Labour Law in Nepal

December 22, 2010

Labour Law in Nepal

1: WEBTEXT/30019/64854/E92NPL01.htm

NEPAL

Labour Act, 1992. Dated 15 May 1992.
(Nepal Recorder, 12 June 1992, Vol. 16, No. 19, pp. 220253.)

Chapter 1. Preliminary

Section 1. Short title and commencement.

(1) This Act shall be known as the Labour Act, 1992.
(2) It shall come into force immediately.

Section 2. Definitions. Unless the subject matter or context indicates a different meaning, in this Act:

(a) "Production process" means any of the following processes:

(i) making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing or otherwise treating any material or substance with a view to its use, sale and distribution, transportation, or disposal in any other way;
(ii) pumping of oil, water, or sewage;
(iii) generating, transforming, and transmitting power; or
(iv) printing, lithography, photography, binding and other similar work.

(b) "Establishment" means any factory, organisation, institution or firm, or group thereof, established under current law with the objective of operating any industry, enterprise or service, and employing ten or more workers or employees. The term includes:

(i) tea estates, established according to law with commercial objectives;
(ii) establishments in industrial districts established by His Majesty's Government which employ not more than ten workers or employees.

(c) "Employees" means persons engaged in the administrative functions of the establishment.
(d) "Workers" means persons employed in return for payment of salary or wage in any production process or in the work of providing services, for building work, working on land or with machinery, or any part thereof used for the purpose, or any work related or incidental thereto. The term includes workers who work on a piecerate contract or agreement basis.
(e) "Manager (Prabhandhak) " means a person appointed to conduct the business of the establishment.
(f) "General manager (Vvabastkapak) " means a person who takes the final decision on matters concerning the activities of the establishment. The term includes any person who has been appointed as the head of any part or unit of an establishment with authority to exercise final power or responsibility.
(g) "Factory Inspector" means a factory inspector appointed by His Majesty's Government under this Act; the term includes the Senior Factory Inspector.
(h) "Child" means a person who is below the age of 14 years.
(i) "Minor" means a person who is between 14 and 18 years of age.
(j) "Adult" means a person who is above the age of 18 years.
(k) "Power" means electrical or mechanical energy. Provided that the term does not include energy generated by means of humans or animals.
(l) "Seasonal establishments" means those establishments which do not or cannot operate except during fixed seasons. The term includes seasonal establishments which cannot operate for more than 180 days in the year.
(m) "Day" means a period of 24 hours beginning at midnight.
(n) "Week" means a period of seven days beginning at midnight on Saturday or any other day prescribed by the Labour Department.
(o) "Welfare Officer" means a Welfare Officer appointed under this Act.
(p) "Labour Officer" means a Labour Officer appointed under this Act; the term includes the Senior Labour Officer.
(q) "Labour Court" means the Labour Court established under this Act.
(r) "Remuneration" means salaries or wages received in cash or in kind by workers or employees from an establishment in consideration for their work in the establishment. The term includes payments made in cash or in kind for piecerate or contract work. Provided that the term should not include allowances or facilities of any kind.
(s) "Prescribed" or "as prescribed" means prescribed or in the manner prescribed in the rules framed under this Act.

Chapter 2. Employment and job security

Section 3. Classification of posts. (1) The general manager shall classify the posts of the workers and employees of the establishment according to the nature of the production process, service or work of the establishment, and notify the Labour Office accordingly.
(2) If it becomes necessary to make any amendment in the classification of posts made under subsection (1), the Labour Office may direct the general manager to do so by explicitly mentioning the reasons. It shall be the duty of the general manager to comply with such directives.
Section 4. Employment of workers and employees. (1) When appointing any worker or employee to any post classified under section 3, the general manager shall issue a letter of appointment. Priority shall be given to Nepali nationals when making such appointments.
(2) Workers and employees employed under subsection (1) shall be granted a permanent appointment after they complete one year of uninterrupted service on the basis of their performance, honesty, discipline, dedication to work, attendance, etc. When making such appointments, letters of appointment shall be issued explicitly mentioning the post, remuneration, and service conditions of the concerned worker or employee, and the Labour Office shall be notified accordingly.
(3) Workers or employees engaged in any piecerate or contract work of a permanent nature in any enterprise shall also be made permanent under subsection (2).
(4) Workers or employees engaged in any work as mentioned in subsection (3) shall be paid benefits provided for in this Act according to their post and scale.
(5) Notwithstanding anything contained under subsections (2) and (3), in the event that any establishment is required to increase production or service for a short period of time, it may appoint workers or employees according to need for a certain period by specifying such a period.

