaining, workers’ participation in decision-making, and grievance and dispute settlement),
and the management of conflict between employers, workers and trade unions, when it arises.
An industrial relations system consists of the whole gamut of relationships between employees and
employees and employers which are managed by the means of conflict and cooperation.
A sound industrial relations system is one in which relationships between management and employees
(and their representatives) on the one hand, and between them and the State on the other, are more
harmonious and cooperative than conflictual and creates an environment conducive to economic

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efficiency and the motivation, productivity and development of the employee and generates employee
loyalty and mutual trust.
PURPOSE OF IR
The main objectives of industrial relations system are: To safeguard the interest of labor and management by securing the highest level of mutual
understanding and good-will among all those sections in the industry which participate in the
process of production.
To avoid industrial conflict or strife and develop harmonious relations, which are an essential
factor in the productivity of workers and the industrial progress of a country.
 raise productivity to a higher level in an era of full employment by lessening the tendency to
To
high turnover and frequency absenteeism.

 To establish and promote the growth of an industrial democracy based on labor partnership
in the sharing of profits and of managerial decisions, so that ban individuals personality may
grow its full stature for the benefit of the industry and of the country as well.
 To eliminate or minimize the number of strikes, lockouts and gheraos by providing
reasonable wages, improved living and working conditions, said fringe benefits.
 To improve the economic conditions of workers in the existing state of industrial
managements and political government.
 Socialization of industries by making the state itself a major employer
 Vesting of a proprietary interest of the workers in the industries in which they are
employed.
The healthy industrial relations are key to the progress and success. Their significance may be
discussed as under –
Uninterrupted production – The most important benefit of industrial relations is that this
ensures continuity of production. This means, continuous employment for all from manager to
workers. The resources are fully utilized, resulting in the maximum possible production. There is
uninterrupted flow of income for all. Smooth running of an industry is of vital importance for
several other industries; to other industries if the products are intermediaries or inputs; to
exporters if these are export goods; to consumers and workers, if these are goods of mass
consumption.

Reduction in Industrial Disputes – Good industrial relations reduce the industrial disputes.
Disputes are reflections of the failure of basic human urges or motivations to secure adequate

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satisfaction or expression which are fully cured by good industrial relations. Strikes, lockouts, goslow tactics, gherao and grievances are some of the reflections of industrial unrest which do not
spring up in an atmosphere of industrial peace. It helps promoting co-operation and increasing
production.
High morale – Good industrial relations improve the morale of the employees. Employees work
with great zeal with the feeling in mind that the interest of employer and employees is one and the
same, i.e. to increase production. Every worker feels that he is a co-owner of the gains of industry.
The employer in his turn must realize that the gains of industry are not for him along but they
should be shared equally and generously with his workers. In other words, complete unity of
thought and action is the main achievement of industrial peace. It increases the place of workers in
the society and their ego is satisfied. It naturally affects production because mighty co-operative
efforts alone can produce great results.
Mental Revolution – The main object of industrial relation is a complete mental revolution of
workers and employees. The industrial peace lies ultimately in a transformed outlook on the part of
both. It is the business of leadership in the ranks of workers, employees and Government to work
out a new relationship in consonance with a spirit of true democracy. Both should think themselves
as partners of the industry and the role of workers in such a partnership should be recognized. On
the other hand, workers must recognize employer’s authority. It will naturally have impact on
production because they recognize the interest of each other.
Reduced Wastage – Good industrial relations are maintained on the basis of cooperation and
recognition of each other. It will help increase production. Wastages of man, material and machines
are reduced to the minimum and thus national interest is protected.
Thus, it is evident that good industrial relations are the basis of higher production with minimum
cost and higher profits. It also results in increased efficiency of workers. New and new projects may
be introduced for the welfare of the workers and to promote the morale of the people at work. An
economy organized for planned production and distribution, aiming at the realization of social
justice and welfare of the massage can function effectively only in an atmosphere of industrial
peace. If the twin objectives of rapid national development and increased social justice are to be
achieved, there must be harmonious relationship between management and labor.

ACTORS IN IR
Employers:
Employers possess certain rights vis-à-vis labors. They have the right to hire and fire them.
Management can also affect workers’ interests by exercising their right to relocate, close or merge the
factory or to introduce technological changes.

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Employees: Workers seek to improve the terms and conditions of their employment. They exchange
views with management and voice their grievances. They also want to share decision making powers of
management. Workers generally unite to form unions against the management and get support from
these unions.
Government: The central and state government influences and regulates industrial relations through
laws, rules, agreements, awards of court ad the like. It also includes third parties and labor and tribunal
courts.

PLURALIST PERSPECTIVE of IR
In pluralism the organization is perceived as being made up of powerful and divergent sub-groups
- management and trade unions. This approach sees conflicts of interest and disagreements
between managers and workers over the distribution of profits as normal and inescapable.
Consequently, the role of management would lean less towards enforcing and controlling and
more toward persuasion and co-ordination. Trade unions are deemed as legitimate
representatives of employees. Conflict is dealt by collective bargaining and is viewed not
necessarily as a bad thing and if managed could in fact be channeled towards evolution and
positive change. Realistic managers should accept conflict to occur. There is a greater propensity
for conflict rather than harmony.
They should anticipate and resolve this by securing agreed procedures for settling disputes.

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The implications of this approach include:
The firm should have industrial relations and personnel specialists who advise managers and
provide specialist services in respect of staffing and matters relating to union consultation and
negotiation.
Independent external arbitrators should be used to assist in the resolution of disputes.
Union recognition should be encouraged and union representatives given scope to carry out their
representative duties.
Comprehensive collective agreements should be negotiated with unions.
MARXIST PERSPECTIVE
This view of industrial relations is a by product of a theory of capitalist society and social change.
Marx argued that:
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Weakness and contradiction inherent in the capitalist system would result in revolution and the
ascendancy of socialism over capitalism.
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Capitalism would foster monopolies.
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Wages (costs to the capitalist) would be minimized to a subsistence level.
Capitalists and workers would compete/be in contention to win ground and establish their
constant win-lose struggles would be evident.

This perspective focuses on the fundamental division of interest between capital and labor, and
sees workplace relations against this background. It is concerned with the structure and nature of
society and assumes that the conflict in employment relationship is reflective of the structure of the
society. Conflict is therefore seen as inevitable and trade unions are a natural response of workers
to their exploitation by capital.
IR PROCESS
1) Employee writes in to the Director General Industrial Relations Department to make a representation
within 60 days of dismissal.
2) The Director General Industrial Relations will try to resolve the case through conciliation by inviting
both the employer and employee for a meeting.

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3) The conciliation officer will explain the principles and practices law that are applicable including
judgment of the courts, both the Industrial Court and civil courts, so that both parties are aware of their
rights and liabilities.
4) If there is a failure to resolve the case through conciliation, the Director General Industrial Relations
will then refer the case to the Minister of Human Resources, who will refer the matter to the Industrial
Court
for
adjudication
and
for
an
award
if
he
thinks
fit.
Unlawful dismissal case cannot be brought directly to the Industrial Court. This type of case must be
referred to the Industrial Court by the Minister of Human Resources.
5) The Industrial Court upon the matter being referred to by the Minister of Human Resources, then
goes to consider whether the termination of employment is unlawful or whether it is justified.
6) Where the Industrial Court rules that the termination is unlawful, the Court then makes an “Award”
to reinstate you to your former position or in lieu awards proper compensation.
The normal remedies in a case of dismissal are the reinstatement into your former employment and
award of back waged from dismissal date to the final date of hearing.
UNIT 2 LABOUR POLICIES AND LEGISLATION
FEATURES OF LABOUR POLICY
Labour Force

Nepal has an easily trainable and keen work force. Unskilled labour is cheap and abundant. Semiskilled
and skilled labour are available in sufficient numbers. The government has established technical
institutions to develop skills at the technical level in civil and electrical engineering, electronics, air
conditioning/refrigeration, general mechanics and auto mechanics. Training programmes are also
geared to industrial and vocational training in wood working, metal working, leather working, general
fitters, tailoring and so on. The programmes on entrepreneurial and management development and the
colleges of higher learning provide educated persons to be groomed for managerial positions on both
public and private sector industries.
Industrial Relations

Nepal has a history of maintaining good industrial relations during the past few decades when industrial
activity gradually expanded in the country. Labour unrest, lockouts and strikes do not occur as
frequently as they do in other developing countries. The Labour Act lays down guidelines and
procedures for the settlement of disputes between employers and employees. These guidelines and
procedures provide a favourable environment for the harmonious development of industrial relations.

