Docslide - Us Industrial Relation

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INDUSTRIAL RELATIONS om
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
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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 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.
To raise productivity to a higher level in an era of full employment by
lessening the tendency 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
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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 satisfaction or expression which are
fully cured by good industrial relations. Strikes, lockouts, go-slow 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 cooperation 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
employers 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.
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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--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.
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.
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PLURA
LIST 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.
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.
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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:
Weakness and contradiction inherent in the capitalist system would result
in revolution and the ascendancy of socialism over capitalism.
Capitalism would foster monopolies.
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.
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.
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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.
Legal Framework
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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
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Remuneration
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:
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 Levels 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#.
1.
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 #.
2.
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.
3.
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
4.
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.
5.
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:
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:
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.
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:
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.
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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 Majestys 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 Majestys
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:
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:
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.
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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:
The following particulars shall be included in the Constitution of the Trade Union:
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.
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1(b)* The three months period, as being mentioned in 1A, shall be counted from the date of
operation of this Act.
2.
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.
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:
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:
His Majestys 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 Majestys 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:
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.
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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:
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:
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.
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.
2.
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.
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21. Effect of change in name, merging or dissolution:
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:
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.
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:
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:
the Registrar shall cancel the Trade Union registered under this Act on the following circumstances:
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.
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2.
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.
3.
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.
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 years 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:
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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 Majestys Government:

His Majestys 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 Majestys 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.
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
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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.
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
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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
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.
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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:
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
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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
managements 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 their say in the decision making to
safeguard their interests.
Member services
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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.
Legal assistance - As well as offering legal advice on

employment issues, some unions give help with personal
matters, like housing, wills and debt.
Financial discounts - People can get discounts on

mortgages, insurance and loans from unions.
Welfare benefits unions was to look

Some of the older
members when they
One of the earliest functions of trade

after members who hit hard times.
unions offer financial help to their
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
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1.
It is an association either of employers or employees or of independent workers. They may

consist of :o
Employers association (eg., Employers Federation of India, Indian paper mill

association, etc.)
General labor unions
Friendly societies
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
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Functions relating to organization
Functions relating to the union; and
Functions relating to the society.
Functions relating to trade union members
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 workers 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.
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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 workers participation in management and to strengthen labormanagement cooperation.
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.
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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.
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 peoples 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 governments policies and plans, and to mobilize
peoples 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
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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.
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 tradethus 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
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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 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,
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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).
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
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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 3 rd national
conference.
13.Com Shalikram jamkattel elected in the post of president in 4 rth 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:
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).
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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
Labor Act 1992 (amended in 1998),
Child Labor Act 1992,
Transportation and Vehicles Management Act 1993,
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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
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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:
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
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
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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 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 National Independent Shopkeepers Workers' Union
Nepal National Independent Grill Workers' Union
Nepal Electric, Electronics Technicians' Union
Nepal Independent Trekking Workers' Association
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Nepal 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
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.
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NTUC and GEFONT affiliates at hotel and catering sectors have constituted a Joint Struggle
Committee.
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,
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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
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, 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).
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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:
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.
Theories of trade unionism

Theories of Trade Union Organization
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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.
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
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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 marketif such ever
existed save in the minds of economistshas made it easier for later writers to discuss the
theory of trade union organization as an important aspect of modern economy
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
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economic effects, loss of prestige and credit, alienation of the labor force, and other noneconomic, 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 unrest and disrupting amicable social/industrial relations or community attitudes.
CAUSES OF INDUSTRIAL DISPUTES

The causes of industrial disputes can be broadly classified into two categories: economic and
non-economic causes. The economic causes will include issues relating to compensation like
wages, bonus, allowances, and conditions for work, working hours, leave and holidays
without pay, unjust layoffs and retrenchments. The non economic factors will include
victimization of workers, ill treatment by staff members, sympathetic strikes, political factors,
indiscipline etc.
Wages and allowances:

Since the cost of living index is increasing, workers generally bargain for higher wages to
meet the rising cost of living index and to increase their standards of living. In 2002, 21.4%
of disputes were caused by demand of higher wages and allowances. This percentage was
20.4% during 2003 and during 2004 increased up to 26.2%. In 2005, wages and allowances
accounted for 21.8% of disputes.
Personnel and retrenchment:
The personnel and retrenchment have also been an important factor which accounted for
disputes. During the year 2002, disputes caused by personnel were 14.1% while those caused
by retrenchment and layoffs were 2.2% and 0.4% respectively. In 2003, a similar trend could
be seen, wherein 11.2% of the disputes were caused by personnel, while 2.4% and 0.6% of
disputes were caused by retrenchment and layoffs. In year 2005, only 9.6% of the disputes
were caused by personnel, and only 0.4% were caused by retrenchment.
Indiscipline and violence:
From the given table, it is evident that the number of disputes caused by indiscipline has
shown an increasing trend. In 2002, 29.9% of disputes were caused because of indiscipline,
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which rose up to 36.9% in 2003. Similarly in 2004 and 2005, 40.4% and 41.6% of disputes
were caused due to indiscipline respectively. During the year 2003, indiscipline accounted for
the highest percentage (36.9%) of the total time-loss of all disputes, followed by cause-groups
wage and allowance and personnel with 20.4% and11.2% respectively. A similar trend was
observed in 2004 where indiscipline accounted for 40.4% of disputes.
Bonus:
Bonus has always been an important factor in industrial disputes. 6.7% of the disputes were
because of bonus in 2002 and 2003 as compared to 3.5% and 3.6% in 2004 and 2005
respectively.
Leave and working hours:
Leaves and working hours have not been so important causes of industrial disputes. During
2002, 0.5% of the disputes were because of leave and hours of work while this percentage
increased to 1% in 2003. During 2004, only 0.4% of the disputes were because of leaves and
working hours.
Miscellaneous:
The miscellaneous factors include
-
Inter/Intra Union Rivalry