Section 5. Employment. (1) No child shall be employed in any establishment.
(2) Except in prescribed circumstances, minors and women may ordinarily be employed for the period from 6 a.m to 6 p.m.
(3) Women may be employed like men after making appropriate arrangements on the basis of mutual agreements between the general manager and the employees or workers in question.

Section 6. Calculation of service period. The following period shall also be taken into account for the purpose of calculating the service period of any worker or employee in an establishment:

(a)period during which a worker or employee is kept in reserve under section 11 ;
(b)period during which a worker or employee remains on paid leave.

Section 7. Appointment on contract basis. In the event that it becomes necessary to appoint any person for a certain period of time for any specified work in view of the nature of the work for the establishment, such person may be appointed on a contract basis if his remuneration, service period and conditions of service are explicitly mentioned in the contract.
Section 8. Change in ownership not to have any negative impact. Any change in the ownership of an establishment shall not have a negative impact on the service and conditions of workers and employees working in the establishment.
Section 9. Separate registers of workers and employees to be maintained. (1) The general manager of each establishment shall maintain separate registers of each of its workers and employees indicating the following particulars:

(a)name of worker or employee;
(b)nature of his work;
(c) remuneration and mode of payment; and
(d)other prescribed particulars.

(2) The registers maintained under subsection (1) shall be produced at the request of the Labour Officer or Factory Inspector, or any other person designed by the Labour Office.
Section 10. Job security. The service of a permanent worker or employee of any establishment shall not be terminated unless the formalities prescribed under this Act or the rules or bylaws established under this Act are fulfilled.
Section 11. Power to maintain reserve. (1) In the event that it becomes necessary to curtail production or services of an establishment for some time, or in the event that it is not possible to continue operating an establishment because of special circumstances, the general manager may curtail production or services, or close down the entire establishment or part of it, subject to subsection (2).
(2) If it becomes necessary to curtail production or services, or to close down the entire establishment or a part of it under subsection (1), the permission of the Labour Office shall be obtained if the period of such curtailment or closure is 15 days or less, and of the Labour Department if the period exceeds 15 days. The Labour Office shall inform the Department if it grants any such permission.
(3) When production or services are curtailed under subsection (1), all workers working in shifts or on a wage basis, or all workers or employees who have completed one year of uninterrupted service after being registered in the attendance register of the establishment, shall be maintained on reserve with half the salary they had been normally receiving. Provided that all such workers or employees shall continue to be entitled to all appropriate benefits which they have been receiving.
(4) The general manager may not provide remuneration and benefits to workers or employees maintained on reserve under subsection (3) if they refuse to do any similar work offered by him with similar remuneration in the same establishment or in any other establishment under his control, or if they fail to present themselves at the establishment once every day during working hours, or in other prescribed circumstances.

Section 12. Retrenchment and reemployment. (1) If it becomes necessary to curtail production or services of an establishment, or to close down the entire establishment or a part thereof for more than three months because of exceptional circumstances, the general manager may lay off all or part of its employees after obtaining the permission of His Majesty's Government through the Labour Department.
(2) When laying off its workers or employees under subsection (1), those appointed last among workers or employees performing similar work who have completed one year of interrupted service shall be laid off first. Provided that if it becomes necessary to lay off those who have been appointed first instead of those who have been appointed last according to the prescribed order, this may be done after reasons have been given.
(3) The following procedure shall be observed when laying off workers or employees under subsection (1):

(a)one month's advance notice indicating the reasons for lay off, or one month's remuneration in lieu of such notice, shall be given to permanent workers or employees, or workers or employees who have completed one year of uninterrupted service.
(b)Lumpsum compensation at the rate of 30 days' salary for every year of service completed in the establishment shall be paid to the worker or employee concerned.

Explanation: If a person has worked for at least six months in any year, she shall be considered to have a service period of one year for the purpose of this paragraph.
(4) Subsection (3) shall not be applicable in respect of workers or employees appointed under fixedterm contracts.
(5) If it becomes necessary to fill the posts vacated by laidoff workers or employees, priority shall be given as far as possible to the workers or employees who have been laidoff.
Explanation: For the purpose of sections 11 and 12, the term "exceptional circumstances" means circumstances in which production in any establishment is halted because of breakage or damage to machinery; or because fuel, electricity, coal or other similar sources of energy are not available, or as a result of natural disaster, or a lack of availability of raw materials in sufficient quantities, or accumulation of inventory because of lack of customers, or other similar circumstances.
Section 13. Seasonal establishments. (1) Workers or employees of a seasonal establishment shall not be considered to have been maintained on reserve when such an establishment is closed during an offseason period.
(2) Notices of the commencement or closure of operations of seasonal establishments shall be furnished to the Labour Office.
(3) When a seasonal establishment is closed during offseason, those workers or employees who have completed one year of uninterrupted service shall be paid a retaining allowance amounting to at least 25 per cent of the remuneration to which they are entitled.
(4) If any dispute arises on the issue of whether or not an establishment is a seasonal one, the decision made by the Labour Department shall be final.