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Legal Framework

The Labour Act, 1992 lays down the legal framework and the basis for the rules, regulations and
guidance on the proper management of any establishment employing 10 persons or more. It deals with
matters relating to employment and security of employment, working hours and minimum wages,
welfare of employees, employer employee relations and the settlement of labour disputes. Labour
Regulation, 1993 complements the Labour Act with further clarification in issues such as security of
profession and service, remuneration and welfare provision, health, cleanliness and safety, etc. The
Bonus Act of 1974, as amended subsequently, provides a legal basis for the payment of bonus to the
workers and employees of factories and commercial establishments.
Wages and Salaries

The minimum wage rates set by the government are comparatively lower than the going wage rates for
workers in SAARC and other countries of the region. Salaries of middle management executives,
technical grade officers, engineers and other professionals are generally lower than in other developing
countries. Permanent employees of a factory should contribute 10 percent of the monthly salary to a
provident fund and the management should make a matching contribution. Gratuities are payable to
workers who have worked for over 3 years.
Working Hours, Holidays

Normal working hours are fixed at 48 hours per week, 8 hours a day. Continuous working hours should
not exceed 5 hours. There should be a break of half an hour. Overtime work is remunerated at one and a
half times the normal wage.
In addition to 13 public holidays, permanent workers are entitled to one day's home leave for every 20
days, 15 days medical leave with half pay and one month special leave without pay every year. Female
employees are entitled to 52 days maternity leave with full pay. Such maternity leave shall be granted
only twice during the entire period of service. The compulsory retiring age for workers is 55. However, in
the case of a skilled worker whose service is indispensable, the retirement age could be extended upto
60 years.
LABOUR ACT
LABOUR ACT IS CONCERNED WITH
Employment and job security
Working hours
Remuneration

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Health and safety
Welfare arrangements
Special provisions applicable to special establishments
Conduct and penalties
Board, officers and other provisions
Settlement of labour disputes

TRADE UNION ACT
Trade Union (First Amendment) Act, 2055
Preamble:
Whereas it is expedient to make legal provision regarding registration, operation of Trade Union and other
necessary provisions relating to it for the protection and promotion of professional and occupational rights of
the workers, and self employed workers, working inside or outside the enterprise, engaged in various
industry, trade, profession or service*.
3. Registration of Enterprise Level Trade Union:

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The workers of concerned Enterprise may constitute and Enterprise Level Trade Union to protect
and promote their occupational rights.
In order to register an Enterprise Level Trade Union constituted pursuant to Sub-section(1) an
application in the prescribed form signed by at least 10 members of the Trade Union recommended
by the working committee along with the constitution of the Trade Union, prescribed fee and other
prescribed particulars should be submitted to the Registrar.
The Registrar after receiving an application pursuant to Sub-section (2) if finds complied with the
Act shall register the Trade Union within 15 days from the date of receipt of application or from the
date of receipt of additional particulars as demanded pursuant to Section 6 and provide certificate to
the applicant in the prescribed form.
Notwithstanding anything contained in Sub-section (3) the Enterprise Level Trade Union shall not be
registered if at least twenty five percent workers of the concerned Enterprise are not members.
No workers shall be eligible to be member of more than one Enterprise Level Trade Union at the
same time.

4. Registration of Trade Union Association:

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At least 50 Enterprise Level’s Trade Unions or 5000 agriculture labourers constituting one hundred
labourers per district drawn from a minimum of twenty districts or 5000 workers from similar nature
Enterprise*, may constitute a Trade Union Association by mutual agreement.
Notwithstanding anything contained in Sub-section (1) at least 500 workers, and self-employed
workers working in similar nature industries occupation from outside may constitute Trade Union
Association by mutual agreement#.

BY SAMRAKT DHAKAL

1.
2.

3.

4.
5.

A maximum of four associations constituted under this sub-clause shall be made eligible while
establishing Trade Union Federation under Article 5 of this Act#.
In order to register a Trade Union Association constituted pursuant to Sub-section (1) an application
in the prescribed form by the official recommended by the working committee along with a copy of
mutual agreement, the constitution of the trade union, prescribed fee and other prescribed
particulars should be submitted to the Registrar.
Act shall register the Trade Union Association within 15 days from the date of receipt of the
application or from the date of receipt of additional particular as demanded pursuant to section 6
and provide certificate to the applicant in the prescribed form
Notwithstanding anything contained in the Sub-section (1) no Trade Union of the Enterprise shall be
eligible to be member of more than one Trade Union Association at the same time.
After the registration of a Trade Union Association pursuant to Sub-section 4 its registration shall
remain valid for one year even if the number of members of such Trade Union Association declines
upto 10 percent.

5. Registration of the Trade Union Federation:

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At least ten Trade Union Associations may constitute a Trade Union Federation by mutual
agreement.
In order to register a Trade Union Federation pursuant to Sub-section (1) an application in the
prescribed form by the official recommendation by the working committee along with a copy of
mutual agreement, constitution of the Trade Union Federation, prescribed fee and other particulars
should be submitted to the Registrar.
Act shall register the Trade Union Federation within 15 days from the date of receipt of the
application or from the date of receipt of additional particulars as demanded pursuant to Section 6
and provide certificate to the applicant in the prescribed form.
Notwithstanding anything contained in Sub-section (1) no Trade Union Federation shall be eligible to
be member of more than one Trade Union Federation at the same time.
After the registration of a Trade Union Federation pursuant to Sub-section (3) its registration shall
remain valid for one year even if the number of member of such Trade Union Federation declines
upto 10 percent.

6. Additional Particular may be demanded:

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Regarding the registration of a Trade Union Federation if the Registrar considers additional
particular necessary, he may demand the required particulars within 7 days from the date of receipt
of the application for the registration of Trade Union Federation.
Notwithstanding anything contained in Section 3, 4 and 5 no Trade Union shall be registered unless
the particulars demanded pursuant to Sub-section (1) has been received.

7. Refusal of Registration: The Registrar may refuse to register a Trade Union in the following
circumstance:

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if necessary particulars are not attached with the application.
if at least 25 percent worker of the concerned Enterprise are not the member of the Enterprise Level
Trade Union.
if the name of the Trade Union coincides with the name of Trade Union which has already been
registered.
if the particulars mentioned in the Section 10 of the constitution of Trade Union has not been
included.

BY SAMRAKT DHAKAL

7 (A)* Renewal of Trade Union:
1) Enterprise level Trade Union shall be renewed after every two years and Trade Union Association and
Federation shall be renewed after every four years.
2) other procedures of Trade Union renewal shall be made as prescribed.
CHAPTER – 3
Operation, Management and Recognition of the Trade Union
8. Autonomous and Corporate Body:

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The Trade Union shall be an autonomous and corporate body having perpetual succession.
The Trade Union shall have a seal of its own to carry out its activities.
The Trade Union may acquire, posses, dispose or manage by other means of its movable property
as person.
The Trade Union may sue or be sued under it s name as person.

9. Objectives:





The Objectives of the Trade Union shall be as follows:
 To engage in economic and social development by improving the condition of workers.
 To make an effort to establish good relationship between worker and management.
 To assist in the development of Enterprise by increasing the productivity of Enterprise.
 Try to make the workers dutiful and discipline.
In addition to the objective mentioned in Sub-section (1), the Trade Union Association and Trade
Union Federation Shall have the following objective: To conduct activities providing education to the worker.
 To establish relation with international institutions for the benefit of the workers.
 To provide necessary advice to His Majesty’s Government in formulating the Labour Policy.
 In order to enhance social and economic standard of the workers publish facts beneficial to
the workers by conducting necessary workshops, seminars etc.
 In order to protect and promote the rights of the workers negotiate with His Majesty’s
Government and take other necessary steps within the existing law.

9(A)* Rights, duties and functions of Trade Union:
In addition to the functions, duties and rights mentioned in the constitution of Trade Union.
The functions, duties and rights of the Trade Union will be as follows:

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To take necessary action and implement necessary programs in order to achieve the Trade
Union objectives mentioned in Article 9 Sub-section (1) of this Act.
To make the members to participate in the election of the Enterprise Level Authorized Trade
Union.
To allow the workers to follow the decision made by the Enterprise level Authorized Trade
Union.

9(B)* Right, Duties and Functions of Trade Union Association and Federation:
In addition to the functions, duties and rights mentioned in the constitution of Trade Union
association and Trade Union Federation, the function, duties and rights of the Trade Union
Association and Federation will be as follows:

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To take necessary actions and implement necessary programs in order to achieve the
objective of Trade Union Association and Trade Union Federation as mentioned in Article 9
Sub-section (2) of this Act.
To make members to participants in the election of Trade Union Association and Trade
Union Federation.
To allow members to follow the decisions of the trade union association and Trade Union
Federation.
To follow necessary measures to resolve labour disputes by representing the workers in
important and national level policy issues on labour disputes and to negotiate with the
government, various types of Professional Associations and Federation and Enterprises.
To negotiate with the concerned enterprises and management on behalf of the Enterprise
Level Trade Union.
To establish and operate different type of funds for the interest and welfare of workers.
To make public the oppression on workers and Trade Union and to issue necessary warning
to the concerned enterprises for the same.

10. Constitution:

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The following particulars shall be included in the Constitution of the Trade Union:-

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Name and address of Trade Union;
Objective of the establishment of Trade Union;
Procedure of the formation of the working committee as well as the term of office shall be a
maximum period of four years;
General Membership, the number of officials and the mechanism of their election;
Provision that only a worker, who is a Nepali Citizen and having served continuously for one
year to be elected for the official post;
Provision regarding fund of the Trade Union and its auditing;
Provision regarding inspection and examination of the account of the Trade Union;
Provision to bring the vote of no confidence against the officials;
Provision regarding function, duty, right and meeting of the working committee and the
General Assembly of Trade Union;
The procedure of amendment of the Constitution of Trade Union;
Provision regarding dissolution of the Trade Union;
Provision regarding liability and property of the Trade Union after its dissolution.

