Relevant Labor Laws in Nepal

What are the relevant labor laws in Nepal?

The Labor Act 2017 (“Labor Act”), the Labor Regulation 2017 (“Labor Regulations”) and the Social Security Fund Act 2017 govern labor law in Nepal.

What are the objectives of the Labor Act?

The objective of labor acts, or labor legislation, is to establish and protect the rights of workers and regulate the employer-employee relationship. These acts are typically enacted by governments to ensure fair and equitable treatment of workers, promote safe working conditions, and provide a framework for resolving labor disputes. The specific objectives may vary from country to country, but generally, labor acts aim to achieve the following:

1. Worker Protection: Labor acts seek to safeguard the rights and interests of workers by setting standards for wages, working hours, leave entitlements, and other employment conditions. These laws help prevent exploitation, discrimination, and unfair labor practices.
2. Health and Safety: Labor acts often include provisions for workplace safety and health regulations to protect employees from hazards and ensure their well-being. This includes guidelines for occupational health, safety training, protective equipment, and accident prevention measures.
3. Employment Contracts: Labor acts establish the legal framework for employment relationships, defining the rights and obligations of both employers and employees. They typically require written employment contracts, which specify terms and conditions of employment, such as job duties, compensation, benefits, and termination procedures.
4. Collective Bargaining: Labor acts often recognize the right of workers to form trade unions or other labor organizations and engage in collective bargaining with employers. These laws facilitate negotiations between employees and employers regarding wages, working conditions, and other employment terms.
5. Dispute Resolution: Labor acts provide mechanisms for resolving disputes between employers and employees. This may involve establishing labor courts or tribunals, creating arbitration procedures, or setting up mediation processes to address conflicts related to employment rights, grievances, or collective disputes.
6. Social Security: Some labor acts also address social security provisions, including benefits such as health insurance, pensions, unemployment insurance, and worker’s compensation. These measures aim to provide financial protection and support for workers in times of need or when they retire.

The overall objective of labor acts is to promote fairness, equity, and social justice in the workplace, ensuring that workers are treated fairly, their rights are protected, and their working conditions are safe and dignified.

How do I bring a case before the Labor Court of Nepal?

You can approach the Labor Office as an individual claim and a collective dispute that will help you to resolve the matter within 21 days. Alternatively, you can also send a legal notice to the person concerned stating your grievances and what you want from him/her. You can engage with a lawyer for that. If the legal notice is ignored, you can file a lawsuit with the Labor Court within 1 year of the date on which your money became due. You can call us if you want legal advice from an expert lawyer or even if you want to hire a lawyer.

When should I file a case for misconduct at the labor court?

The aggrieved person may lodge a complaint with the court in respect of any offense prescribed for commencement and dismissal of the labor court. If the Labor Court registers a complaint received through the Labor Office, it shall forward it to the applicant through the same Labor Office and, in the event that the complaint cannot be registered, it shall also inform the person concerned through the same Labor Office.

If you wish to bring a case of misconduct at work before the Labor Court pursuant to Article 75. Section 160 of the Act shall be in accordance with the Rules of Procedure of the Labor Court, 2052.

What is the procedure for hiring foreign nationals?

The procedure for hiring foreign nationals is compulsory to obtain a work permit first in conformity with Labor Law 2074, Sections 22 & 23. If any company or industry wishes to deploy foreign nationals as Chief Executive Officers or a prescribed number of employees, it must be provided essentially by registration. Foreign Nationals technicians employed for less than three months in the repair of machinery, the installation of new technology, similar casual work, or any other work shall be provided simply by recording in the company. Employment agreements must be in the English language as laid down in Labor Law 2074 Sec 27. Foreign nationals may repatriate their income in convertible foreign currency in line with Clause 26.

What is the Employers’ Obligation under the Social Security Act 2074?

Employers in the industry, service, or business of a prescribed nature or area should enroll with the Fund as prescribed in the Nepal Gazette. The Social Security Act obliges the employer to enroll workers in the Social Security Fund within 3 months from the date of appointment of any workers.

Are the government fees applicable during submission?

No government fee is required to list the company or employees under the Social Security Fund.

What are the documents required for the registration of employers and employees under the Social Security Fund?

The rate of the amount to be deposited in the Social Security Fund for Employees and Employees shall be paid at the following rate: the employer shall pay 11 percent of his or her salary and the employee shall add 20 percent of his or her company income per month to the total employee’s basic salary of 31 percent.

Are there any criminal obligations in relation to labor disputes?

The amount of criminal liabilities in dispute is known then the penalty is specified accordingly and, if the amount in dispute is unknown, the Labor Act shall fine them with a penalty of up to 1 lakh or imprisonment of up to 6 months or both. If there are many offenders, the secondary offender will receive half of the penalty for the principal offender.

Supplying unlicensed labor and employment from such suppliers penalties of fines of up to Rs.200,000. If a foreign national is allowed to work without a job, a fine of upto the Rs.200,000, depending on the number of workers, shall be fined with an additional fine of Rs.5,000 per person a month.

If there is discrimination between workers, there is a fine of up to Rs.100,000 and the order of equality can be given Sanctions: Labor Office or Department

If a worker is without a letter of appointment or an employment agreement is a fine of up to Rs.500,000 at the rate of Rs.10,000 per worker; an order for the conclusion of an employment agreement and a letter of appointment is also given.