Section 14. One year of uninterrupted service. If any worker or employee has worked in any establishment for 240 days during a 12month period, or for the entire period of the operation of a seasonal establishment without any interruption, he shall be deemed to have served the establishment for one year without any interruption.
Explanation: Public and weekly holidays shall also be taken into account when calculating the 240day period.
Section 15. Compulsory retirement. Any worker or employer who has attained the age of 55 years may be subject to compulsory retirement at the discretion of the general manager. Provided that the general service of any worker or employee who is indispensable to the operation of the establishment may be extended for an additional five years.

Chapter 3. Working hours

Section 16. Working hours. No worker shall be engaged to work for more than eight hours a day or 48 hours a week. Every worker shall be given one day's leave each week.
Section 17. Calculation of commencement of working hours. The time of commencement of working hours of workers and employees shall be as prescribed by the general manager.
Section 18. Recess for refreshment and rest. Workers or employees of any establishment where work can be stopped at any time shall not be engaged to work for a period longer than five hours continuously without a recess of at least 30 minutes for refreshment. In establishments where work cannot be stopped and must be carried on continuously, such recess shall be provided on a rotational basis. The period of such a recess shall be considered to be a part of the daily working hours.
Section 19. Extra remuneration for overtime work. (1) If any worker or employee is engaged to work for more than eight hours in any day, or for more than 48 hours in any week, he shall be paid remuneration for such overtime work at the rate of 150 per cent of his usual remuneration. Provided that no worker or employee shall be compelled to work overtime.
(2) Ordinarily such overtime work shall not exceed four hours in the day and 20 hours in the week.
Section 20. Attendance registers to be maintained. Every establishment shall maintain attendance registers of its workers and employees.

Chapter 4. Remuneration

Section 21. Minimum Remuneration Committee. (1) On the recommendation of the Minimum Remuneration Committee, His Majesty's Government shall prescribe the minimum remuneration of workers or employees of establishments. Notices regarding the setting of remuneration rates shall be published in the Nepal Rajaptra [Official Gazette].
(2) For the setting of minimum remuneration, His Majesty's Government shall form a Minimum Remuneration Committee comprised of an equal number of representatives of workers or employees, general managers, and His Majesty's Government.
(3) The Minimum Remuneration Committee formed under subsection (2) may submit his recommendations to His Majesty's Government in matters concerning the rates of annual increments in the remuneration of workers or employees, as well as costofliving allowance or other benefits.
(4) The other functions, duties, and powers of the Committee to be formed under subsection (2) shall be as prescribed.
(5) The rates of minimum remuneration prescribed under this section shall come into force only after two months following the date of their publication in the Nepal Rajapatra.
(6) In circumstances when it has not been possible to form the Minimum Remuneration Committee, or when the Committee, even if formed, is unable to make any recommendation, the provisions contained in the above subsection shall not be deemed to have prejudiced the power of His Majesty's Government to prescribe the minimum remuneration of workers and employees in establishments.
(7) No agreement may be concluded between the general manager and workers or employees of any establishment providing for remuneration lower than the minimum remuneration prescribed by His Majesty's Government under subsection (1).

Section 22. Payment of remuneration. It shall be the responsibility of the general manager concerned to pay remuneration to the workers or employees of the establishment.
Section 23. Remuneration period. The general manager may fix the period for payment of remuneration to the workers or employees of the establishment on a weekly, fortnightly, or monthly basis. But such a period shall not be longer than one month. Provided that this provision shall not be applicable to those employed on a daily wage, piecerate, or contract basis.
Section 24. Restrictions on deductions from remuneration. (1) The remuneration due to any worker or employee shall not be deducted except in the following cases:

(a)if it is necessary to deduct fines imposed on him;
(b)if it is necessary to make deductions because of absence from work;
(c) if any loss or damage is caused to the property, in cash or in kind, of the establishment, deliberately or due to negligence, and it is necessary to make deductions therefor;
(d)if it is necessary to make any deductions because prescribed benefits have been provided;
(e)if it is necessary to make any deductions in order to adjust for advances or excess remuneration paid;
(f)if it is necessary to make any deductions on account of a period of suspension;
(g)if it is necessary to make any deductions in accordance with the orders of any government office or court;
(h)in circumstances provided by His Majesty's Government by notification in the Nepal Rajapatra; and
(i)if it is necessary to make any deductions for income tax or any other tax under the current law.