2. If any amendment is made in the Constitution of the Trade Union, the concerned Trade Union* shall
inform the Registrar with a copy of such amendment within 35 days after such amendment has been made
and approval of such amendment have to taken from the Registrar
11. Recognition of the Authorized Trade Union:



The Authorized Trade Union shall be recognized for the collective bargaining with the management
on behalf of the workers of Authorized Enterprise Level Trade Union.

1.

1(a)* If case only one Trade Union is being registered in any enterprise and if no Trade Union is
being registered within three months of the registration, the Trade Union registered at first shall be
regarded as an Authorized Trade Union.
1(b)* The three months period, as being mentioned in 1A, shall be counted from the date of
operation of this Act.

2.

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The Authorized Trade Union recognized pursuant to Sub-section (1) shall inform to the Registrar
and the Manager within 15 days after such recognition has been extended.

BY SAMRAKT DHAKAL

3.

The Registrar shall provide the certificate of Authorized Trade Union as prescribed within 15 days
from the date of receipt of notice pursuant to Sub-section (2).

4.* The election procedure of the Authorized Trade Union will be made as presumed.
12. Presentation of Claim:

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Notwithstanding anything contained in Section 74 (1) of the Labour Act, 2048 (1991) the working
committee of the Authorized Trade Union on behalf of the workers may present claims in written
form with the number and names of its representative to the management for collective bargaining.
The Authorized Trade Union shall not go on strike in Enterprise or do such action that may assist it
in any manner without completing the procedure mentioned in Section 76 of the Labour Act, 2048
(1991).

13. Duration of Validity of the Recognition of the Authorized Trade Union:
The duration to bargain collectively on behalf of the workers of the Authorized Trade Union recognized
pursuant in Section 11 with the management shall remain valid for two years from the date of issue of the
certificate by the Registrar pursuant to Sub-section (3) of the same Section.
However, in case the registration of the Authorized Trade Union is being annulled or such Trade Union is
dissolved, another Authorized Trade Union shall be elected within the three months of the dissolution*.
CHAPTER – 4
14. Appointment of the Registrar:

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His Majesty’s Government shall appoint Registrars as necessary for the registration of the Trade
Union in accordance to this Act.
Notwithstanding anything contained in Sub-section (1) His Majesty’s Government may, by
notification published in the Nepal Gazette, authorize as necessary any other officer to use the
power of Registrar.

15. Functions, Duties and Power of the Registrar:
The functions, duties and power of the Registrar shall be as follows:-

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To register the Trade Union.
To maintain and keep up to date Register Book with detailed particulars of the registered Trade
Union and other related particulars.
To demand additional particulars necessary for the registration of the Trade Union.
To take necessary action if the particulars, report or other documents required to be submitted by
the Trade Union under the Act is not submitted or if false particulars are submitted.
To specify the procedure of election of the Authorized Trade Union.

16. Register Book:
The Registrar shall maintain a separate Register Book to keep upto date the particulars, records etc. of the
Trade Union.
CHAPTER-5
17. (1) The trade Union shall have its own separate fund and the fund shall contain the following amounts:-

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The amount obtained from the membership fee.
The amount obtained from the national organizations in the form of Aid or Grant.
The amount obtained from any other sources.

(2) All expenses incurred in the name of Trade Union shall be borne out from the Fund.
(3)The amount to be contained in the fund pursuant to Sub-section (1) shall be deposited by opening an
account in any Commercial Bank within the Kingdom of Nepal.
18. Accounts and Auditing:

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The accounts shall be maintained as mentioned in the Constitution of the Trade Union.
The accounts maintained pursuant to Sub-section (1) shall be audited by the auditor appointed by
the General Meeting of the Trade Union.

CHAPTER – 6
Miscellaneous
19. Merging of the Trade Union:
1.

2.

#

If two or more than two Trade Unions like to merge into one Trade Union and if the majority of the
General Assembly Members of Trade Union cast vote in favour of such merging, such Trade Union
may constitute a new Trade Union by mutual agreement.
In order to register a new Enterprise Levelx Trade Union constituted pursuant to sub-section (1),
the officials authorized by the working committee shall apply to the Register in the specified form
with a copy of the agreement mutually entered into by the merged Trade Unions, the Constitution of
the Trade Union, prescribed fee and other prescribed particulars.

20. Information of the change in name:
If any Trade Union changes its own name the Registrar shall be informed of such changes within 15 days of
the change of name.
21. Effect of change in name, merging or dissolution:

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No effect shall occur in the power to be achieved or obligation to be fulfilled by such Trade Union
only by the reason of change in name of Trade Union.
The merging of two or more than two Trade Unions into only one Trade Union or the dissolution of
Trade Union in other Trade Union shall have no effect in the obligation to be performed by such
Trade Union.

22.# Obligation to be fulfilled regarding contracts:

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It shall be the duty of such Trade Union and the party to the contract entered with the Trade Union
to fulfill the obligation of the contract entered into by the Trade Union itself or by the authorized
officials on behalf of the Trade Union.
If a case has to be filed relating to disputes arising out of the agreement reached between the Trade
Union and the management as per sub clause (1) the case should be filed at the Labour Court with
in thirty days of such dispute or the cause for litigation.

BY SAMRAKT DHAKAL

23. No Case to be filed:
After complying with the procedure of this Act or the Labour Act, 2048(1991) if the Authorized Enterprise
Level Trade Union or the Official of such Trade Union#, while doing anything in the context of collective
bargaining have affected by its action to the Enterprise, no case shall be filled against Trade Union or the
officials in any court regarding such action.
23(a)* No transfer or promotion:
Except in special circumstances, the officials of the Enterprise Level Trade Union shall not be transfer or
promoted without their consent.
24. Presentation of Annual Report:

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The Trade Union shall submit to the Registrar an annual report of each year within three months
from the end of fiscal year by auditing its account books showing clearly all property, loan including
obligations of the Trade Unions.
In the annual report pursuant to Sub-section (1) the total number of members saying charges to
the Trade Union and the particulars of the officials changed during the year shall also be included.

25. Cancellation of the Registration:

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the Registrar shall cancel the Trade Union registered under this Act on the following circumstances:

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2.

3.

If the Trade Union applies an application to the Registrar for the cancellation of its
registration.
If it is proved that the registration of the Trade Union has been made by mistake or
fraudulent act.
If anything is done contrary to this Act or the Regulations made under this Act.

#

When canceling the registration of any Trade Union under the condition mentioned in part (b) and
(c) of Sub-section (1) the Registrar shall give notice to the concerned Trade Union in written form
asking clarification within fifteen days on the reason for the cancellation.
The registrar can cancel the registration of such trade unions if the trade union fails to submit
clarification letter with in the specified period under sub clause (2) or the submitted clarification
letter is found to be not satisfactory and not according to the law.

26. Officials of Trade Union Association and Federation:
Notwithstanding anything contained elsewhere in this Act, the Trade Union Association and Trade Union
Federation shall appoint from their working committees not exceeding 10 percent and 25 percent
respectively of the total number of officials who are engaged in the protection and promotion of the rights of
the worker, in the officials of the Trade Union Association and Trade Union Federation.
26(a)* Trade Union Representation: While nominating the representatives from the Trade Union or
representing the Trade Unions, where there are more than one Trade Union related to the subject matter,
His Majesty's Government shall nominate or represent the Trade Unions on a proportionate or rotationary
basis.

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27. Notice of Dissolution of Trade Union to be provided:




If a Trade Union is to be dissolved in accordance with the Constitution, the notice of such dissolution
has to be provided to the Registrar by the concerned official with reason.
After receiving the notice of dissolution of trade Union pursuant to Sub-section (1) the Registrar
shall register such notice only in the case of the Trade Union which has been dissolved in
accordance with the Constitution.
27(a)* Instituting of Case and Limitation: Other than things stated otherwise in this Act, if a
case has to be filed against any person on the ground of contradiction to this Act or the
regulations made under this Act, the case has to be filed within three months from the date
of contradiction of the Act or from the date of cause to file such case.

28. Offence & Punishment:





#

If any official, member or staff member of Trade Union misappropriate the property of the
program or the fund operated by the Trade Union or to cause loss and damage to such property,
the Labour Court may order such officials, members or staff members to compensate the proporty
lost or damaged and fine to the extent of Rs.5000/- or one year’s imprisonment or both.
If the particulars, reports, notices, or any other documents to be submitted on behalf of the Trade
Union in accordance with this Act or the rules under this Act is not submitted or false particulars are
submitted, the Registrar may fine the concerned official to the extent of Rupees five hundred.

29. Appeal:





An appeal to the case initially decided by the Labour Court in accordance with this Act shall lie to
the Appeal Court.
An appeal on the order made by the Registrar under this Act may be filed to the Labour Court.
An appeal may be filed within 35 days from the date of such proceeding and decision made by the
Labour Court or the order made by the Registrar.

