Labour and Trade Union Act of Nepal

1. 1992

2. Objectives
• To provide the employees and workers
with job security
• To regulate the working conditions
• To ensure the certain other benefits
available to them under the labor laws

3. Definitions
• Employee
• Persons engaged in the administrative functions of the
enterprise
• Worker
• Persons employed on the basis of remuneration to work
in any building, premises, machinery or any part there of
used for any production process or providing service, or
any act relating to such work or for any unscheduled
works and this expression also includes any worker
working at a piece-rate, contract or agreement

4. Definition
• Proprietor
• A person having final authority on the
activities of the Enterprise.
• Manager
• A person appointed for performing the
functions of an enterprise

5. Definitions
• Enterprise
• Any factory, company, organization, association,
firm, or group there of, established under the
prevailing laws for the purpose of operating any
industry, profession, or service, where ten or more
workers or employees are engaged.

6. Applicability
• The act is applicable whole of Nepal &
extends to
• Every enterprise wherein, the number of
workers or employees employed is 10

7. Employment and
Security of Service
• Whenever employees are required, managers should advertise
in order to select the employees and the selected employees
should be provided with an appointment letter.
• Appointment letter should mention the remuneration to be
provided to the employee with clear basic salary and
allowances. (Current minimum basic scale= NPR 6205,
Allowance= NPR 3495)
• The working hours should be clearly mentioned in the
appointment letter. They should be deployed at work for no
more than 8 hours a day with a ½ hr break within 5 hours of
continuous work.

8. Employment and
Security of Service
• Overtime should be paid for extra hours of work.
• The probation period is one year where in if an
employee works for 240 days i.e. 8 months
continuously (without leave), it qualifies as one year.
• One day should be provided as weekly holiday. And
a total of 39 days as yearly holiday.

9. Employment and
Security of Service
• Remuneration increment should be at least the
employee’s half day’s remuneration
• As and when the employee is permanent, the
enterprise should provide the employees with
the benefit of provident fund.

10. Retrenchment and
reinstatement
• Employees cannot be fired once they have
been appointed unless the employee
voluntarily leaves
• If retrenchment is required, the enterprise
should take approval from the labor
department with priority of newer employees
to be removed first with a month’s notice and
compensation as per labor law.

11. Conduct and
Punishment
• Employees may be punished for offence with
prior notice and a chance to submit
clarification within seven days with following
actions:
• Reprimanded
• To withheld annual grade increments
• Suspend ( for maximum 3 months)
• Termination

12. Other Benefits
• Settlement of Labor Dispute
• Collective Bargaining
• Retirement Benefits
• Health and Safety
• Welfare Provision

13. Act 1992
(An act made to provide for the
management of trade union)

14. Introduction
• An organization whose membership consists
of workers and union leaders, united to
protect and promote their common interest.
• provide a framework for a union to engage
in collective bargaining for better workplace
or business standards with employers

15. Objectives
• Improve the working condition
• Establish a good relationship
• Development of Enterprise
• Protect and promote the rights and interest of
workers

16. Registration of Enterprise
Level Trade Union
• Can be enforced at an enterprise
containing 10 or more
employees/workers.
• Register within 15 days
• 25% of workers should be engaged

17. Registration of Trade Union
Federation
• 10 Trade Union constitute a Trade Union
Federation.
• Application with a copy of mutual agreement
shall submit to the Registrar
• Registrar should register within fifteen days
• One cannot be the member of more than one
Trade Union Federation at a time

18. Renewal of Trade Union
• A Trade Union of Enterprise level shall
be required to renew in every two years
• A Trade Union Association and
federation in every four years.

19. Authorized Trade Union
Authorized Trade Union shall be recognized
for the collective bargaining with the
management on behalf of the worker of the
Trade Union.

20. Collective Bargaining
• A negotiation between an organization's
management and Trade Union for salary,
working condition and other matters and
mutual interest.
• Collective bargaining is the fundamental
principle on which the trade union system is
based.
• Collective Bargaining is performed once in 2
years.

21. Cont..
•Trade Union can proceed a proposal of the
employee to the management
•Management are given 21 days to fulfill the
proposed presentation
•If not within 21 days then additional 15 days is
added for negotiations
•If not fulfilled then the Trade Union member
can go for protest and negotiate