(2) Arrangements in respect of the maximum amount to be deducted under subsection (1) above, the method of deduction, and the duration of the deduction, as well as for other incidental matters, shall be as prescribed.
Section 25. Application in the event of unjustified deduction or delay in payment of remuneration. (1) The concerned workers or employees may, directly or through their representatives, apply to the Labour Office if there is a deduction of their remuneration in an unjustified manner or a delay in
the payment of remuneration, except when the payment of remuneration had been made by mistake, or the rate of remuneration has not been fixed, or the establishment is unable to pay remuneration because of any accidental occurrence, or for any special reason, or when the concerned workers or employees have not come forward or agreed to collect their remuneration.
(2) The application mentioned under subsection (1) above shall be filed within a period of six months from the date of deduction or delay in the payment of remuneration.
(3) If it is proved through necessary investigation into the applications filed under subsection (1) that there has actually been an unjustified deduction or delay, the Labour Office may order the concerned establishment to pay to the concerned workers or employees compensation in an amount not exceeding three times the amount deducted or delayed in payment, together with the amount deducted or due to be paid.
(4) If it is proved that the application filed under subsection (1) is motivated by malice or is intended to harass the general manager, the Labour Office may order the concerned applicant to pay compensation of an amount not exceeding Rs.1,000 to the general manager.
(5) The amount which is paid by one party to another in accordance with the order issued under subsection (3) or subsection (4) shall be obtained by the Labour Office, as arrears owing to the Government, and paid to the concerned party.

Section 26. Appeal. Any party dissatisfied with an order issued under subsection (3) and subsection (4) of section 25 may appeal to the Labour Court within 35 days from the date of receipt of such order. The decision of the Labour Court shall be final.

Chapter 5. Health and safety

Section 27. Arrangements relating to health and safety. (1) The general manager of each establishment shall make arrangements for the following:

(a)cleaning of the establishment every day and the use of disinfectants according to need, arrangement for appropriate drainage, repainting and revarnishing from time to time, ensuring that dirt and filth do not cause any stench, and thus maintaining the establishment in a neat and clean condition;
(b)adequate ventilation and light, as well as a suitable temperature in workrooms;
(c) disposal of and destruction of refuse, dirt and filth;
(d)prevention of the accumulation of dust, polluted air, fumes or vapour and other contaminated matter harmful to health and workrooms;
(e)necessary personal protective equipment to avoid any adverse impact on health from any noise produced in the course of work, or from any other source, and suitable arrangements to reduce noise according to the nature of work;
(f)no overcrowding of any workroom or place so as to injure the health of workers or employees. Ordinarily, there shall be 15 m3 of space for each worker or employee depending on the nature of the work. For this purpose, space 4 m above the surface shall not be taken into account;
(g)adequate hygienic water for drinking during the period of work; sufficient water in establishments using or manufacturing toxic chemicals for the purpose of extinguishing fires, or for washing or cleaning, to ensure safety in any emergency in such establishments;
(h)separate modern toilets for male and female workers or employees in easily accessible places;
(i)declaration of all or any part of the establishment as a nosmoking zone according to the nature of the establishment;
(j)compulsory medical checkups of workers or employees at least once every year in establishments which are likely to have an adverse impact on their health.

Section 28. Protection of eyes. (1) In establishments where glass, mercury, magnet, plate, iron, concrete, cement, lime, stone, and explosive materials are used, necessary protective equipment shall be provided to protect workers or employees from dust or pieces which may hurt their eyes in the course of work.
(2) Arrangements shall be made for necessary personal protective equipment to protect workers or employees from harmful radiation produced in the course of such work as welding and gas cutting.
Section 29. Protection from chemical substances. The general manager shall arrange for necessary personal protective equipment for workers or employees who handle chemical substances.
Section 30. Arrangements for protection from fire. (1) The general manager shall make arrangements for necessary modern equipment to protect the establishment from fire.
(2) Arrangements shall be made to facilitate exit from the establishment in emergencies.
(3) Other arrangements to be made by an establishment for protection from fire and for firefighting equipment shall be as prescribed.

