It was my pleasure to present a technical paper at the Social Dialogue organised by the Financial Institute Employees Union of Nepal (FIEUN Nepal). The topic of the technical paper from the perspective of 'Nepal's Changing Landscape: The Role, Challenge and Future of Trade Unions in BFIs". The main theme of the paper was to explore whether labour rules can be omitted in essential services such as BFI. This question is increasingly relevant to the confusing verdict from the full bench of the Supreme Court, and there are many speculations about whether BFI services, as an essential service, have no jurisdiction under the Labour Act.

1. Nepal's Changing
Landscape: The Role,
Challenges, and Future
of Trade Unions in BFIs
- Youb Raj Basnet, Labour & Employment Expert

2. Presentation Structure
01
Economic and Labor Context
Understanding Nepal's changing situation.
02
Global Trends in Trade Unionism
What's happening with trade unions in important
service industries around the world.
03
New Changes in Nepal BFI Sector
Important changes and what they mean.
04
Role and Achievements of Trade Unions in Nepal BFI
How trade unions help employees and keep Nepal BFI stable.
05
Legal Framework
Understanding labor laws and NRB rules.
06
Expectation and Conclusion
Key Expectation from Regulatory Authority, Future of Trade union in BFIs

3. Nepal’s Socioeconomic Shift: A Changing Landscape
Nepal is going through a major social and economic change. Here are
some key trends:
• Economic growth is slowing down. More young people are leaving
the country. This creates problems for local job markets and
economic stability.
• Digital technology is changing financial services. This means
Nepal BFI needs new skills and ways of working.
• The Nepal Rastra Bank (NRB) is adding more rules. This helps keep
Nepal BFI stable and protects its customers.
• People expect much better financial services. This pushes Nepal
BFI to find new ideas and improve.
• Around the world, fewer people are joining traditional unions. This is
noted by the ILO (2022) and shows big changes in how people work.
• Even with more skilled workers, jobs are still uncertain. This means
we need smarter ways to manage work.
References: ILO (2022). World Employment and Social Outlook. Geneva: ILO.
World Bank (2023). Nepal Development Update.

4. Global Union Trends: Adapting to New Times
1
How Unions Have Changed
Unions have evolved from strong protests to
negotiations. Now, they use facts to guide their
actions.
2 Fewer Union Members
Many developed countries see fewer people joining
unions. This makes unions rethink their approaches.
3
More Service Industry Unions
Unions are growing in service jobs, like finance,
health, and education. This shows how the economy
is changing.
4 Focus on Key Services
There's a greater focus on unions' role in important
services, Nepal BFI stability, and protecting
customers.
5
Three-Way Discussions
It's increasingly important for the government,
employers, and unions to work together to solve
complex labor issues.
Reference: OECD (2021). Employment Outlook. Visser, J. (2019). “Trade unions in transition.” Economic and Industrial Democracy.

5. Essential Services: Global Norms and Interpretations
International labor standards help us understand what essential services are. According to ILO Convention No. 87, No. 98, and CEACR r
What are Essential Services?
Essential services are those whose
stopping would put the life, safety,
or health of many people at risk.
Nepal BFI Services
Nepal Bank, Financial Institution and
Insurance services is now
considered essential like many
countries (for example, Canada,
Singapore, EU). This is because they
play a very important role in keeping
the economy stable.
Common Points for
Essential Services
• Right to join a union: This right
is recognized everywhere.
• Limited right to strike: Workers
can strike, but there are often
rules to prevent important
services from stopping.
• Required problem-solving: In a
crisis, disagreements must be
settled by a neutral third party.
• Protecting customers: This is a
top priority to keep the public
safe.
Reference: ILO (1983–2023). General Survey on Freedom of Association & Collective Bargaining.

6. Banking as an Essential Service: International Examples
Singapore: Tripartite Harmony Model
• Categorization: BFI is seen as critical for a stable financial system.
• Union Collaboration: Unions work closely together in a
"tripartite harmony model." This means the government,
employers, and unions cooperate.
• Focus: The main goal is to keep financial services steady and running.
Canada: Mediation and Essential Agreements
• Federal Mediation: A government mediation service must
be used before workers in essential services can go on strike.
• Essential Service Agreements: Required agreements are
made to ensure critical services keep running during
worker disputes.
• Focus: Making sure important economic activities continue
through organized ways to solve disagreements.
Reference: Fudge, J. (2020). “Essential services and labour rights.” Industrial Law Journal. UK Dept for Business & Trade (2023).
India: New labour codes (2025) have further tightened strike conditions, requiring longer notice periods. Labour codes appl
United Kingdom: Statutory employment protections, equality and working time rules, and engaging with unions
under collective bargaining frameworks.