Charter of Demands
Work Load
Standing orders/rules/service conditions/safety measures
Non-implementation of agreements and awards etc.
Classifications of Disputes:
1. Conflict of Interest:
These conflicts arise due to disagreements in level of income, fringe benefits, job security, and/or
other terms and conditions of employment. Dispute can be resolved on conciliation by
compromising.
2. Grievance or Rights Disputes:
Also known as conflict of rights disputes, they occur due to general disagreements like:
discipline, dismissal, payment of wages, overtime, time off entitlements, demotion, transfer, etc.
Dispute can be resolved in labor courts and tribunals.
3. Disputes involving unfair labor practices:
This type of dispute occurs when Trade union members face discrimination. Unfair labor
practices include: interference, restraint or coercion of employees, refusal to collective
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bargaining, recruitment of workmen during legal strikes, failure to implement awards, acts of
violence, etc.
Prevention of Industrial Disputes:

The consequences of an Industrial dispute will be harmful to the owners of industries, workers,
economy and the nation as a whole, which results in loss of productivity, profits, market share
and even closure of the plant. Hence, Industrial disputes need to be averted by all means.
Prevention of Industrial disputes is a pro-active approach in which an organization undertakes
various actions through which the occurrence of Industrial disputes is prevented. Like the old
saying goes, prevention is better than cure.
a. Joint Management Councils: Just to make a start in labour participation in

management, the govt: suggested in its Industrial Resolution 1956 to set up joint
management councils. It consists of equal numbers of workers and employers (minimum
6 & maximum 12) decisions of the JMC should be unanimous and should be
implemented without any delay. JMC members should be given proper training. JMC
should look after 3 main areas:1. information sharing
2. consultative
3. administrative
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Representation of workers to the JMCs should be based on the nomination by the representation.
Objectives
Satisfy the psychological needs of workers
Improve the welfare measures
Increase workers efficiency
Improve the relation and association between workers, managers and promoters.
JMC deals with matters like:
Employee welfare
Apprenticeship scheme
b. Works Committee: Every industrial undertaking employing 100 or more workers is

under an obligation to set up a works committee consisting equal number of
representatives of employer and employees. The main purpose of such committees is to
promote industrial relations. According to Indian Labour Conference work committees
are concerned with:
Administration of welfare & fine funds.
Educational and recreational activities.
Safety and accident prevention
Occupational diseases and protective equipment.
Conditions of work such as ventilation, lightening, temperature & sanitation including

latrines and urinals.
Amenities such as drinking water canteen, dining rooms, medical & health services.
The following items are excluded from the preview of the work committees.
Wages and allowances
Profit sharing and bonus
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Programs of planning and development
Retirement benefits
PF and gratuity
Housing and transport schemes
Incentive schemes
Retirement and layoff
c. Code of Industrial discipline: The code of Industrial discipline defines duties and
responsibilities of employers and workers. The objectives of the code are:
To secure settlement of disputes by negotiation, conciliation and voluntary arbitration.
To eliminate all forms of coercion, intimidation and violence.
To maintain discipline in the industry.
To avoid work stoppage.
To promote constructive co-operation between the parties concerned at all levels.
Procedures for settling labor dispute:

Collective Bargaining, Negotiation, Conciliation and Mediation, Arbitration and
Adjudication are well known methods for settlement of industrial disputes.
Collective Bargaining:Collective Bargaining is a technique by which dispute as to conditions of
employment, are resolved amicably, by agreement, rather than by coercion. The
dispute is settled peacefully and voluntarily, although reluctantly, between labour
and management in the context of present day egalitarian society, with its fast
changing social norms, a concept like collective bargaining is not a capable of a
precise definition. The content and Scope collective bargaining also varies from
country to country. Broadly Speaking Collective bargaining is a process of
bargaining between employers and workers, by which they settle their disputes
relating to employment or non-employment, terms of employment or conditions of
the labour of the workman, among themselves, on the strength of the sanctions
available to each side. Occasionally, such bargaining results in an amicable
settlement arrived at voluntarily and peacefully, between the parties. But quite
often, the workers and employers have to apply sanctions by resorting to weapons
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of strike and lockouts, to pressurize one another, which makes both the sides aware
of the strength of one another and that finally forces each of them to arrive at a
settlement in mutual interest. It is thus the respective strength of the parties which
determine the issue, rather than the wordy duals which are largely put on for show,
as an element of strength in one party is by the same token, an element of
weakness in another.
The final outcome of bargaining may also depend upon the art, skill and dexterity of
displaying the strength by the representatives of one party to the other.
Conciliation & Mediation:
Through conciliation and mediation a third party provides assistance with a view to
help the parties to reach an agreement. The conciliator brings the rival parties
together discuss with them their differences and assist them in finding out solution
to their problems. Mediator on the other hand is more actively involved while
assisting the parties to find an amicable settlement. Sometimes he submits his own
proposals for settlement of their disputes.
Arbitration:
The resort to arbitration procedure may be compulsory or arbitrary. Compulsory
arbitration is the submission of disputes to arbitration without consent or agreement
of the parties involved in the dispute and the award given by the arbitrator being
binding on the parties to the dispute. On the other hand in case of voluntary
arbitration, the dispute can be referred for arbitration only if the parties agree to the
same. Section 10 A of the Act, however, provides only for voluntary reference of
dispute to arbitration. This system, however, has not been widely practiced so far.
One of the main reasons for not gaining popularly of this procedure is lack of
arbitrators who are able to command respect and confidence of the parties to the
dispute. Inter Union rivalry also sometimes makes it difficult in arriving at an
agreement on settlement of an arbitrator who is acceptable to all the trade unions
in the industry.
Adjudication:
If despite efforts of the conciliation officer , no settlement is arrived at between
employer and the workman, The Industrial Dispute a provides for a three tier
system of adjudication viz. Labour Courts , Industrial Tribunals and National
Tribunals under section, 7 , 7A and under section 7B respectively. Labour Courts
have been empowered to decide disputes relating to matters specified in the
Second Schedule. These matters are concerned with the rights of workers, such as
propriety of legality of an order passed by an employer under the standing orders,
application and interpretation of standing orders, discharge or dismissal of workman
including reinstatement of grant of relief to workman wrongfully discharged or
dismissed, withdrawal of any customary concession or privilege and illegality or
otherwise of a strike or lockout.
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The industrial tribunal is empowered to adjudicate on matters specified in both the