Section 31. Dangerous machinery to be fenced. (1) A strong fence shall be constructed around each part of poweroperated dangerous machinery, apparatus, or equipment.
(2) If it is necessary to inspect, lubricate or adjust any part of dangerous machinery while it is in motion, only an adult worker or employee trained and experienced in the job shall be required to do so.
Section 32. Lifting and carrying of excessive loads. (1) No worker or employee shall be employed to lift, carry, or move any load so heavy that it is likely to cause him injury or harm.
(2) The maximum load that an adult or minor male or female worker or employee may be allowed to lift, carry, or move shall be as prescribed.
Section 33. Pressure plants. (1) If any establishment is required to operate any machinery at a pressure higher than the atmospheric pressure in the production process, necessary effective measures shall be taken to ensure that the safe working pressure is not exceeded.
(2) Arrangements relating to the methods of testing and certification, and for granting permission to operate the machinery mentioned under subsection (1) shall be as prescribed.
Section 34. Power to issue orders to make arrangements for safety. (1) If any establishment has not made safety arrangements under this Act, the Labour Office may order it in writing to make necessary arrangements and provisions within the prescribed time limit.
(2) If any establishment fails to comply with orders issued under subsection (1), the Labour Office may order it to close down its unsafe part or stop the operation of its unsafe plants and machinery. It shall be the duty of the concerned enterprise to comply with such orders.
Section 35. Duty to inform. (1) If any worker or employee dies or becomes unable to work for more than 48 hours after sustaining injury because of any accident, or for any other reason, the concerned establishment shall notify the Labour Office within three days. If the establishment determines that any worker or employee has contracted an occupationally related disease, it shall notify the Labour Office within seven days from the date upon which it became aware that this has occurred.
(2) The authority empowered to conduct investigations into the disease or accident mentioned in the notice received under subsection (1), and his functions, duties, and powers, as well as working procedures, shall be as prescribed.
Section 36. Power to determine standard. (1) The standard of safety arrangements provided for in this chapter may be prescribed by His Majesty's Government by notification in the Nepal Rajaptra according to need.
(2) Arrangements relating to health and safety measures, other than those mentioned under subsection (1), which need to be made for the use of machinery, apparatus, or equipment in an establishment, shall be as prescribed.

Chapter 6. Welfare arrangements

Section 37. Welfare fund. Every establishment shall set up a welfare fund in the prescribed manner for the benefit and welfare of its workers and employees.
Section 38. Compensation. If any worker or employee sustains any physical injury, becomes disabled, or dies while working in an establishment, such worker or employee or his family shall be paid compensation as prescribed.
Section 39. Bonus, provident fund, and medical benefits. The bonus and provident fund benefits and medical benefits to which a worker or employee is entitled shall be as prescribed.
Section 40. Leave. Public holidays, sick leave, annual leave, maternity leave, bereavement leave, special leave, leave with or without pay, etc.,
according to which workers and employees of each establishment are entitled, shall be as prescribed.
Section 41. Arrangements for quarters. (1) The general manager shall satisfy not less than 5 per cent of the gross profit of the establishment every year for the purpose of arranging for healthful quarters for workers or employees, and gradually arrange for such quarters to be provided.
(2) A fund shall be established for the amounts set aside under subsection (1).
(3) The fund mentioned under subsection (2) shall be operated in the prescribed manner.

Section 42. Arrangements for babies. (1) In every establishment employing 50 or more women workers and employees, the general manager shall arrange for a healthful nursery for their babies.
(2) Arrangements shall be made for necessary toys and trained nurses for babies mentioned in subsection (1).
(3) Women workers and employees shall be granted a recess to nurse their babies according to need.

Section 43. Rest rooms. The general manager of an establishment employing 50 or more workers or employees shall arrange for rest rooms equipped with the minimum necessary facilities.
Section 44. Canteen. The general manager of an establishment where 50 or more workers or employees work simultaneously shall provide a canteen.

Chapter 7. Special provisions applicable to special establishments

Section 45. Tea estates. (1) The following special provisions shall be applicable in respect of tea estates:

(a)Formation of committee: His Majesty's Government may form a committee as prescribed to advise it regarding promotion, policy formulation, and other matters concerning tea estates.
(b)Arrangements for quarters: The general manager of a tea estate shall arrange for suitable quarters within the tea garden for those workers who have no place of residence near the estate.
(c) Arrangements for first aid: The general manager of a tea estate shall arrange for a first aid centre functioning under a trained employee to provide first aid treatment free of charge for any minor injury sustained by any worker or employee working on the estate, or any member of his family.
(d)Safety equipment: The general manager shall make available safety equipment and apparatus required for the personal safety of workers of a tea estate.
(e)Arrangements for a primary school: If workers residing in quarters made available by a tea estate have 50 or more children of the schoolgoing age of 5 to 14 years, and if there is no school within a distance of 1 km from the tea estate concerned, the general manager shall operate a primary school for such children.
(f)Essential commodities: If there is no market near a tea estate, the general manager shall make arrangements to ensure the availability of essential commodities in a manner convenient for the workers and employees of the tea estate.
(g)Arrangements for entertainment: The general manager shall make necessary arrangements for sports on the premises of the tea estate for the mental and physical development of its workers.
(h)Employment on contract basis: This section shall not be deemed to prejudice the power to conclude contractual agreements between the general manager and the workers of a tea estate for specific work of the tea estate.