30. Special Power of His Majesty’s Government:
His Majesty’s Government may give necessary order or direction to restrict such activities of Trade Union if
the activity of the Trade Union seem to create extra-ordinary situation thereby disturbing the peace and
order or to go against the economic development of the country.
31. Power to Frame Rule:
His Majesty’s Government may frame necessary rules to carry out the purpose of this Act.
* Additions made by the First Amendment.

# Changes made by the First Amendment.

x Excluded by the First Amendment.

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LABOUR ADMINISTRATION NEPAL
Department(s) in charge of Labour Inspection
The Ministry of Labour and Transport Management is responsible for labour inspection. The ministry is divided into
two divisions, two departments and one directorate. These are: (1) the Employment Promotion, Administration and
Transport Management Division which includes: Foreign Employment, Monitoring and Inspection Section; (2) the
Policy Planning and Labour Relations; (3) the Department of Labour and Employment Promotion; (4) the Department
of Transport Management and (5) the Vocational and Skill Development Training Directorate. The Department of
Labour and Employment Promotion is the central level execution body of labour administration as well as the
coordinating body of all labour offices established in the field. The responsibilities of the department include: following
up the enforcement of labour legislation and coordinating the field office job of labour inspection, occupational safety
and health.

Law that covers organization and functional composition
• Labour Act (2048), 1992

Scope of labour inspection
Labour inspection in Nepal, as an institution, is almost inexistent. There are two categories of staff that control the
application of labour law provisions: labour officers and factory inspectors. Factory inspectors focus on occupational
safety and health, basically checking machinery such as steam generators. Labour officers focus on working
conditions. In practice, due to the problem of scarce human resources, factory inspectors are in fact assigned as
labour officers – chiefs of the offices - and control the application of working conditions as well.

Local divisions
There are ten labour offices with the task of supervising, administering and monitoring labour legislation. These
labour offices cover all the administrative regions of the country. Support provided to labour offices in the fields by the
central level is minimal.

Programming and communication
The inspectors set annual targets themselves, but the central authorities demand no targets, which seems to be
rooted in the lack of proper data collection for statistical purposes. But since data is not properly collected, statistics
are not available and planning is therefore inexistent. Planning does not have a strategic component to it, and it is a
mere compilation of the work projected in each of the field offices, based on past experience.

Coordination with field offices is an area where efficiency could be improved, (with little resource allocation) starting
with strategic planning.

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Current reforms
Technical support has been provided by the ILO to identify short, medium and long term actions that could be taken
to improve the efficiency and effectiveness of labour inspection.

Among the recommendations made, we can highlight the creation of a new labour inspectorate with increase
functional responsibilities, labour law reforms, mechanisms to increase the number of labour inspectors, accredited
companies/entities to carry out certain specialized audits/certification, and the empowerment of labour inspectors.

Human Resources and career development
Permanency of inspectors
Currently, there is no career development strategy with clear promotion opportunities in place.

Selection process
In a number of cases, labour inspectors are assigned to the labour office in the field structure of the labour
administration without any prior experience in the field of labour. It becomes a “learning-by-doing” process to carry
out the duties and exercise the powers of labour officers.

Background required
Factory inspectors are engineers by education.

Visits and functions
Types of visits
N/A

Role of preventive measures
The Occupational Safety and Health Project was established under the Ministry of Labour and Transport
Management in 1995 with the prime objective of creating the awareness of occupational safety and health among
industrial employers, employees and the concerned officials of the government and thereby improving the conditions
of work. Among its objectives is to facilitate regular and organized workplace inspection and monitoring for effective
implementation of the legal provisions of workplace improvement, to provide training facilities to all the stakeholders
for the protection and promotion of the safety and health of the workers. Moreover, the project facilitates regular and
organized workplace monitoring and provides advisory services on the possible improvement of the workplace, with
respect to the protection and promotion of workers occupational safety and health.

Programming
N/A

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Registries and reporting of accidents/diseases at work
N/A

Sanctions and administrative processes
Inspectors do not have prosecution authority.

Social partners and labour inspection
The Labour Act foresees the creation of Welfare Officers to be appointed in every establishment employing 250 or
more workers or employees. The general manager of the establishment designates the Welfare Officer and the
labour department must be notified accordingly. The functions, duties and powers of the Welfare Officer and the
Assistant Welfare Officer, according to the Act, “shall be as prescribed”.

In July 2008, there was ongoing discussion on involving the social partners in “certified” inspector programmes in
order to assist the central authority.

ILO Conventions ratified
Nepal has neither ratified Convention No. 81 nor No. 129.

UNIT 3 TRADE UNIONISM
CONCEPT OF TRADE UNIONISM
A trade union is an organization of employees formed on a continuous basis for the purpose of
securing diverse range of benefits. It is a continuous association of wage earners for the purpose
of maintaining and improving the conditions of their working lives.
The Trade Union Act 1926 defines a trade union as a combination, whether temporary or
permanent, formed primarily for the purpose of regulating the relations between workmen and
employers or between workmen and workmen, or between employers and employers, or for
imposing restrictive condition on the conduct of any trade or business, and includes any
federation of two or more trade unions.
This definition is very exhaustive as it includes associations of both the workers and employers and
the federations of their associations. Here, the relationships that have been talked about are both
temporary and permanent. This means it applies to temporary workers (or contractual employees)
as well. Then this definition, primarily, talks about three relationships. They are the relationships
between the:

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workmen and workmen,
workmen and employers, and
Employers and employers.
Thus, a trade union can be seen as a group of employees in a particular sector, whose aim is to
negotiate with employers over pay, job security, working hours, etc, using the collective power of its
members. In general, a union is there to represent the interests of its members, and may even
engage in political activity where legislation affects their members. Trade unions are voluntary
associations formed for the pursuit of protecting the common interests of its members and also
promote welfare. They protect the economic, political and social interests of their members.
OBJECTIVES OF TRADE UNION
Trade unions are formed to protect and promote the interests of their members. Their
primary function is to protect the interests of workers against discrimination and unfair
labor practices. Trade unions are formed to achieve the following objectives:
Representation
Trade unions represent individual workers when they have a problem at work. If an
employee feels he is being unfairly treated, he can ask the union representative to help
sort out the difficulty with the manager or employer. Unions also offer their members legal
representation. Normally this is to help people get financial compensation for work-related
injuries or to assist people who have to take their employer to court.
Negotiation
Negotiation is where union representatives, discuss with management, the issues which
affect people working in an organization. There may be a difference of opinion between
management and union members. Trade unions negotiate with the employers to find out a
solution to these differences. Pay, working hours, holidays and changes to working practices
are the sorts of issues that are negotiated. In many workplaces there is a formal agreement
between the union and the company which states that the union has the right to negotiate
with the employer. In these organizations, unions are said to be recognized for collective
bargaining purposes.
Voice in decisions affecting workers

The economic security of employees is determined not only by the level of wages and
duration of their employment, but also by the management’s personal policies which include
selection of employees for layoffs, retrenchment, promotion and transfer. These policies
directly affect workers. The evaluation criteria for such decisions may not be fair. So, the
intervention of unions in such decision making is a way through which workers can have

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their say in the decision making to safeguard their interests.
Member services

During the last few years, trade unions have increased the range of services they offer their
members. These include:
o

Education and training - Most unions run training courses for their members
on employment rights, health and safety and other issues. Some unions also
help members who have left school with little education by offering courses
on basic skills and courses leading to professional qualifications.

o

Legal assistance - As well as offering legal advice on employment issues,
some unions give help with personal matters, like housing, wills and debt.

o

Financial discounts - People can get discounts on mortgages, insurance and
loans from unions.

o

Welfare benefits - One of the earliest functions of trade unions was to look
after members who hit hard times. Some of the older unions offer financial
help to their members when they are sick or unemployed.

METHODS USED BY TRADE UNIONS TO ACHIEVE THEIR OBJECTIVES
•

Mutual insurance

•

Collective bargaining

•

Legal enactments/ political actions

•

Strikes

•

Bandhs

•

Gheraos

•

Boycott

•

Lockout

•

Picketing

FEATURES OF TRADE UNION

1. It is an association either of employers or employees or of independent workers. They may
consist of :-

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o

Employers’ association (eg., Employer’s Federation of India, Indian paper mill
association, etc.)

o

General labor unions

o

Friendly societies

o Unions of intellectual labor (eg, All India Teachers Association)
2. It is formed on a continuous basis. It is a permanent body and not a casual or temporary one.
They persist throughout the year.
3. It is formed to protect and promote all kinds of interests –economic, political and social-of its
members. The dominant interest with which a union is concerned is, however, economic.
4. It achieves its objectives through collective action and group effort. Negotiations and collective
bargaining are the tools for accomplishing objectives.
5. Trade unions have shown remarkable progress since their inception; moreover, the character
of trade unions has also been changing. In spite of only focusing on the economic benefits of
workers, the trade unions are also working towards raising the status of labors as a part of
industry.
PLUS
–

Trade Unions maybe associated with either of employers/ employees or independent

–

workers.
Labor Unions are relatively permanent combination of workers & are not temporary or

–

casual.
A Trade Union is an association of workers who are engaged in securing economic

–

benefit for their members.
Trade Unions change their methods & their working style according to the change in

–

technology & systems of production.
Trade Unions have now become legalized & recognized institutions.