Second and Third schedule i.e. both rights and interest disputes. The jurisdiction of
the Industrial Tribunal is wider that the labour courts.
UNIT 5 COLLECTIVE BARGAINING
CONCEPT
Collective bargaining is a source of solving the problems of employees in the work situation
collectively. It provides a good climate for discussing the problems of workers with their
employers. The employees put their demands before the employers and the employers also give
certain concession to them. Thus it ensures that the management cannot take unilateral decision
concerning the work ignoring the workers. It also helps the workers to achieve responsible
wages, working conditions, working hours, fringe benefits etc. It provides them a collective
strength to bargain with employer. It also provides the employers some control over the
employees.
The process of collective bargaining is bipartite in nature, i.e. the negotiations are between the
employers and employees without a third partys intervention. Thus collective bargaining serves
to bridge the emotional and physiological gulf between the workers and employers though direct
discussions.
The term collective bargaining is made up of two words, collective which means a group
action through representation and bargaining, means negotiating, which involves proposals
and counter-proposals, offers and counter-offers. Thus it means collective negotiations between
the employer and the employee, relating to their work situations. The success of these
negotiations depends upon mutual understanding and give and take principles between the
employers and employees.
Collective bargaining generally includes negotiations between the two parties (employees
representatives and employers representatives). Collective bargaining consists of
negotiations between an employer and a group of employees that determine the conditions of
employment. Often employees are represented in the bargaining by a union or other labor
organization. The result of collective bargaining procedure is called the collective bargaining
agreement (CBA). Collective agreements may be in the form of procedural agreements or
substantive agreements. Procedural agreements deal with the relationship between workers
and management and the procedures to be adopted for resolving individual or group
disputes.
This will normally include procedures in respect of individual grievances, disputes and
discipline. Frequently, procedural agreements are put into the company rule book which
provides information on the overall terms and conditions of employment and codes of behavior.
A substantive agreement deals with specific issues, such as basic pay, overtime premiums,
bonus arrangements, holiday entitlements, hours of work, etc. In many companies,
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agreements have a fixed time scale and a collective bargaining process will review the
procedural agreement when negotiations take place on pay and conditions of employment.
Salient Features of collective bargaining
It is a collective process in which representatives of employers and employees participate

mutually.
It is a flexible and dynamic process wherein no party adopts a rigid attitude.
It is a bipartite process whereas the representatives of workers and management get an

opportunity for clear and face to face negotiation.
It is a continuous process which can establish regular and stable relationship between
workers organization and management.
It is a practical way to establish an industrial democracy.
It is a good method of promoting industrial jurisprudence.
It is good form of interdisciplinary system (i.e. a function embodying economic

psychological, administrative, ethical and other aspects.)
It is a process that includes efforts from preliminary preparations to the presentation of

conflicting view points, collection of necessary facts, understanding of view points,
taking correct decisions etc.
It is a group process, wherein one group, representing the employers, and the other,
representing the employees, sit together to negotiate terms of employment.
Negotiations form an important aspect of the process of collective bargaining i.e., there is
considerable scope for discussion, compromise or mutual give and take in collective
bargaining.
Collective bargaining is a formalized process by which employers and independent trade
unions negotiate terms and conditions of employment and the ways in which certain
employment-related issues are to be regulated at national, organizational and workplace
levels.
Collective bargaining is a process in the sense that it consists of a number of steps. It

begins with the presentation of the charter of demands and ends with reaching an
agreement, which would serve as the basic law governing labor management relations
over a period of time in an enterprise. Moreover, it is flexible process and not fixed or
static. Mutual trust and understanding serve as the by products of harmonious
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relations between the two parties.
It a bipartite process. This means there are always two parties involved in the process
of collective bargaining. The negotiations generally take place between the employees
and the management. It is a form of participation.
Collective bargaining is a complementary process i.e. each party needs something that
the other party has; labor can increase productivity and management can pay better
for their efforts.
Collective bargaining tends to improve the relations between workers and the union on
the one hand and the employer on the other.
Collective Bargaining is continuous process. It enables industrial democracy to be

effective. It uses cooperation and consensus for settling disputes rather than conflict
and confrontation.
Collective bargaining takes into account day to day changes, policies, potentialities,
capacities and interests.
It is a political activity frequently undertaken by professional negotiators.
Principles of Collective Bargaining

The success of collective bargaining is based on certain principles. These principles are to be
followed by the employers and unions. Prof. Arnold. F. Campo has laid down certain principles
for union and management, for management and for union.
For both union and management