(2) For the purpose of this section:

(a) "Tea estate" means a tea estate with commercial objectives that is registered under the current law; the term includes factories established within a tea estate.
(b) "Workers of a tea estate" means persons who perform such functions as digging, ploughing, levelling, weeding, spraying, sowing, reaping, planting, trimming, picking, and uprooting on the premises of a tea estate; the term includes persons who clean lands, buildings, or machinery, or any part thereof, or perform any other work related to a tea estate.

Section 46. Construction enterprises. The following special provisions shall be applicable in respect of construction enterprises:

(a)Arrangements for tools relating to construction works: Tools and materials required by workers engaged in construction works on any construction site shall be supplied in adequate quantities by the general manager.

Explanation

(b)Special arrangements on temporary construction sites: The general manager of a temporary construction site where 50 or more workers work shall arrange for quarters, food, drinking water, etc. for workers having no place of residence near the site.
(c) Accident insurance: The general manager shall arrange to insure workers on construction sites against accidents in the prescribed manner.
(d)Safety arrangements:

(i)The general manager shall make necessary and suitable safety arrangements for construction sites.
(ii)The general manager shall arrange for personal protective equipment required by workers employed in construction works.

Section 47. Transport enterprises. (1) The following special provisions shall be applicable in respect of transport enterprises:

Working hours

(i)Workers and employees working in vehicles may be engaged in work until the concerned vehicle reaches its destination. Provided that arrangements shall be made for at least two drivers, on a rotational basis, to drive passenger vehicles on long routes.

Explanation

(ii)Where the driver of a vehicle on long routes transports live animals or goods, arrangements shall be made to allow him to take rest breaks at different places before reaching his destination.

Trip allowance

Fifty per cent allowance to be paid if the vehicle is broken down or not in service

Accident insurance

Firstaid equipment

Prohibition of consumption of intoxicants

(i)Workers or employees working on a vehicle transporting passengers, animals, or goods shall not consume alcohol before driving the vehicle and until it reaches its destination.
(ii)The general manager concerned may dismiss from service any driver who drives a vehicle after having consumed intoxicants, as such behaviour shall be considered to be misconduct. Provided that any worker or employee dismissed from service on the above grounds shall be granted an opportunity to justify his conduct.
(iii)Any person who is dissatisfied with an order issued under subparagraph (2) may appeal to the Labour Court within 35 days of the date of receipt of such an order.

Commission agents

Changes in ownership

(2) For the purpose of this section, the term "transport enterprise" shall mean a transport service charging fares or freight for transporting passengers, animals or goods from one place to another in vehicles operated by means of mechanical equipment.
Section 48. Hotel, travel, trekking, adventure, rafting, jungle, safari and other similar enterprises. The following special provisions shall be applicable to hotel, travel, trekking, adventure, rafting, jungle safari and other enterprises.

Women may be employed

Safety of workers or employees employed in trekking or rafting enterprises

(i)The general manager of a trekking, rafting or other adventure enterprise shall arrange for necessary personal protective equipment, as well as the clothes, shoes, etc. required by workers or employees engaged in such work in order to protect their health, taking into consideration the season in question.
(ii)It shall be the responsibility of the concerned general manager to undertake or make arrangements for rescue operations according to need.

Accident insurance

Field allowance, etc., to be paid

Arrangements for first aid

Section 49. Other provisions also to be applicable. In addition to the provisions referred to under this chapter, the provisions of this Act and the rules established under the Act shall also be applicable to establishments referred to under sections 45, 46, 47 and 48.

Chapter 8. Conduct and penalties

Section 50. Forms of penalties. The general manager may punish any worker or employee for misconduct in the following manner:

(a)warning;
(b)withholding of annual increment in salary;
(c) suspension; or
(d)dismissal from service.

Section 51. Misconduct. For the purpose of section 50, the following actions of a worker or employee shall be regarded as misconduct:

(a)causing physical injury or harm with or without using any kind of weapon; tying up or detaining the general manager, manager, or any employee; engaging in rioting, assault or destructive activities within the establishment in respect of any labour dispute or any other issue;
(b)taking or instigating others to take action in such a way as to adversely affect the production of or the provision of services by the establishment, or preventing the supply of food and water, or cutting telephone or electricity service, or obstructing movement within the establishment;
(c) stealing any property of the establishment, or showing dishonesty in the business of the establishment;
(d)offering or accepting bribes;
(e)conviction for any criminal offence involving moral turpitude and imprisonment for such an offence;
(f)participation or the compulsion of others to participate in a strike which has been declared irregular or illegal;
(g)participating in a strike without fulfilling the legal requirements, or wilfully slowing down work so that the interests of the establishment are harmed;
(h)wilfully destroying or damaging any asset of the establishment, or carrying outside the premises of the establishment and using or allowing unauthorized persons to use such assets without obtaining permission from the authorized person;
(i)frequently and intentionally violating any order or directive issued under this Act or the rules established under the Act, or any byrules made by the establishment, or misbehaving in relations with the clients of the establishment;
(j)absence from work or frequent late arrivals for work without having obtained permission;
(k)consuming alcohol during office hours, or reports to work after consuming alcohol;
(l)committing any action which violates the secrecy of the establishment relating to any special technology, with the objective of causing losses to the establishment where he is employed; or
(m)wilfully misusing or damaging any object or facility kept to ensure the welfare, health and safety of workers or employees.