7. Trade Unions in Nepal BFI
Well-Organized Unions
Trade unions in Nepal BFI are well-
structured and often linked to political
groups. They play an important role in
how workers and management
interact.
Widespread Presence
Unions are found in almost all
commercial banks and large financial
institutions that make up Nepal BFI,
giving many employees a voice.
Collective Agreements
**Collective bargaining agreements
(CBAs)** are common. These
agreements cover key job rules and
working conditions for employees.
Key Victories
Unions have achieved important things for employees,
including **job security, better benefits, and clear ways to
handle complaints.**
Main Challenges
Problems come from unions being too involved in politics
and being divided into many groups. This can make it hard
for them to speak up together effectively.
Reference: Adhikari & Ghosh (2021). “Labour Relations in Nepal Bank.” South Asian Journal of Human Resource Management.

8. Key Roles of Trade Unions in Nepal BFI
Trade unions in Nepal Bank, Financial Institution and Insurance play many important roles. They help employees, promote discussions
between workers and management, and support economic stability.
Protecting Employee Rights
• Making sure pay is fair and competitive.
• Fighting for good benefits like health insurance and retirement plans.
• Setting rules for work hours and leave so employees have a
good work-life balance.
Encouraging Communication
• Working with management to create fair employee contracts.
• Making sure the workplace is fair, with clear ways to solve problems.
Keeping the Economy Stable
• Stopping big problems in important financial services.
• Helping financial services keep running, even when things are
tough.
Helping Employees Grow
• Supporting training and development for employees.
• Promoting a work culture that rewards good performance and
growth.

9. Contribution in Times of Crisis: Resilience and Adaptation
Trade unions in Nepal BFI have shown their important role, especially when things were difficult.
Money Shortage
When Nepal BFI faced money problems, unions kept
employees' spirits up. They made sure bank services
continued without causing panic or big problems.
COVID-19 Pandemic
Unions helped keep Nepal BFI employees safe during
the pandemic. They worked to get personal protective
equipment (PPE) and better working conditions.
Digital Banking
As Nepal BFI shifted to digital services, unions pushed
for training. They ensured employees learned new skills
to use the new technology.

10. 1.
Challenges
Facing
Trade
Unions in
Nepal’s BFIs
Nepal's banking and
financial institutions
(BFIs) are experiencing
rapid transformation,
bringing a unique set
of challenges for trade
unions. These
challenges range from
technological
advancements to
complex regulatory
environments and
shifting public
perceptions.
Understanding these
dynamics is crucial for
unions to adapt and
remain relevant.

11. Digital Disruption & Skill Gaps
The rapid integration of digital technologies and
automation in banking is creating significant skill
gaps among the workforce. Unions face the
challenge of ensuring members are equipped for
the future of work, advocating for training, and
managing the impact of job displacement.
Work Intensification & Mental Stress
Increased pressure for efficiency, longer working
hours, and the demands of a fast-paced digital
environment contribute to work intensification and
mental stress among BFI employees. Unions must
address these well-being concerns through
advocacy for healthier work-life balances and
support systems.
Political Interference
Political interference in union activities and
appointments can compromise their independence
and effectiveness, diverting focus from genuine
labor issues to partisan agendas. Focus on the core
mission of trade unions.
Declining Public Trust
A decline in public trust and perception of trade
unions can weaken their bargaining power and
legitimacy, making it harder to rally support for their
causes and influence policy decisions. Union to
work closely with pubic to obtain trust.
Opportunities of Trade Unions in Nepal’s BFIs

12. Opportunities of Trade Unions in Nepal’s BFIs
Win-Win with Bank Boards
Unions often find themselves in
conflict with bank boards over the
implementation of performance-
based cultures, which can be
perceived as detrimental to job
security and fair compensation if
not managed transparently and
equitably.
Regulatory Restrictions
Regulatory restrictions! Work
closely with regulatory authority
on labour rights.
Weak Evidence-Based Advocacy
Create robust data and research to support Union’s advocacy efforts -
presenting compelling arguments to management and policymakers.