1. Collective bargaining process should give due consideration to hear the problems on both
sides. This will develop mutual understanding of a problem which is more important for
arriving at the solutions.
2. Both the management and union should analyze the alternatives to arrive at the best
solution.
3. There must be mutual respect on both the parties. The management should respect the
unions and the unions should recognize the importance of management.
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4. Both the union and management must have good faith and confidence in discussion and
arriving at a solution.
5. Collective bargaining required effective leadership on both sides, on the union side and
management side to moderate discussions and create confidence.
6. In collective bargaining both the union and management should observe the laws and
regulations in practice in arriving at a solution.
7. In all negotiations, the labour should be given due consideration in wage fixation, in
working conditions, bonus etc.
For management
1. Management should think of realistic principles and policies for labour regulations.
2. The recognitions of a trade union to represent the problems is more essential. If there are
more than one union, the management can recognize on which is having the support of
majority of workers.
3. Management should follow a policy of goodwill, and cooperation in collective bargaining
rather than an indifferent attitude towards the union.
4. Managements need not wait for trade union to represent their grievances for settlement.
Management can voluntarily take measures to settle the grievances.
5. Managements should give due consideration to social and economic conditions of
workers in collective bargaining.
For unions
1. Unions should avoid undemocratic practices.
2. Unions have to recognize their duties to the management also before emphasizing their
demands.
3. Unions have to consider the benefits to all workers rather than a section of workers.
4. Strike lock-outs should be resorted to, only as a last measure. As far as possible they have
to be avoided by compromise and discussion.
TYPES OF COLLECTIVE BARGAINING
Distributive bargaining:
It involves haggling over the distribution of surplus. Under it, the economic issues like wages,
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salaries and bonus are discussed. In distributive bargaining, one partys gain is another
partys loss. This is most commonly explained in terms of a pie. Disputants can work together
to make the pie bigger, so there is enough for both of them to have as much as they want, or
they can focus on cutting the pie up, trying to get as much as they can for themselves. In
general, distributive bargaining tends to be more competitive. This type of bargaining is also
known as conjunctive bargaining.
Integrative bargaining:
This involves negotiation of an issue on which both the parties may gain, or at least neither
party loses. For example, representatives of employer and employee sides may bargain over
the better training program or a better job evaluation method. Here, both the parties are trying
to make more of something. In general, it tends to be more cooperative than distributive
bargaining. This type of bargaining is also known as cooperative bargaining.
Attitudinal restructuring:
This involves shaping and reshaping some attitudes like trust or distrust, friendliness or
hostility between labor and management. When there is a backlog of bitterness between both
the parties, attitudinal restructuring is required to maintain smooth and harmonious industrial
relations. It develops a bargaining environment and creates trust and cooperation among the
parties.
Intra-organizational bargaining:
It generally aims at resolving internal conflicts. This is a type of maneuvering to achieve
consensus with the workers and management. Even within the union, there may be differences
between groups. For example, skilled workers may feel that they are neglected or women
workers may feel that their interests are not looked after properly. Within the management
also, there may be differences. Trade unions maneuver to achieve consensus among the
conflicting groups.
PLUS
Forms of Collective Bargaining

The forms of collective bargaining differ from country to country and time to time in India.
Collective bargaining takes the following forms:
1. Settlements under industrial disputes act: According to this, negotiations are carried out
by officers according to the Industrial Disputes Act.
2. Settlements by parties: In this case settlements are arrived at by parties themselves
without the interference of a third party.
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3. Consent awards: Here the agreements are negotiated by the parties on a voluntary basis
when disputes are subjudiced. Later these are submitted to the labour courts.
4. Direct negotiation: In this agreements are arrived at by both the parties after direct
negation. The enforcement of these agreements depends upon the goodwill and
cooperation of the parties.
Process of Collective Bargaining

The process of collective bargaining consists of two stages, (i) the negotiation state, and (ii) the
contract administration.
Negotiation Stage
At the negotiation stage certain proposals are put forward for mutual agreement after careful
consideration. The negotiation stage consists of three steps.
Preparation for negotiation
Negotiation procedure
Follow up action
Preparation for negotiation

First the union will submit their fresh contract to the management before the expiry of existing
contract (usually 30 to 60 days before the expiry). Both the management and unions will take
considerable time to the preparation and negotiation.
They collect the required data relating to large number of issues such as wage, salary, seniority,
overtime allowance, the cost of living, the policies of trade unions and management, nature of
agreement in other companies etc.
The company will collect such information its internal sources such as balance sheet, contract
agreements, market research reports, Govt. reports etc. The trade union also collects such data
from their own central organization, research staff from various Department etc.
The personal department prepares a personal, which includes
Specific proposals of the company including the objectives of negotiation.
Estimating the cost of implementing the proposals.
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Classifying the demands as demands acceptable before negotiation, demands acceptable

after negotiation, demands which cannot be accepted. Such proposals are based on
companys commitment to shareholders, consumers, workers and public.
Negotiation technique or procedure

In this step, a negotiation committee is to be formed by both the parties. From the management
side the representative include the chief executives. The unions is represented by the leaders and
centrals leaders. The committee consists of three to six members.
The demands are classified as demands which need bargaining and demands which may be
rejected. During negotiations, normally the easier demands are taken up first. Both parties should
have a bargaining cushion, and make counter proposals. For example, a demand for wage
increase by the union may be accompanied by a counter proposal for increase in production by
the management. Such negotiations go on till the point of no return is being reached. A rigid or
irrevocable stance should always be avoided.
Follow-up action
At this stage, the agreement is printed and circulated among all the employees. The supervisors
will be enlightened about the agreements for their effective implementation.
Contract Administration
Agreement will be useful if they are executed properly. As observed by Profs. Illiamson and
Harries, if anything is more important to industrial relations than the contract itself, it is the
administration of the contract.
Prof. Campo has laid down the following general principles for administering the contact
effectively;
Cooperation between both the parties is essential. Both the parties should have a tolerant
attitude towards each other and have a spirit of accommodation and goodwill.
Proper procedure should be adopted for the redressal of grievances by providing

opportunity to exchange views.
When a conference over the redressal of grievance reaches an impasse, the grievance
should be referred to arbitration.
Both the parties should honor the commitment

PLUS
The collective bargaining process comprises of five core steps:
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1.
Prepare: This phase involves composition of a negotiation team. The negotiation team should
consist of representatives of both the parties with adequate knowledge and skills for
negotiation. In this phase both the employers representatives and the union examine their
own situation in order to develop the issues that they believe will be most important. The first
thing to be done is to determine whether there is actually any reason to negotiate at all. A
correct understanding of the main issues to be covered and intimate knowledge of operations,
working conditions, production norms and other relevant conditions is required.
2.
Discuss: Here, the parties decide the ground rules that will guide the negotiations. A process
well begun is half done and this is no less true in case of collective bargaining. An environment
of mutual trust and understanding is also created so that the collective bargaining agreement
would be reached.
3.
Propose: This phase involves the initial opening statements and the possible options that
exist to resolve them. In a word, this phase could be described as brainstorming. The
exchange of messages takes place and opinion of both the parties is sought.
4.
Bargain: negotiations are easy if a problem solving attitude is adopted. This stage comprises
the time when what ifs and supposals are set forth and the drafting of agreements take
place.
5.
Settlement: Once the parties are through with the bargaining process, a consensual
agreement is reached upon wherein both the parties agree to a common decision regarding
the problem or the issue. This stage is described as consisting of effective joint
implementation of the agreement through shared visions, strategic planning and negotiated
change.
COLLECTIVE BARGAINING IN NEPAL

