Business Legislation in Nepal, Labour Legislation

The history of business legislation in Nepal is brief. The first law to govern the management and other activities of joint-stock businesses in Nepal was the Company Act, which was enacted in 1936. The 1963-adopted Muluki Ain is also pertinent for corporate entities.

The nation's foundational law is the constitution. To the extent of such inconsistency, all laws that are inconsistent with it are null and void. The Supreme Court is the highest court in the legal system. It has the unprecedented authority to deem any statute unconstitutional if it conflicts with the Interim Constitution.

The laws relating to a business or economic in Nepal can be broadly classified as follows:

• General Business Legislation:
  • Laws governing the registration, structuring, and administration of business firms are included in general business legislation.
• Mines and Natural Resources Legislation: 
  • Laws pertaining to mines, minerals, and other natural resources are included in the category of mines and natural resources legislation.
• Labour Legislation: 
  • Laws governing wages, work hours, bonus payments, dispute resolution, unionization, and labor relations are all included in labor legislation.
• Financial and Investment Legislation:
  • Laws governing investments, taxes, foreign exchange, subsidies, the stock market, and technology transfers are all included in the category of financial and investment legislation.
• Social Legislation:
  • Laws governing trademarks, copyright, consumer rights, consumer interests, and environmental protection are all included in social legislation.
• The Sectoral legislation: 
  • The laws governing sectoral management, such as that of tourism, railroads, civil aviation, forestry, motor vehicles and transportation, electricity, and water resources, are included in this category.

Labour Legislation

The Nepali Interim Constitution and other laws have made a number of provisions to safeguard and advance labor interests. The basis for the establishment of a labor market in the nation has thus been supplied by these provisions. The right to work, the outlawing of slavery and forced labor, the freedom of assembly, organization, and speech, the freedom of trade, business, and welfare, and the prohibition of child labor are a few of the significant provisions.

The Nepal Factory Workers' Act of 1959 was replaced by the Labour Act of 1992. The tea plantations formed in accordance with the applicable law, business and industrial firms, enterprise and service units, and this Act are all covered. The Act's crucial clauses cover things like job security, working conditions, minimum pay, welfare and health protections, a code of behavior, and employees' rights.

The Trade Union Act of 1992 governs the growth of unions and supports both collective bargaining and freedom of association. There are three levels of trade unions that have been proposed: general trade union federations, trade union federations, and establishment level trade unions. The Act supports enterprise-level collective bargaining. Thus, trade unions are supposed to advance the socioeconomic standing of employees, enhance working conditions, and aid in increasing productivity.

The Bonus Act of 1974 provides provisions for the bonus distribution among a commercial firm's employees. Businesses that are profitable should set aside 10% of their net profits for bonus payments to their staff members. There is a cap on bonus eligibility, and the amount of bonus given is connected to attendance at work. If the bonus account has more money in it than the bonus that was awarded, the excess is credited to the welfare fund, which is jointly maintained by management and employee representatives.

The Immigration of Nepalese Workers Act, 1985 has provisions to control and regulate this process. It has established procedures for recruiting persons for international work, appointing recruitment agents and preserving their records, and inspecting the records and procedures of the recruiting agents. Additionally, the legislation calls for the establishment of an advisory committee to provide advice to the government on areas such as promoting foreign employment, combating malpractice, and other relevant issues.

The Industrial Training Act of 1982 mandates that industrial firms teach Nepalese personnel in industrial skills. To create training strategies, a Training Council comprising representatives from the government, industrial firms, labor enterprises, and Tribhuvan University has also been envisioned. The Council has not yet been formed, though.

In 1995, the Labour Court Regulation Act was passed. The Labor Court was more easily established because to this Act. The Labour Court's role is to hear labor disputes between labor unions and management and render a decision to resolve them. The reason the labor court was founded was because the regular court system has drawn-out and complicated processes. The Labour Court deals with systemic and interpersonal concerns that call for an equitable strategy rather than a strictly legal one. As a result, the Labour Court has the authority to resolve labor relations disputes using both legal and equitable standards.

In Nepal, child labor is not a recent development. Child labor wasn't recognized as a problem until the early 1990s, when Western consumers ceased importing carpets from Nepal because they were made with the usage of minors. The Children Act, 1991 was subsequently published by the government. The Act controls and outlaws the hiring of minors in factories under the age of 14. Additionally, the Rules of the Act have given children additional protections from harm and abuse, including child labor exploitation. Any infringement of the Act's rules is subject to legal repercussions. The RUGMARK accreditation for carpet export excludes child labor. In 2001, the Government promulgated Child Labour Act in prohibit and regulate the employment of children in different sectors of the economy, including their employment in household activities.

Nepal has ratified a number of ILO conventions. Nepal has ratified five conventions thus far. These include the 1951 Convention on Equal Pay for Work of Equal Value for Men and Women, the 1958 Convention on Discrimination in Employment and Occupation, the 1970 Convention on Fixing the Minimum Wage, the 1971 Convention on the Application of the Weekly in Industrial Undertakings, and the 1976 Convention on Labor Standards. The Labour Act and its regulations include the required Conventions provisions.

Reference:

• labour.gov.hk/eng/legislat/content.htm

• Pant, P. R. (2009). Business Environment in Nepal (SIXTH ed.). Kathmandu, Nepal: Buddha Academic Publishers and Distributers.

• wikipedia.org/wiki/Legislation