13. 2. Key
provisions
of Labour
Act and
Regulation
Nepal
01
Right to Unionize
Employees in BFIs have the fundamental right to
form or join trade unions of their choice, enabling
collective representation and advocacy.
02
Collective Bargaining Processes
The Act outlines clear procedures for collective
bargaining agreements (CBAs), facilitating
negotiations between unions and management on
terms and conditions of employment.
03
Compulsory Mediation
Before any strike action can be initiated, the Act
mandates compulsory mediation, emphasizing
peaceful resolution of disputes through dialogue
and negotiation.
04
Essential Services Categorization
The government, through official gazette, has the
power to categorize certain services as "essential,"
which may impose restrictions on strikes to ensure
uninterrupted public services.
05
Health & Safety Obligations (OSH)
Employers are legally bound to ensure
occupational safety and health (OSH) standards,
protecting employees from workplace hazards.
06
HR Policy Compliance
All human resource policies within BFIs must
comply with established labor standards, ensuring
fair treatment and adherence to legal provisions.
Reference: Labour Act (2074).

14. Labour Regulations 2018
• Collective bargaining
• Grievance handling
• Social Security Fund
• Coe of Conducts
NRB Regulations on Labour Relations
• Unified Directives: Sets HR compliance standards, risk
management staffing, and limits staff political activities in the
workplace.
• BFI Merger/Acquisition Regulation: Addresses job security,
redundancy policies, and mandatory staff rationalization
plans during institutional consolidation.
• Corporate Governance Directive: Restricts union influence
in management decisions and sets criteria for promotion and
performance evaluation.
Reference: Nepal Rastra Bank (NRB Unified Directives, 2024).

15. 3. Gaps in Nepal’s Current Framework
Despite the existing legal and regulatory framework, several critical gaps
hinder effective labor relations and union functions within Nepal's BFIs. These
deficiencies create ambiguity, inconsistency, and limit the potential for
constructive social dialogue.
Undefined "Essential Service"
There is no clear and precise definition of "essential service" specifically for
the banking sector, leading to arbitrary interpretations and potential
misapplication of strike limitations. Only court order – no defined policy.
Inconsistent Enforcement
The enforcement of labor rights and regulations often lacks consistency,
resulting in disparities and undermining the trust in the legal system.
Lack of Tripartite Institutionalization
Formal mechanisms for collaboration between the government,
employers, and unions (tripartism) are weak or non-existent, limiting
coordinated efforts in policy-making and dispute resolution.

16. Expectation and Conclusions
1. Expectation from Regulatory Authority
Categorized as
Essential Service
• How will we implement labour
rights?
• How do we ensure human rights
principles?
• How do we promote ethics and
compliance?
• How do we ensure safety and
security of workers?
If not Labour Act and
Regulations
Expectations!
1. Better cooperation between the authorities
2. Create policy and regulation from regulatory
authority.

17. Expectation and Conclusions
2. Expectation from Regulatory Authority - NRB
Strengthen compliance
with national and
international labour
standards - Alignment with
ILO Core Labour Standards,
Introduce Descent Work
Indicators for BFIS and
Compliance Audit – also
from the perspective of
working hours, overtime
pay, leave provisions, non-
discriminatory recruitment
and OSH
Strengthen Social Dialogue
and Trade Union
Participants
* Encourage tripartite
mechanism
* Strengthen Worker
Representation
Committees
Protecting Labour Rights
During Digital and
Structural Changes - 1.
Upskilling and reskilling
requirement (x% of profit
to trainings etc) 2.
Safeguard jobs amid
automation
Promote Ethical and Safe
Work Environment 1. OSH
Guidelines for BFIs 2. Zero
Tolerance for Exploitation
Inclusion of Labour Rights
in Compliance and
Licensing a)license
compliance and 2) penalty
against violations

18. Expectation and Conclusions
3. Future Work Direction for Trade Union in BFIs
To navigate the evolving landscape of Nepal's banking sector, trade unions must strategically
realign their focus and operations. This involves a shift towards more data-driven advocacy,
enhanced professionalization, and a renewed commitment to employee well-being.
Evidence-Driven Unionism
Focus on collecting data on workload, stress, and digital transition impacts to inform policy
research and advocacy efforts within unions.
Professionalization
Promote neutrality, cultivate technical leadership to enhance credibility and effectiveness.
Social Dialogue 2.0
Develop modern CBAs that address digital transformation, skill upgrading, and performance-
based incentives.
Employee Well-being
Implement programs focusing on mental health support and burnout prevention to ensure a
healthy and productive workforce.

19. Thank you
- Youb Raj Basnet