Provisions of the labour laws
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The Labour Act 1992 made a number of provisions in order to systematize the
procedure of collective bargaining. As per this act, authentic trade unions can
directly present the charter of demands or that can be done by the signature of the
majority of the workers working in the enterprise. Authentic trade unions, that is,
the collective bargaining agents in accordance with our Trade Union Act 1992, are
to be elected at an interval of every two years by the majority of the workers in an
enterprise. There may be 4 unions, to the maximum, at a time in an enterprise.
Twenty five percent of the total workers can register enterprise level union.
When CBA tables the charter of demands, the management should invite them for
talks. The resultant negotiation or agreement will be valid for two years. But if,
within 21 days, table-talks could not be arranged or the talks failed to reach an
agreement, the case should go to the labour office. Even when the case is in the
labour office, the two partners--labour and managementcan try a negotiated
solution which the government should recognize unconditionally. On the other
hand, when the case enters labour office and the tripartite talks fail to yield any
results, workers are free to give an ultimatum of strike through a secret ballot
decision of 60 percent of the workers. During lockout and strike also bipartite
negotiations are possible. The labour administration of the government is, by law,
obliged to recognize and accept the agreement unconditionally.
Practices
Modern industrial activities had started in Nepal just after the great depression of
1929. Prior to the world war second, a number of industries had come into
existence. But collective bargaining practices started only from 1947, when
workers started to unionize themselves and, in the effort, the historical first strike
appeared in our industrial scenario. The laws to regulate labour and trade union
aspects were non-existent at that time. Up to 1959, collective bargaining practices
were not within the legal framework and were conducted under the pressure of
practical difficulties. In 1959, The Factory and Factory Workers Act came into
existence and efforts to develop a system were initiated. However, the democratic
multiparty system was put to an end in 1960 and, with the ban on political parties;
even the trade unions were banned. The following three decades saw scattered
union activities carried out underground. In 1989, GEFONT was established as the
national confederation of trade unions with its underground operation. In 1990,
workers took part in the democracy movement against autocratic and dictatorial
system. Following the restoration of democracy, the labour sector got the Labour
Act 1992 and the Trade Union Act 1992. These labour laws started to systematize
collective bargaining and establish an environment where a sound industrial
relation could exist in the country.
The present collective bargaining practices are strictly limited to the enterprise
level. Industry level bargaining systems are not developed within our legal
framework. Therefore, in collective bargaining procedures, enterprise level unions
do have the role, whereas their national federations do not have it.
Secondly, the formal sector is very small in our country. A vast majority of workers
is in informal sectors, mainly in the agricultural sector. The workforce engaged in
formal sectors is between 7 and 10 percent of the total workforce. Only 21 percent
of the workforce is in wage employment and the rest 79 percent is self-employed.
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The present coverage of the labour laws is very limited in extent. Hence, the
collective bargaining procedures and practices also cover a small portion of the
workforce making it common to hold individual bargaining outside legal scrutiny.
Thirdly, with the entrenchment of globalization and new liberalisation policies, a
process of the informalisation of the formal sector is taking place in Nepal. Subcontraction of work by big enterprises outside their boundary is being evident.
Similarly the sub-contracting of labour has increased. So is the scenario of the
number of home-based workers. The masses are being thrown outside the social
security network. This tendency is clearly visible in the carpet industry. Therefore,
the establishment of the industry level bargaining system involving the concerned
national federations has become an urgent need today.
UNIT 6 WORKERS PARTICIPATION IN MANAGEMENT
CONCEPT
Workers participation in management is an essential ingredient of Industrial democracy. The

concept of workers participation in management is based on Human Relations approach to
Management which brought about a new set of values to labour and management. Traditionally
the concept of Workers Participation in Management (WPM) refers to participation of nonmanagerial employees in the decision-making process of the organization. Workers participation
is also known as labour participation or employee participation in management. In Germany it
is known as co-determination while in Yugoslavia it is known as self-management. The
International Labour Organization has been encouraging member nations to promote the scheme
of Workers Participation in Management.
Workers participation in management implies mental and emotional involvement of workers in
the management of Enterprise. It is considered as a mechanism where workers have a say in the
decision-making.
Definition:
According to Keith Davis, Participation refers to the mental and emotional involvement
of a person in a group situation which encourages him to contribute to group goals and
share the responsibility of achievement.
According to Walpole, Participation in Management gives the worker a sense of

importance, pride and accomplishment; it gives him the freedom of opportunity for selfexpression; a feeling of belongingness with the place of work and a sense of
workmanship and creativity.
The concept of workers participation in management encompasses the following:
It provides scope for employees in decision-making of the organization.
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The participation may be at the shop level, departmental level or at the top level.
The participation includes the willingness to share the responsibility of the organization
by the workers.
Objectives of Workers Participation in Management

To establish Industrial Democracy.
To build the most dynamic Human Resources.
To satisfy the workers social and esteem needs.
To strengthen labour-management co-operation and thus maintain Industrial peace and harmony.
To promote increased productivity for the advantage of the organization, workers and the
society at large.
Its psychological objective is to secure full recognition of the workers.
Importance of Workers Participation in Management
Unique motivational power and a great psychological value.
Peace and harmony between workers and management.
Workers get to see how their actions would contribute to the overall growth of the
company.
They tend to view the decisions as `their own and are more enthusiastic in their
implementation.
Participation makes them more responsible.
They become more willing to take initiative and come out with cost-saving suggestions
and growth-oriented ideas.
FORMS OF PARTICIPATION
There can be 5 levels of Management Participation or WPM:
Information participation: It ensures that employees are able to receive information and
express their views pertaining to the matter of general economic importance.
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Consultative importance: Here workers are consulted on the matters of employee

welfare such as work, safety and health. However, final decision always rests with the
top-level management, as employees views are only advisory in nature.
Associative participation: It is an extension of consultative participation as management

here is under the moral obligation to accept and implement the unanimous decisions of
the employees. Under this method the managers and workers jointly take decisions.
Administrative participation: It ensures greater share of workers participation in

discharge of managerial functions. Here, decisions already taken by the management
come to employees, preferably with alternatives for administration and employees have
to select the best from those for implementation.
Decisive participation: Highest level of participation where decisions are jointly taken
on the matters relating to production, welfare etc.
WORKERS PARTICIPATION IN MANAGEMENT IN CASE OF NEPAL