Functions of Trade Unions

Functions relating to members
Functions relating to organization
Functions relating to the union; and
Functions relating to the society.
Functions relating to trade union members

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1. To safeguard workers against all sorts of exploitation by the employers, by union leaders
and by political parties.
2. To protect workers from the atrocities and unfair practices of the management.
3. To ensure healthy, safe and conducive working conditions, and adequate conditions of
work.
4. To exert pressure for enhancement of rewards associated with the work only after making
a realistic assessment of its practical implications.
5. To ensure a desirable standard to living by providing various types of social service –
health, housing, educational, recreational, cooperative, etc. and by widening and
consolidating the social security measures.
6. To guarantee a fair and square deal and social security measures.
7. To remove the dissatisfaction and redress the grievances and complaints of workers.
8. To encourage worker‟s participation in the management of industrial organization and
trade union, and to foster labour-management cooperation.
9. To make the workers conscious of their rights and duties.
10. To impress upon works the need to exercise restraint in the use of rights and to enforce
them after realistically ascertaining their practical implications.
11. To stress the significance of settling disputes through negotiation, joint consultation and
voluntary arbitration.
12. The raise the status of trade union members in the industrial organization and in the
society at large.
Functions relating to industrial organization

1. To highlight industrial organization as a joint enterprise between workers and
management and to promote identity of interests.
2. To increase production quantitatively and qualitatively, by laying down the norms or
production and ensuring their adequate observance.
3. To help in the maintenance of discipline.
4. To create opportunities for worker‟s participation in management and to strengthen labormanagement cooperation.

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5. To help in the removal of dissatisfaction and redressal of grievances and complaints.
6. To promote cordial and amicable relations between the workers and management by
settling disputes through negotiation, joint consultation and voluntary arbitration, and by
avoiding litigation.
7. To create favorable opinion of the management towards trade unions and improve their
status in industrial organization.
8. To exert pressure on the employer to enforce legislative provision beneficial to the
workers, to share the profits equitably, and to keep away from various types of unfair
labor practices.
9. To facilitate communication with the management.
10. To impress upon the management the need to adopt reformative and not punitive,
approach towards workers‟ faults.
Functions relating to trade unions organization

1. To formulate policies and plans consistent with those of the industrial organization and
society at large.
2. To improve financial position by fixing higher subscription, by realizing the union dues
and by organizing special fund-raising campaigns.
3. To preserve and strengthen trade union democracy.
4. To train members to assume leadership position.
5. To improve the network of communication between trade union and its members.
6. To curb inter-union rivalry and thereby help in the creating of unified trade union
movement.
7. To resolve the problem of factionalism and promote unity and solidarity within the union.
8. To eradicate casteism, regionalism and linguism within the trade union movement.
9. To keep away from unfair labour practices.
10. To save the union organization from the exploitation by vested interests –personal and
political.
11. To continuously review the relevance of union objectives in the context of social change,
and to change them accordingly.

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12. To prepare and maintain the necessary records.
13. To manage the trade union organization on scientific lines.
14. To publicise the trade union objectives and functions, to know people‟s reaction towards
them, and to make necessary modifications.
Functions relating to society

1. To render all sorts of constructive cooperation in the formulation and implementation of
plans and policies relating to national development.
2. To actively participate in the development of programmes of national development, e.g.,
family planning, afforestation, national integration, etc.
3. To launch special campaigns against the social evils of corporation, nepotism,
communalism, casteism, regionalism, linguism, price rise, hoarding, black marketing,
smuggling, sex, inequality, dowry, untouchability, illiteracy, dirt and disease.
4. To create public opinion favourable to government‟s policies and plans, and to mobilize
people‟s participation for their effective implementation.
5. To create public opinion favourable to trade unions and thereby to raise their status.
6. To exert pressure, after realistically ascertaining its practical implications, on the
government to enact legislation conducive to the development of trade unions and their
members.
TYPES OF TRADE UNIONS
There are 4 types of trade unions:1. Craft unions-this union represents workers with a particular skill
2. Industrial unions-this union represents all workers in one industry with different skills
3. General unions-this union represents workers with different skills
4. White collar unions-this union represents special skills like engineer or something

1. Craft unionism refers to organizing a union in a manner that seeks to unify workers in a
particular industry along the lines of the particular craft or trade that they work in by class or
skill level. It contrasts with industrial unionism, in which all workers in the same industry are
organized into the same union, regardless of differences in skill.

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2. Industrial unionism is a labor union organizing method through which all workers in the
same industry are organized into the same union—regardless of skill or trade—thus giving
workers in one industry, or in all industries, more leverage in bargaining and in strike situations.
Advocates of industrial unionism value its contributions to building unity and solidarity,
suggesting the slogans, "an injury to one is an injury to all" and "the longer the picket line, the
shorter the strike."
Industrial unionism contrasts with craft unionism, which organizes workers along lines of their
specific trades, i.e., workers using the same kind of tools, or doing the same kind of work with
approximately the same level of skill, even if this leads to multiple union locals (with different
contracts, and different expiration dates) in the same workplace.
3. A General Union is a trade union (called labor union in American English) which represents
workers from all industries and companies, rather than just one organization or a particular
sector, as in a craft union or industrial union. A general union differs from a union federation or
trades council in that its members are individuals, not unions.
The creation of general unions, from the early nineteenth century in the United Kingdom and
somewhat later elsewhere, occurred around the same time as efforts began to unionize
workers in new industries, in particular those where employment could be irregular.
Proponents of general unions claim that their broader range of members allows more
opportunities for solidarity action and better coordination in general strikes and the like.
Detractors claim that the broader remit means they tend to be more bureaucratic and respond
less effectively to events in a single industry.
In the United Kingdom, general unions include the GMB and the TGWU. In Australia a good
example of a general union is the Australian Workers Union
4. The term white-collar worker refers to a salaried professional or an educated worker who
performs semi-professional office, administrative, and sales coordination tasks, as opposed to a
blue-collar worker, whose job requires manual labor. "White-collar work" is an informal term,
defined in contrast to "blue-collar work".
TRADE UNIONISM IN NEPAL
Origin of Trade Unions in Nepal
The history of trade union movement in Nepal is of recent origin. There were no trade unions in Nepal
before 1945 as the country was under the family rule of Ranas. Nepal had followed closed-door
economy having almost no relations with the outside world. In 1946 All Nepal Trade Union Congress
(ANTUC) was formed. In 1947, Biratnagar Workers Union (BWU) was set up. In March 1947 the first
workers’ movement took place at Biratnagar for the establishment of democracy. In 1951 ANTUC and
BWU became united and formed the first trade union federation in Nepal. The World Federation of

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Trade Unions (WFTU) in 1953 granted membership to ANTUC. After the democratic change of 1950, the
freedom of association allowed the opportunities to many voluntary organisations in the country and
the workers, too, felt the need to be united under one umbrella to fight against the exploitation of the
management and the government. The unions existed at that time were:
Biratnagar Workers’ Union, Cotton Mills Workers’ Union, All Nepal Trade Union Congress, Independent
Workers’ Union, Biratnagar Mills Workers’ Association, All Nepal United Workers’ Union, All Nepal Trade
Union Organisation and Nepal Labour Union. But these unions were merely instruments of the political
parties without the capacity of free collective bargaining. This is clear from the fact that Girija Prasad
Koirala, now, the president of Nepali Congress Party and late Mana Mohan Adhikari, former president of
the United Marxist-Leninist Party, were active both in trade unions and their respective parties. After
the success of democratic struggle against 104 years of Rana family rule in 1950 freedom of expression
and organisation became part of political life.
The Nepalese political history took a new turn in 1960 when the King staged a putsch, banned the
political parties and trade unions and established a partyless Panchayat system in 1962. This system
limited the freedom of expression and association but envisioned creating exploitation-free society
through the harmonisation and co-ordination of the interests of different classes. For this, six different
class organisations including Nepal Labour organisation were created. As this organisation was
controlled by the system and also that the central body was heavily politicised, the objective of ensuring
the labour welfare remained unfulfilled. Still, some of the noticeable achievements were also made
during this period in the field of labour administration, such as, establishment of a separate labour
ministry, department and some labour offices and the admission of Nepal into the International Labour
Organisation (ILO) as a member.
Multi-party democracy was restored in the Spring of 1990 in the country after the success of people's
movement, in which many professional organisations, including workers had actively participated. The
Constitution of the Kingdom of Nepal 1990 guaranteed multi-party parliamentary system, human rights,
constitutional monarchy and the sovereignty of people. It also granted the freedom of expression and
association, which inspired the formation of trade unions. At an early stage, there was mushrooming
growth of trade unions. They were heavily divided in the line of political ideologies. Each party has its
own unions, if not general federation. With the passage of time, most of these unions could not exist
and some of the unions were merged.
All Nepal Federation of Trade Unions (ANTUF) has been continuously struggling from the very beginning
of its establishment for political rights, economic and occupational rights and social security for
workers'. Proportional Representation of workers in national policy making, freedom of trade union
right, ownership on means of productions, guarantee of employment, reasonable wages and perks, and
social security for all is our tactical objectives whereas establishment of proletarian state is our strategy.
Because of the above characteristics of ANTUF which are exactly similar to the vision of United Nepal
communist party- Maoist (UNCPN-Maoist) , it is proud to be a sister organization of UCPN- Maoist and it
will strongly go further to establish the very visions of UCPN- Maoist.
We intend to go together with all the trade unions around the globe for workers' right.
An outline of ANTUF
1. Workers movement started since 1947 in Nepal.
2. Establishment of ANTUC in 1950 in the direction of communist of party Nepal (CPN).

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BY SAMRAKT DHAKAL

3. First president late comrade Bal Bahadur Rai (he was a retired foreman of Biratnagar jute
Mills)
4. First secretary general of ANTUC and founder member of CPN comrade Nara Bahadur
Karmacharya.
5. CPN banned in 1951.
6. Trade union activities were gone underground in 1961 cause of coup de etat by autocratic
king Mahendra.
7. Revolutionary Trade union reactivated since 1970 -1971 on the leadership of com. Ishori
Dahal.
8. After people's movement of 2046 all Nepal workers union, all Nepal trade union and National
workers union was united and they stand on the name of ANTUC again
9. First unification conference held in 1991 and comrade Dinesh Sharma elected as president.
10. Com. Ravi karki elected in 1993 in the Second national conference.
11. Com Kumar Dahal elected as president in 1993 after federal council's meeting.
12. Com Kumar Dahal elected in the post of president in 1995 after 3rd national conference.
13. Com Shalikram jamkattel elected in the post of president in 4rth national conference.
14. Unification Process of Revolutionary trade unions and worker started since 1993.
15. Unification of Two revolutionary trade unions (ANFTU and ANTUC) in 2008.
16. Polarization of revolutionary working class is still on
PRESENT POSITION OF TRADE UNION IN NEPAL
Strength of Trade Union Federations
Restoration of multi-party democracy in Nepal in 1990 opened the space for civil society organizations
including trade unions. Registration of trade unions started in 1993. Trade Union Act of 1992 makes the
registration and renewal of trade unions in every two years mandatory. The period between 1993 to 1999
can be called a "conducive" period for union activism while the period between 2000-2002 can be regarded
as a bad period. Violent Maoist conflicts, closing of many enterprises, the successive government's bias
towards the capital, declaration of the state of emergency and suspension of civil rights (also workers'
rights) can be attributed to the decline of trade union movement in Nepal.
The registration of trade union federation is based on the legitimate membership patterns of member unions
under Trade Union Act. The recognition of all three national federations-- Nepal Trade Union Congress
(NTUC), General Federation of Nepalese Trade Unions (GEFONT) and Democratic Confederation of Nepalese
Trade Unions (DECONT)-- will remain until 2003.
NTUC claims that it has one hundred 92 thousand members. GEFONT affirms that it has five hundred
thousand members and DECONT claims that it has two hundred thirty-nine thousand members. But, the feepaying members are less than stipulated. The Department of Labor also reveals that only a half million
workers are unionized. One hundred thousand in agriculture sector and four hundred thousand in industrial
sectors, bulk of those organized are concentrated in construction and transportation sectors. NTUC and
GEFONT's strength lies in organized sector while DECONT's strength lies in unorganized sector.
Registration and the Type of Membership of Trade Unions:
Trade Union Act of 1992 has underlined four criteria for the registration of Trade Union Association:

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




At least 50 Enterprise Level Trade Unions can form a national Trade Union Association by Mutual
Agreement (Clause 4 (1) of Trade Union Act).
Five-thousand workers from similar nature of Enterprise can also form a trade union (Clause 4 (1)
of Trade Union Act).
In the case of agriculture sector, 5,000 workers can form a union by mutual agreement but the
union must have a representation from at least 20 districts and a minimum of 100 workers'
representation from one district (Clause 4 (1) of Trade Union Act).
Those working in informal sector and self-employed can also form a union if they have at least five
hundred members working in the same nature of occupation (Clause 4 (2) of Trade Union Act).

In the Department of Labor 85 national level trade Unions are registered. Out of them only 57 are "active."
In this figure, the share of GEFONT is 15, NTUC 17, DECONT 14 and those unaffiliated to any federation is
11. Out of 15 trade unions affiliated to GEFONT 7 trade unions are registered under the Clause 4 (1) of
Trade Union Act having more than 50 enterprise level unions, 2 trade union associations have been
registered under the more than five thousand individual membership, 1 agricultural workers' union and 5
unions are registered under Clause 4 (2) of Trade Union Act.
Out of 17 trade unions affiliated with NTUC 3 unions are registered under the Clause 4 (1) having more than
50 unions at enterprise level, 4 union are registered under Clause 4 (1) of Trade Union Act with five
thousand individual membership, and 10 unions are registered under Clause 4 (2) of Trade Union Act.
None of DECONT affiliated unions are registered with 50 or more enterprise level unions. Its 7 unions are
registered with 5000 members each, 1 agricultural workers' union with 5000 members and rest of its unions
are registered under Clause 4 (2) of the Trade Union Act having each union 500 individual members.
Though the legal status of the central level unions formed on individual membership basis is equal to the
central federation of enterprise level unions but at the local level they are not effective in collective
bargaining, do not participate in industrial relations committee, become authoritative through election, run
public welfare fund and engage in day to day problems of workers. This implies that in Nepal's labor market
out of existing 57 active trade unions it is only GEFONT's 7 and NTUC's 3 unions organized at the enterprise
level which have the real capacity to empower the unions in the organized sector. Unaffiliated unions have
their own independent role. It is not clear whether there is a decline of members in unions formed by
individuals. Industrial decay throughout the nation indicates that there is a corresponding decline in the
number of such unions.
The survival of Nepal Hotel Workers' Union of NTUC is in danger. In the days ahead Nepal Independent
Workers' Union and Nepal Independent Food and Beverage Worker's Union of GEFONT and Nepal Hotel
Workers' Union of NTUC might suffer the same fate if they do not have fifty union membership. This implies
that the unions affiliated with GEFONT have important role in collective bargaining. Evidently, no matter how
many numbers they have in the trade union federation registered under Clause 4(2) of Trade Union Act they
are counted only as four unions.
Twenty-three national level unions relating to brick, wood, barber, restaurants, garment, health workers,
leather shoe, commercial artist, workshop, etc affiliated with different federations and others' registration at
the Labor Department were cancelled recently due to a lack of requisite members.
Promulgation and Implementation of Labor Laws in Nepal
After the promulgation of the Constitution of the Kingdom of Nepal in 1990, many progressive acts are
formulated to promote labor welfare, such as





28

Labor Act 1992 (amended in 1998),
Child Labor Act 1992,
Transportation and Vehicles Management Act 1993,

BY SAMRAKT DHAKAL












Tea Plantation Workers' Regulation, 1993
Foreign Employment Act 1985 (revised in 1993)
Trade Union Act 1993 (amended in 1999),
Working Journalist Act 1994,
Labor Court Regulation Act 1995,
Establishment of a Labor Court 1996,
Formation of a Central Labor Advisory Board 1998
Child Labor (Prohibition and Regulation) Act 1999
Revision of Bonus Act, 1973 in 2000, and
Creation of National Welfare Fund 2000

Nepal also endorsed 9 conventions passed by International Labor Organization (ILO), such as











Weekly Rest in Industrial Enterprise Convention, 1921 (No. 14).
Forced Labor Convention, 1930 (No. 29).
Right to Organize and Collective Bargaining Convention, 1949 (No. 98).
Equal Remuneration Convention, 1951(No. 100)
Discrimination (Employment and Occupation) Convention, 1958 (No.111).
Determination of Minimum Wage Convention, 1970 (No. 131).
Minimum Age Convention, 1973 (No.138).
Tripartite Consultation (International Labor Standards) Convention, 1976 (No. 144).
Worst Forms of Child Labor Convention, 1999 (No. 182).

Minimum Wage Structure
In Nepal, minimum wages for workers per month have been classified into four categories:






unskilled workers US $ 27.00
semi-skilled workers $27.76
skilled workers $31.61
highly skilled workers$33.00

The minimum wage structure is unable to meet even the basic needs of workers and their families where the
average family ratio is 4.5 members. Trade Unions are, therefore, demanding the rise in minimum wage
conditions and its effective implementation so that it can meet the basic needs of workers. In informal
sectors, there is the problem in the implementation of this wage structure. Due to lack of adequate
resources and proper institutional mechanism many of these labor standards have become non-actionable
and non-justiceable. Government also violates these standards. There are several examples:








29

In 2001 the government banned the Independent Hotel Workers Union's strike on March 19, 2001.
The hotel workers had gone on strike demanding a ten per cent service charge in the hotel sector
which was suppressed by imposing the Essential Service Act 1957.The Joint Struggle Committee
had filed a case at the Supreme Court against the government's move to ban the hotel workers
from going on strike. ILO in a letter sent to the government has requested it to lift the ban and has
said the hotel workers have the right to go on strike.
Trade unions also resisted the former premier Sher B. Deuba's efforts to bring flexible labor laws by
giving
the
right
to
"hire
and
fire"
to
employers
contrary
to
labor
laws.
The verdict of the Supreme Court on July 26, 2002 also went contrary to government's decision to
relax labor laws. The Court has instructed the government to initiate necessary steps towards
reviewing provisions in the treaty and the Labor Act to issue work permit for foreigners.
The parliament has even passed International Financial Center Bill in 1998 that contravenes the
Nepalese people's right to work, right to information and citizenship rights.
A Labor Force conducted in 1998-1999 unveils that about 41 percent of the total 4.9 million children
aged between 5 to 14 years are child labor involved in agriculture and even in worst forms of child

BY SAMRAKT DHAKAL

labor practices, such as rag-pickers, carpet workers, mines workers, porters, bonded labor and child
trafficking. About 12,000 girls are trafficked each year. Child labor practices continue due to the
laxity in the implementation of Child Labor Act 1999.
GEFONT conducted a survey research in 2001 in 750 enterprises (textile, garment, jute, spinning mills, tea
plantation, printing press, carpet, cement, chemical iron, food and beverage, hotel, construction,
transportation, agriculture, etc) to test the "effective implementation of labor laws" since the enactment of
Labor Act 1992.