Workers' participation in management
Two aspects of an enterprise are ownership and control. Control refers to
management. Ownership and control used to be inseparable in early days. Today,
they have come into two distinct areas. Shareholders of a company these days are
just the owners and do not exercise or have no control over the processes of
management or decisions of the company. A distinct class has evolved which
controls and manages, although the managers concentrate themselves on the
interest of the ownership. In these circumstances, the question is whether the
labourers can become owners or not, whether they should participate in
management and control or decision making processes.
There is a concept of the 'employee stock ownership plan' propounded by Louis
Kelso who is of the opinion that workers are natural shareholders, not natural
managers. This plan of collective ownership of workers' trust by purchasing the
shares of the enterprise through loans from banks and financial institutions has
gained popularity in USA. Under this ESOP, workers do not have any role in
management or in the system of control. On the contrary successful workers'
cooperatives in many countries have also proved that workers can play active role
in management as well as ownership.
The thought that participation of workers in management is inevitable in the
process of decision making for the smooth functioning of industrial democracy has
gained much strength because of the realization that labour is not only the factor
of production but also a sensitive human element. In our context, we feel that the
demand for participation in management should be raised in order to bring about
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transparency in managerial activities, and to strengthen the psychology of

labourers as labour-investors of an equal status. Participation will produce positive
results in connection with productivity and distribution of bonus. To sum up, the
issue of workers' participation in management has to be raised in resemblance to
the promotion of industrial democracy.
UNIT 7 INTERNATIONAL LABOUR ORGANIZATION-ILO AND NEPAL
INTRODUCTION TO ILO
ORIGIN
The ILO was created in 1919, as part of the Treaty of Versailles that ended World
War I, to reflect the belief that universal and lasting peace can be accomplished
only if it is based on social justice.
The Constitution was drafted between January and April, 1919, by the Labour
Commission set up by the Peace Conference, which first met in Paris and then in
Versailles. The Commission, chaired by Samuel Gompers, head of the American
Federation of Labour (AFL) in the United States, was composed of representatives
from nine countries: Belgium, Cuba, Czechoslovakia, France, Italy, Japan, Poland,
the United Kingdom and the United States. It resulted in a tripartite organization,
the only one of its kind bringing together representatives of governments,
employers and workers in its executive bodies.
The Constitution contained ideas tested within the International Association for
Labour Legislation, founded in Basel in 1901. Advocacy for an international
organization dealing with labour issues began in the nineteenth century, led by two
industrialists, Robert Owen (1771-1853) of Wales and Daniel Legrand (1783-1859)
of France.
The driving forces for ILO's creation arose from security, humanitarian, political and
economic considerations. Summarizing them, the ILO Constitution's Preamble says
the High Contracting Parties were 'moved by sentiments of justice and humanity as
well as by the desire to secure the permanent peace of the world...'
There was keen appreciation of the importance of social justice in securing peace,
against a background of exploitation of workers in the industrializing nations of that
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time.
There
was
also
increasing
understanding
of
the
world's
economic
interdependence and the need for cooperation to obtain similarity of working

conditions in countries competing for markets. Reflecting these ideas, the Preamble
states:
1.
Whereas universal and lasting peace can be established only if it is based

upon social justice;
2.
And whereas conditions of labour exist involving such injustice hardship and
privation to large numbers of people as to produce unrest so great that the
peace and harmony of the world are imperilled; and an improvement of those
conditions is urgently required;
3.
Whereas also the failure of any nation to adopt humane conditions of labour
is an obstacle in the way of other nations which desire to improve the
conditions in their own countries.
The areas of improvement listed in the Preamble remain relevant today, for
example:
1.
Regulation of the hours of work including the establishment of a maximum

working day and week;
2.
Regulation of labour supply, prevention of unemployment and provision of an

adequate living wage;
3.
Protection of the worker against sickness, disease and injury arising out of his
employment;
4.
5.
Protection of children, young persons and women;

Provision for old age and injury, protection of the interests of workers when
employed in countries other than their own;
6.
Recognition of the principle of equal remuneration for work of equal value;
7.
Recognition of the principle of freedom of association;
8.
Organization of vocational and technical education, and other measures.
OBJECTIVES OF ILO
The International Labour Organization (ILO) is devoted to promoting social justice
and internationally recognized human and labour rights, pursuing its founding
mission that labour peace is essential to prosperity. Today, the ILO helps advance
the creation of decent work and the economic and working conditions that give
working people and business people a stake in lasting peace, prosperity and
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progress. Its tripartite structure provides a unique platform for promoting decent
work for all women and men. Its main aims are to promote rights at work,
encourage decent employment opportunities, enhance social protection and
strengthen dialogue on work-related issues.
The ILO has four strategic objectives
Promote and realize standards and fundamental principles and

rights at work
Create greater opportunities
employment and income
for
women
and
men
to
decent
Enhance the coverage and effectiveness of social protection for all

Strengthen tripartism and social dialogue
In support of its goals, the ILO offers unmatched expertise and knowledge about the
world of work, acquired over more than 90 years of responding to the needs of
people everywhere for decent work, livelihoods and dignity. It serves its tripartite
constituents - and society as a whole - in a variety of ways, including:
Formulation of international policies and programs to promote basic human rights,
improve working and living conditions, and enhance employment opportunities
Creation of international labour standards backed by a unique system to supervise
their application
An extensive program of international technical cooperation formulated and
implemented in an active partnership with constituents, to help countries put these
policies into practice in an effective manner
Training, education and research activities to help advance all of these efforts
STRUCTURE OF ILO
The structure of the ILO and its underlying documents

The distinctive feature of the ILO - tripartism, its tripartite structure, within which
negotiations between governments, workers and entrepreneurs. Delegates of these
three groups are represented, and confer on an equal footing at all levels of the
organization.
The supreme body of the ILO is the International Labor Conference, which adopted
all the ILO. Delegates of the International Conference are the two representatives
from the government and one, respectively, from the most representative
organizations of workers and employers each State Party. The ILO Governing Body,
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are also organized on a tripartite basis, is the executive body of the ILO.
International Labor Office serves as the secretariat of the ILO. ILO adopts
Convention and Recommendation on labor issues. In addition to conventions and
recommendations were adopted three declarations: The Philadelphia Declaration of
1944 on the ILO's goals and objectives of the ILO (now included in the ILO
Constitution), the 1977 ILO Declaration on Multinational Enterprises and Social
Policy, as well as the 1998 ILO Declaration on Fundamental Rights and Principles at
Work. Convention subject to ratification by participating countries and an
international treaty, binding for execution in the event of ratification. The
recommendations are not legally binding acts. Even if the State has not ratified a
particular convention, it is bound by virtue of membership in the ILO and its
adherence to the ordinance on the four fundamental principles at work enshrined in
the ILO Declaration of 1998. These principles of freedom of association and
collective bargaining, prohibition of discrimination in employment, the eradication of
forced labor, and prohibition of child labor. These four principles are devoted to the
eight ILO Conventions (respectively - Convention number 87 and 98, 100 and 111,
29 and 105, 138 and 182) are called fundamental. The said Convention, ratified by
an overwhelming majority of the world and for their enforcement of ILO monitors
especially closely.
Text of ILO conventions and recommendations in English, Russian, French, Spanish,
Chinese, German, Portuguese, Arabic, collected in a database of international labor
standards of the ILO.
The ILO cannot be forced to perform even ratified Conventions. Nevertheless, there
are controls over the implementation of ILO Conventions and Recommendations, the
main essence of which is to study the circumstances of the alleged violations of
labor rights and to give them international exposure in the case of ignoring the
long-term observations of the ILO State party. This control is exercised by the ILO
Committee of Experts on the Application of Conventions and Recommendations, the
Committee of the Governing Council on Freedom of Association and the Conference
Committee on the Application of Conventions and Recommendations.
In exceptional cases, in accordance with Article 33 of the ILO, the International
Labor Conference may encourage their members to implement the impact on the
state, especially maliciously violating international labor standards. In practice, this
was done only once - in 2001 against Myanmar for decades been subjected to
krititke for the use of forced labor and refused to cooperate on this issue with the
ILO. As a result, several states have applied to economic sanctions against
Myanmar, and she was forced to make some steps towards the ILO.
ROLE OF ILO IN NEPALESE LABOR DEVELOPMENT ACTIVITIES
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One of the most significant contributions of the ILO Office in Nepal from the
beginning was in the sphere of employment generation through labour-based
activities
The programme portfolios have expanded considerably since 1966, particularly
after the establishment of the tripartite structure in the country during the 1990s.
Since then the ILO Office in Nepal has made considerable efforts in promoting
labour standards and capacity building of its social partners
Promotion of decent and productive employment opportunities for Nepalese men
and women is always the primary goal of ILOs country programme for Nepal.
Child labour
Employment promotion
Equality and discrimination
Labour market governance and working conditions
Labour migration
Informal economy
International Labour Standards
Safety and health at work
Skills and employability
Social security
Workers and Employers organizations
NEPALS RATIFICATION ON THE CONVENTIONS OF ILO

The
Bureau
for
Workers
Activities
(ILO-ACTRAV),
in
cooperation
with
the
International Trade Union Confederation-Asia Pacific (ITUC-AP) and the trade union
organizations of Nepal, is running a campaign for the ratification and application of
ILO Conventions Nos.87 and 98 in a number of countries in the Asia-Pacific region.
The set of conclusions and recommendations adopted at the national conference by
around 90 participants from the major national trade union centers demanding
immediate action on the ratification of ILO Convention 87 was presented to the
Prime Minister, Speaker of the Parliament and relevant authorities.
ILO/ ACTRAV/ITUC AP/Trade Unions in Nepal National Trade Union

Conference on Ratification and Implementation of ILO Core Labour
Standards 15-16 August 2011, Kathmandu, Nepal
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CONCLUSIONS AND RECOMMENDATIONS
Accepting the right to organize is a fundamental right of workers, the government of

Nepal has been declaring its intention to ratify ILO Convention 87 for the past 10
years. However, for one reason or the other, there has been a delay in the process
of ratification.
Several discussions within the social partners and tripartite discussions have also
been held to promote the principles contained in ILO Convention 87 and subsequent
awareness raising campaigns to promote the ratification of C87.
While appreciating that 7 out of the 8 core labour standards have been ratified,
major trade union confederations in Nepal have been pressing for the ratification of
Convention 87 for several years. The unions have also been conducting awarenessraising campaigns to generate support for the ratification of C87.
The Federation of Nepal Chamber of Commerce and Industry, the main employers
organization in the country has also expressed its support for the ratification of the
Convention.
Considering the positive steps and positions taken by the ILO tripartite partners,
there is no serious obstacle to the ratification of the Convention.
However, there remain a few misconceptions within the top bureaucracy and policy
makers creating delays in the ratification process. Based on the discussions held,
main misconceptions are the following:
Ratification of the C.87 will adversely affect police and armed force and we
need to permit right of unionize to them
As. C.98 is already ratified; there is no need to ratify c. 87.
Rights granted by. C 87 is being exercised by the workers in practice. So,

there is no need to ratify it
High level officials may also ask for right to organize is a fear in government
bureaucracy
Government cannot restrict in the right to strike in the government service