On recruitment process, for example, regarding the granting of appointment letter, making
permanent after working 240 days, an advertisement for recruitment and employment on contract
basis on permanent nature of jobs, the survey result reveals that only 38 percent of enterprises
provides appointment letter to their workers, 20 percent made workers permanent after the
stipulated days of work, 11 percent did advertise before recruiting workers and 40 percent did not
employ workers in contract in permanent nature of works.
On working hours and facilities, for example, the survey shows that 63 percent of enterprises
did have fixed working hours (8 hours a day), only 44 percent of them paid for over time work, and
42 percent of them implemented minimum wage.
On provision of leaves, such as, weekly rest, public holiday, compassionate leave, house leave,
sick leave, and maternity leave the survey result shows that 64 percent of enterprises provides
weekly leave, very few of them provide 45-day maternity leave, 55 percent provides both public
holidays and compassionate leave and 50 percent provides house leaves.
On trade union rights, 40 percent of the enterprises accepts the charter of demands, in 42
percent of the enterprises management discusses about the collective bargaining process and in 64
percent of enterprises, collective agreements and decisions made by the government are not
implemented. Thirty-seven percent of enterprise has tried to harass the establishment of unions
while 35 percent of enterprises frequently harass the workers involved in union activities.
On occupational safety and health 62 percent of enterprises has treatment facility during
accident and injury, 15 percent of enterprises has compensation during sickness, 15 percent has
health check up facility, 22 percent has accident insurance and 23 percent has treatment facility.
On the worker-management relationship and regulation, 24 percent of the enterprises has
their own regulations and 7 percent has constituted labor relations committee according to Labor
Act 1992. Most of the organized sectors have their own regulation and labor relation committee in
each enterprise to settle industrial disputes.

In 1999, Industrial Relations Forum conducted a study on labor disputes. Based on 150 cases sampled from
the court, it is found that over 56 percent of the cases was related to employee's dismissals while another
23 percent was related to remuneration. On an average it took nine month to settle the case. These findings
vividly indicate that violation of labor rights is frequent. Carpet sector is a major one which does not
maintain even minimum norms and labor standards. There is an increasing trend of recruiting workers in
casual and contract basis, agricultural and construction sectors host big number of guest workers and
majority of the enterprises are not prepared to operate the labor relation committee. Bulk of enterprises
ignores occupational health and safety measures. Trade unions blame that Labor Departments are often
biased in tripartite negotiations, influenced by the government in power and suffer from inadequate
personnel, legal jurisdiction and government's neglect. Yet, compared to trade unions employer's council
Federation of Nepalese Chambers of Commerce and Industry (FNCCI) is very much institutionalized and is
backed by research and development, specialized departments, government's backing and international
support. To solve some of the problems underlined above, Nepalese trade unions are demanding for a Code
of Ethics for Business Communities and MNCs and a legislation for ethical business practices.
The situation of trade unions since June 2002
After the declaration of the state of emergency in November 2001, the law and order situation of the
country sharply deteriorated causing the shutdown of industries and business and, consequently,
accelerating the process of job layoffs of workers. This process has badly affected enterprise level trade

30

BY SAMRAKT DHAKAL

unions. Trade Union Acts require compulsory renewal of all the enterprise level registered trade unions in
every two years. Those duly renewed and registered ones are called "active unions." Based on the data
provided by 10 Labor Departments of the country until June 2002, the analysis below explains the situation
of
trade
unions
in
Nepal.
The year 1999 can be regarded as the most favorable period for union registration. The year 2000 marks a
declining trend owing to the growth of Maoist attacks on industries and closing of many ailing factories by
the government. This brings the union registration trend back to 1993, pointing a disturbing trend in Nepal's
labor market. Owing to a lack of systematic record keeping system about the renewal and registration
system in the Labor Department, it is very difficult to present accurate picture. Official records show that
there were 1,491 enterprise level unions until June 2002. Out of those the registration of 731 unions have
been abrogated. All the federations are badly affected in terms of cancellation of the registration of unions.
The labor Court has announced the cancellation of registration of five trade unions which were registered
with fake names and signatures. They are:







Nepal
Nepal
Nepal
Nepal
Nepal

National Independent Shopkeepers Workers' Union
National Independent Grill Workers' Union
Electric, Electronics Technicians' Union
Independent Trekking Workers' Association
Independent Construction Workers' Organization

General Focus of Trade Union Activities












Trade Union education/ training/ workshop/exposure
Networking/solidarity building
Democratization of Workplace
Policy Intervention at various levels
Occupational Health and Safety measures
Social security
Elimination of child labor/ bonded labor/ forced labor and caste discrimination over Dalit community
Campaign and education on gender equality at workplace
Collective bargaining agreements
Lobbying and collective action

Joint Initiatives of Trade Union Federations







31

Dialogue between NTUC and GEFONT for creating a joint high-level national confederation. A highlevel task force has been formed for this. They have agreed to work jointly, at least for one year, on
the following issues:
 Full implementation of Labor Act
 Authentic membership verification process
 Working unity among affiliated federations
 Addressing terrorism and its impact on workers
 Formation of Occupational Health and Safety
All three unions (NTUC, GEFONT and DECONT) are involved in Poverty Reduction Strategy Program
(PRSP)
Trade Union Committee for Gender Equality and Promotion (TUCGEP) secretariat has been created
in 2000 on gender issue. Chiefs of women departments, women leaders and executive level male
counterpart of all trade union federations man it.
Under the initiative of IFBWW, there is a joint committee of GEFONT, NTUC and DECONT in the
Construction,
wood
and
building
sectors.
Under the ICEM initiative a national steering committee has been established for Chemical, Iron and
Energy Sector of NTUC, GEFONT and independent unions.
NTUC and GEFONT affiliates at hotel and catering sectors have constituted a Joint Struggle
Committee.

BY SAMRAKT DHAKAL






On Foreign Employment and Migrant Workers all the federations have established a common
position.
On the revision and promotion of Minimum Wages all the federations have established a common
position
All the federations consult among themselves regarding their representation in ILO, the
government, and even MNCs.
Social Security Bill has been tabled by the NTUC in the parliament which has been supported by all
federations.

Role of FES in Strengthening Trade Union Movement in Nepal
FES Nepal Office is cooperating with its TU partners to achieve the following objectives:




Professionalization of trade Unions
Improving knowledge, skills and information among trade unions and assist them in building
solidarity

To meet these broad objectives following activities have been carried out:














Preparation of training manuals on Information Handling, Documentation and Union Office
Management
Material support in the forms of journals and books
Trainers' Handbook on Trade Union Organization, Trade Union Rights and Collective Bargaining
Financial support to invite technical experts related to Trade Union education
Training on the issues of collective bargaining, co-determination, labor economics, health and safety
for the workers, trade union rights and responsibilities and status of informal sector workers in
Nepal
Seminars and research publication on labor legislation, strengthening union capacity through
membership drives, organizing female workers through union campaigning, leadership
empowerment, the impact of structural adjustment and globalization on the workers, women in
garment industries
Facilitation of international and regional exposure of trade union leaders and workers through
participation in international seminars, workshops and training programs
Providing scope for the unions and their leaders to share experiences and conduct joint national and
regional programs with International Trade Secretariats such as
International Transport Workers Federation (ITF); International Federation of Metal Workers (IMF);
Union Network International: Asia-Pacific (UNI-APRO); International Federation of Chemical,
Energy, Mine and General Workers Union (ICEM); International Federation of Building and Wood
Workers Union (IFBWW); Asian and Pacific Regional Organization of the International Federation of
Commercial, Clerical, Professional and Technical Employees (APRO-FIET); Public Service
International (PSI); International Federation of Journalists (IFJ); Education International (EI);
International Labor Organization (ILO); International Union of Food, Agricultural, Hotel, Restaurant,
Catering, Tobacco and Allied Workers Association (IUF); Postal, Telegraph and Telecommunication
International (PTTI); International Confederation of Free Trade Unions: Asian-Pacific Regional
Organizations (ICFTU-APRO); and FES-organized regional and international conferences, including
the extension of cooperation to South Asian Trade Union Council (SAARTUC).
Translation and publication of various trade union educational materials into simple Nepali language
and dissemination of those materials to the national and district offices of the unions. Besides these
three federations, other smaller trade unions have also benefited from these publications.