and even in the essential service
In addition, the uncertainty in the overall political situation in the country adds to
the serious delay in the ratification process.
samraktnpdh@yahoo.c
Trade unions deplore the delay in ratification of C87 and believe that the following
reasons reinforce the need to ratify C87:
1. Nepal has already ratified ILO convention C98. This convention guarantees the
workers' rights to organize and collective bargaining. Nepal has also ratified
Covenant 1966 on Civil and Political Rights. Nepal has also ratified Covenant 1966
on Economic, Social and Cultural Rights. Article 22 of Covenant on Civil and Political
Rights, and Article 8 on Covenant on Economic, Social and Cultural Rights
guarantee all workers the rights to form and trade unions. Such guarantee is also
affirmed by Article 23 of Universal Declaration on Human Rights, to which Nepal is a
party.
2. Right to organize is important for implementation of international standard on
Decent Work. ILO's eight conventions are deemed as basics for decent work. These
eight conventions include, C29 and C105 relating to Bonded Labour, C138 and C182
relating to abolition of child labour, C100 and C111 relating to equality and abolition
of discrimination, and C87 and C98 on rights to organize. Nepal has ratified all but
C87. Its ratification will complete Nepal's commitment to Decent Work.
3. Reinstated Parliament of Nepal has adopted the Resolution on Public Interest
relating to rights to organize on 11 May 2006 where ratification of C87 is a
prerequisite to implement that resolution.
4. C87 leaves the matter of rights to organize among army and police to the
Domestic laws of the countries concerned. Hence, ratification of C87 is not
necessarily binding to grant organization rights to the army and police; rather it will
be as per the law of the country concerned. Rights to organize among civil servants
has already been recognized and accepted by Civil Servant Act of Nepal. Thus C87
just reinforces the provision of prevailing Act among the civil servants.
5. All other workers are guaranteed rights to organize by the existing Act relating to
trade unions and the subsequent by-laws. In relation to the workers engaged in
Essential Services, the draft Labour Law which is under discussion with the
stakeholders has already incorporated the provision in line with C87 and the
principle lay down by the CFA of ILO. Hence, ratification of C87 has no implication to
general workers' right to organize.
samraktnpdh@yahoo.c
6. The employers have rights to organize under the Registration of Establishment

Act 2034, and there is no bar to form the organization at any level.
7. Domestic constitutional and legal provisions guaranteeing the rights to organize
can be vulnerable to the changes in the government and political system. An
autocratic government can squash the domestic provisions and squeeze the rights
to organize. Ratification of C87 minimizes this vulnerability binding the countries to
honor international commitments.
8. In Nepal, the law of land (the Constitution, Acts, by-laws) already provides rights
to organize to major sectors of workers. Indeed, most of the requirements of C87
are already met. Thus its ratification will not add to the burden of the State. Rather,
ratification of C87 will reconfirm the commitment to democratic polity and
strengthen the domestic provisions that in the past have granted trade union rights
to the workers and civil servants.
After in-depth discussions and deliberations at the National Trade Union Conference
on Ratification and Implementation of ILO Core Labour Standards in Nepal, trade
union participants remain committed to work jointly and collectively to address the
concerns raised by the Government and ratification campaign should be intensified.
Noting that the process has taken 10 years, trade unions demand that Government
take immediate steps to ratify ILO Convention 87.
Further, the following courses of action will be undertaken, jointly and

collectively:
Efforts will be carried out to clarify all misconception in the policy makers
and among the stake holders.
Efforts need to be accelerated to improve and ensure compliance with the

Core Conventions, both under the law and in practice;
To speed up the resolving the labour dispute, we will jointly campaign to

establish the National Labour Commission based on decision taken by
Central Labour Advisory Committee (CLAC) in 2007.
Workers in the informal economy including self employed person need to be

integrated in the trade union structure and organizing campaigns;
Action on the labour market reform package in Nepal should be stepped up.
samraktnpdh@yahoo.c
The collective bargaining framework, including sectoral bargaining, in Nepal

needs to improved;
Trade union competencies need to be enhanced to engage meaningfully in

collective bargaining.
Capacity building, especially intended for trade unions, to enhance labour

administration, including credible labour inspection systems should be
carried out.
COMPILED AND EDITED BY

SAMRAKT DHAKAL
KANTIPUR CITY COLLEGE
BBA 6TH SEMESTER
samraktnpdh@yahoo.com
samraktnpdh@facebook.com
http://www.facebook.com/samraktnpdh
9841079561

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samraktnpdh@yahoo.

dispute settlement), and the management of conflict between employers,

To establish and promote the growth of an industrial democracy based

Uninterrupted production The most important benefit of industrial

Reduction in Industrial Disputes Good industrial relations reduce the

The implications of this approach include:

Independent external arbitrators should be used to assist in the resolution of

TRADE UNION ACT

In order to register an Enterprise Level Trade Union constituted pursuant to Sub-section(1) an

4. Registration of Trade Union Association:

5. Registration of the Trade Union Federation:

6. Additional Particular may be demanded:

if necessary particulars are not attached with the application.

7 (A)* Renewal of Trade Union:

The Trade Union may sue or be sued under it s name as person.

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.

To conduct activities providing education to the worker.

9(A)* Rights, duties and functions of Trade Union:

To follow necessary measures to resolve labour disputes by representing the workers in

Name and address of Trade Union;

Objective of the establishment of Trade Union;

Provision regarding fund of the Trade Union and its auditing;

Provision to bring the vote of no confidence against the officials;

The procedure of amendment of the Constitution of Trade Union;

Provision regarding dissolution of the Trade Union;

13. Duration of Validity of the Recognition of the Authorized Trade Union:

Notwithstanding anything contained in Sub-section (1) His Majestys Government may, by

15. Functions, Duties and Power of the Registrar:

To register the Trade Union.

To specify the procedure of election of the Authorized Trade Union.

16. Register Book:

The amount obtained from the membership fee.

The amount obtained from any other sources.

20. Information of the change in name:

22.# Obligation to be fulfilled regarding contracts:

23. No Case to be filed:

25. Cancellation of the Registration:

26. Officials of Trade Union Association and Federation:

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

28. Offence & Punishment:

30. Special Power of His Majestys Government:

# Changes made by the First Amendment.

x Excluded by the First Amendment.

LABOUR ADMINISTRATION NEPAL

Law that covers organization and functional composition

Programming and communication

Human Resources and career development

Visits and functions

Role of preventive measures

Registries and reporting of accidents/diseases at work

Sanctions and administrative processes

Social partners and labour inspection

ILO Conventions ratified

UNIT 3 TRADE UNIONISM

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

The economic security of employees is determined not only by the level