RESPONSIBILITY OF TRADE UNION


32

Preparation of training manuals on Information Handling, Documentation and Union Office
Management.

BY SAMRAKT DHAKAL












Material support in the forms of journals and books.
Trainers’ Handbook on Trade Union Organization, Trade Union Rights and Collective Bargaining
Financial support to invite technical experts related to Trade Union education.
Training on the issues of collective bargaining, co-determination, labour economics, health and
safety for the workers, trade union rights and responsibilities and status of informal sector workers
in Nepal
Seminars and research publication on labour legislation, strengthening union capacity through
membership drives, organizing female workers through union campaigning, leadership
empowerment, the impact of structural adjustment and globalization on the workers, women in
garment industries.
Facilitation of international and regional exposure of trade union leaders and workers through
participation in international seminars, workshops and training programmes.
Providing scope for the unions and their leaders to share experiences and conduct joint national and
regional programmes with International Trade Secretariats such as International Transport Workers
Federation (ITF); International Federation of Metal Workers (IMF); Union Network International:
Asia-Pacific (UNI-APRO); International Federation of Chemical, Energy, Mine and General Workers
Union (ICEM); International Federation of Building and Wood Workers Union (IFBWW); Asian and
Pacific Regional Organization of the International Federation of Commercial, Clerical, Professional
and Technical Employees (APRO-FIET); Public Service International (PSI); International Federation
of Journalists (IFJ); Education International (EI); International Labour Organization (ILO);
International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers
Association (IUF); Postal, Telegraph and Telecommunication International (PTTI); International
Confederation of Free Trade Unions: Asian-Pacific Regional Organizations (ICFTU-APRO); and FESorganized regional and international conferences, including the South Asian Trade Union Council
(SAARTUC).
Translation and publication of various trade union educational materials into simple Nepali language
and dissemination of those materials to the national and district offices of the unions. Besides these
three federations, other smaller trade unions have also benefited from these publications.

Rights, duties and functions of Trade Union:
In addition to the functions, duties and rights mentioned in the constitution of Trade Union.
The functions, duties and rights of the Trade Union will be as follows:





To take necessary action and implement necessary programs in order to achieve the Trade
Union objectives mentioned in Article 9 Sub-section (1) of this Act.
To make the members to participate in the election of the Enterprise Level Authorized Trade
Union.
To allow the workers to follow the decision made by the Enterprise level Authorized Trade
Union.

9(B)* Right, Duties and Functions of Trade Union Association and Federation:
In addition to the functions, duties and rights mentioned in the constitution of Trade Union association and
Trade Union Federation, the function, duties and rights of the Trade Union Association and Federation will be
as follows:





33

To take necessary actions and implement necessary programs in order to achieve the
objective of Trade Union Association and Trade Union Federation as mentioned in Article 9
Sub-section (2) of this Act.
To make members to participants in the election of Trade Union Association and Trade
Union Federation.
To allow members to follow the decisions of the trade union association and Trade Union
Federation.

BY SAMRAKT DHAKAL






To follow necessary measures to resolve labour disputes by representing the workers in
important and national level policy issues on labour disputes and to negotiate with the
government, various types of Professional Associations and Federation and Enterprises.
To negotiate with the concerned enterprises and management on behalf of the Enterprise
Level Trade Union.
To establish and operate different type of funds for the interest and welfare of workers.
To make public the oppression on workers and Trade Union and to issue necessary warning
to the concerned enterprises for the same.

Theories of trade unionism
Theories of Trade Union Organization

The extensive literature on the theory of labor organization stresses the principle that a
society controlled by organized workers is more desirable than the system of control by
property owners.

We have already mentioned the formation of the revolutionary party which Marx believed
was essential to the transformation of society into the socialistic state. The Webbs
advocated the complete unionization of wage earners and the direct participation of the
organized workers in government through the agency of a labor party whose membership
would be identical with the membership of the trade unions. This program presupposes a
democratic government in which majority rule is cherished. The essential principles of this
plan have been achieved in England. Of quite a different character was the anarchistic
theory of Michael Bakunin (1814-1876). He believed in the strong economic organization of
all wage earners, but he was confident that any attempt to achieve political reforms would
only lead to a diluting of the basic philosophy of the working men's movement. Economic
equality should come first, principally by the confiscation of capital. The method he
proposed was international organization of wage earners for revolutionary purposes. The
Syndicalist movement has had much more extensive growth in Europe than in America. One
of its leading exponents was Georges Sorel (1847-1922), a one-time Marxist who had lost
patience with the Socialist movement and allied himself with the more militant Syndicalists.
His program depended upon the organization of wage earners into syndicates (associations
of working men), not unions. The aim of the organization was not political, there was no
intention of taking over the power of the state. General strikes and violence were looked
upon as the chief means of securing control of industry, and domination of political
institutions would follow automatically.

A less violent form of Syndicalism has been advocated by the Guild Socialists. R. H. Tawney
and G. D. H. Cole, famous English economists, are prominent leaders of Guild Socialism.
They believe that by gradual evolutionary means, workers organized along industrial lines
can assume control of industry without at the same time controlling political institutions.

34

BY SAMRAKT DHAKAL

Perhaps the most conservative of all labor movements is to be found in the development of
the American trade unions. As outlined by Samuel Gompers, founder of the American
Federation of Labor, union organization should be confined to the skilled trades, which by
the very nature of their control of skill could bring pressure upon employers to achieve their
aims. The unions should also control the training of new craftsmen through systems of
apprenticeship. The labor unions as a whole would not participate directly in political
activity, nor would they become affiliated with any political party. In general their policy
could be described as "rewarding their friends and punishing their enemies." Their chief
weapons were strikes and boycotts. In dissatisfaction with the aristocratic type of union,
John L. Lewis, president of the United Mine Workers of America, sponsored a new type of
labor union called the industrial union. As described by Lewis, every man in a given
industry, regardless of his craft or job, should be united in one union. The strength of such
would lie not in the withholding of essential skills but in the complete organization of all
workers in an industry. The policy of the industrial unions in politics has been to give direct
support to the candidate most favorable to labor, but only as a temporary expedient until a
party representing labor can be formed.

The absence of the names of the theoretical economists from this discussion of labor
organization may be surprising. One must realize that the great economists of the past
believed that the economic system could operate only under free competition. Labor
organizations were unborn or in their infancy at the time. The reaction of the economists,
therefore, was either to ignore the existence of trade unions or to look upon them, where
they were present, as an evil of more or less consequence. That Adam Smith should have
been aware of labor organizations and the problems associated with them even in his day is
a true measure of his stature. Even Mill, for all his sympathy with the working man, felt that
unions were useless. The disappearance of the freely competitive market—if such ever
existed save in the minds of economists—has made it easier for later writers to discuss the
theory of trade union organization as an important aspect of modern economy

35

BY SAMRAKT DHAKAL


UNIT 4 INDUSTRIAL DISPUTE AND GRIEVANCE
CONCEPT
An industrial dispute may be defined as a conflict or difference of opinion between management
and workers on the terms of employment. It is a disagreement between an employer and
employees' representative; usually a trade union, over pay and other working conditions and
can result in industrial actions. When an industrial dispute occurs, both the parties, that is the
management and the workmen, try to pressurize each other. The management may resort to
lockouts while the workers may resort to strikes, picketing or gheraos.
An industrial dispute in defined as any dispute or difference between employers and employers,
or between Employers and workmen, or between workmen and which is connected with the
employment or non-employment or the terms of employment or with the conditions of labor, of
any person.

This definition includes all the aspects of a dispute. It, not only includes the disagreement
between employees and employers, but also emphasizes the difference of opinion between worker
and worker. The disputes generally arise on account of poor wage structure or poor working
conditions. This disagreement or difference could be on any matter concerning the workers
individually or collectively. It must be connected with employment or non-employment or with the
conditions of labor.
From the point of view of the employer, an industrial dispute resulting in stoppage of work means
a stoppage of production. This results in increase in the average cost of production since fixed
expenses continue to be incurred. It also leads to a fall in sales and the rate of turnover, leading
to a fall in profits. The employer may also be liable to compensate his customers with whom he
may have contracted for regular supply. Apart from the immediate economic effects, loss of
prestige and credit, alienation of the labor force, and other non-economic, psychological and social
consequences may also arise. Loss due to destruction of property, personal injury and physical
intimidation or inconvenience also arises.
For the employee, an industrial dispute entails loss of income. The regular income by way of
wages and allowance ceases, and great hardship may be caused to the worker and his family.
Employees also suffer from personal injury if they indulge into strikes n picketing; and the
psychological and physical consequences of forced idleness. The threat of loss of employment in
case of failure to settle the dispute advantageously, or the threat of reprisal action by employers
also exists.
Prolonged stoppages of work have also an adverse effect on the national productivity, national
income. They cause wastage of national resources. Hatred may be generated resulting in political

36

Industrial disputes

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