Section 52. Penalties. (1) Any worker or employee who behaves in a manner mentioned under paragraphs (j), (k), (l) or (m) of section 51 may be issued a warning.
(2) The annual increment in the remuneration of a worker or employee who behaves in a manner mentioned under clauses (f), (g), (h) or (i) of section 51 may be withheld.
(3) Any worker or employee who behaves in a manner mentioned under paragraphs (b), (c) or (d) of section 51 may be suspended for a period not exceeding three months.
(4) Any worker or employee who behaves in a manner mentioned under paragraphs (a) or (e) may be dismissed from service.
(5) Any worker or employee committing a misconduct mentioned under subsections (1), (2) or (3) after being twice punished for such misconduct, may be dismissed.

Section 53. Procedures. (1) Any permanent worker or employee, or any worker or employee who has completed one year's uninterrupted service under section 52, shall be entitled to notice explicitly referring to the alleged misconduct and the punishment that might be imposed if the misconduct is proved, and a fiveday period where paragraph 51(1) is applicable, and a sevenday period where other clauses are applicable, in which he may provide an explanation for the alleged misconduct.
(2) If the employee or worker concerned does not submit an explanation within the timelimit prescribed under subsection (1), or if the explanation submitted by him is not found to be satisfactory, he may be punished under section 50 for misconduct.
(3) If the worker or employee concerned does not accept notification of the timelimit provided under subsection (1) or remains absent, he shall be deemed to have been notified about the timelimit after it is sent to his address by registered post and the copy is posted on the public notice board of the establishment, subject to a statement that the copy was posted, prepared and witnessed by at least three persons and subject to the sending of another copy to the Labour Office concerned.

Section 54. Power of the Department to dismiss from service. (1) Any worker or employee who illegally engages in rioting or gherao, or directly or indirectly instigates others to do so, in an establishment other than the one in which he is working, or in any government office, may be dismissed from service by the Department.
(2) If it becomes necessary to dismiss the worker or employee under subsection (1), the procedures set out under section 53 shall be adopted.
Section 55. Misconduct of manager or general manager. (1) The following actions shall be regarded as misconduct of a manager or general manager:

(a)wilful violation or disregard for this Act or the rules, orders or directives established under the Act;
(b)closure of the establishment, or laying off workers or employees in contravention of this Act;
(c) continuing a lockout which has been declared illegal;
(d)severely thrashing or manhandling workers or employees; or
(e)provoking or instigating workers or employees to foment distrust or ill will among them.

(2) If a manager or general manager is proven to have behaved in a manner referred to under paragraphs (a), (b) or (c) above, His Majesty's Government may punish him with a fine of between Rs.1,000 and Rs.5,000.
(3) If a manager or general manager is proven to have behaved in a manner mentioned under paragraphs (d) or (e) above, the Labour Office may punish him by imposing a fine not exceeding Rs.1,000, or may order him to pay an appropriate compensation to the worker or employee who has been harmed.

Section 56. Punishment for obstruction of government officers. If anyone causes obstruction of any government employee engaged in any function or proceeding under this Act, or does not submit a register or other document which the government employee wishes to have produced before him, or does not produce or allow him to examine any worker or employee whom he wishes to examine or to have produced before him, he may be punished by the Labour Office with a fine of between Rs.500 and Rs.2,000.
Section 57. Other penalties. Unless there exist provisions for punishment under other sections of this Act, any person who acts in contravention of the provisions of this Act or the rules or written orders or directives issued under the Act, may be punished by the Labour Department with a fine of between Rs.1,000 and Rs.5,000 for each such offence according to its nature and gravity; if he continues to commit the offence after it has been proved that he has committed such an offence, he shall be punished with an additional fine of Rs.100 for each day thereafter.
Section 58. Action to be invalid. Except otherwise provided for under this Act or the rules established under the Act, if any action has been taken in contravention of this Act and the rules established under the Act, it shall be invalid by order of the Labour Department.
Section 59. Filing of complaints and timelimit. (1) Complaints relating to offences punishable under this Act may be filed through the Labour Office, or any person authorized by it.
(2) Complaints relating to an offence punishable under this Act shall be filed within three months from the date of such an offence. Provided that complaints relating to the failure of anyone to comply with an order issued under this Act by the Labour Department, the Labour Officer or the Factory Inspector may be filed within six months from the date of such offence.
(3) Complaints relating to offences punishable under this Act shall be filed with the authority designated as the penal authority under different
sections of this Act, and complaints relating to other offences shall be filed with the Labour Court.
Section 60. Appeal. Any person who is dissatisfied with punishment awarded or an order issued under this chapter may file an appeal as follows within a period of 35 days from the date of receipt of notice of such punishment or order:

(a)Appeals against orders issued by His Majesty's Government or the Labour Department may be filed with the Appelate Court.
(b)Appeals in respect of cases in which original action is taken and which are decided of by the Labour Court may be filed with the Appelate Court.
(c) Appeals against punishment imposed or orders issued by the general manager, or other officers or offices, may be filed with the concerned Labour Court.

Section 61. Collection of fines. Fines imposed under this Act shall be recovered from the concerned person as arrears due to the Government according to current law.

Chapter 9. Board, officers and other provisions

Section 62. Central Labour Advisory Board. (1) His Majesty's Government may form a tripartite Central Labour Advisory Board with representation of workers or employees, general managers and His Majesty's Government, to make recommendations in matters concerning the formulation of policies and the drafting of laws relating to labour.
(2) The composition, as well as the functions, duties and powers of the Board mentioned under subsection (1) shall be as prescribed.
(3) The Board may regulate the working procedures of its meetings.

63. Labour Relations Committee. (1) In every establishment, the general manager shall form a Labour Relations Committee for the purpose of building a cordial atmosphere between workers or employees and management, thus developing healthful labour or industrial relations based on mutual participation and cooperation.
(2) The composition and the functions, duties and powers of the Committee referred to under subsection (1) shall be as prescribed.
(3) The Committee referred to under subsection (1) may regulate its own working procedures.

Section 64. Appointment of Labour Officer. His Majesty's Government may, by notification in the Nepal Rajapatra, appoint one or more Labour Officers for any specific area according to need, or may designate any other officer to perform the functions of a Labour Officer.
Section 65. Powers of Labour Officers. (1) Labour Officers shall have the power:

(a)to enter into places being used for the purpose of the establishment according to need;
(b)to inspect documents and registers maintained in the establishment that relate to workers or employees;
(c) to perform necessary functions or offer advice as may be necessary for the improvement of labour relations;
(d)to make efforts to settle disputes between the general manager and the workers or employees;
(e)to arrange for the enforcement of welfare provisions where these have not yet been enforced, and where these have already been enforced, to ascertain whether or not such arrangements are operating smoothly;
(f)to determine whether or not the minimum remunerations prescribed by His Majesty's Government have been enforced;
(g)to record statements of any person as necessary to fulfil the objectives of this Act;
(h)to discharge the functions of the Factory Inspector, other than technical functions, in his absence;
(i)to discharge other functions according to the directives of His Majesty's Government and the Labour Department.

(2) The other functions, duties and powers of a Labour Officer shall be as prescribed.
Section 66. Appointment of Factory Inspectors. By notification in the Nepal Rajapatra, His Majesty's Government may appoint one or more Factory Inspectors for any specific region as necessary. It may also appoint a Chief Factory Inspector for the entire Kingdom of Nepal.
Section 67. Powers of a Factory Inspector. (1) The Factory Inspectors shall have the power:

(a)to enter into places being used for the purpose of the factory as necessary;
(b)to inspect factory buildings, lands, plants and machinery and health and safety arrangements; to take samples of finished and semifinished goods used in the factory and to test them or arrange for them to be tested; to inspect factory registers and documents, and to record any statements of any person, as necessary;
(c) to inspect boilers and pressure vessels, and to give permission for their operation;
(d)to advise and assist the general manager as needed to arrange for the training of workers or employees;
(e)to discharge the functions, duties and powers of the Labour Officer in his absence;
(f)to discharge other functions according to the directives of His Majesty's Government and Labour Department.

(2) The other functions, duties and powers of the Factory Inspector shall be as prescribed.
Section 68. Welfare Officer. (1) A Welfare Officer shall be appointed in every establishment employing 250 or more workers or employees. Where an establishment employs more than 1,000 workers or employees, an assistant Welfare Officer shall also be appointed.
(2) The general manager of an establishment employing fewer than 250 workers may designate any officer of the establishment as Welfare Officer.
(3) If both a Welfare Officer and assistant Welfare Officer are appointed under subsection (1), the Labour Department must be notified accordingly.
(4) The functions, duties and powers of the Welfare Officer and assistant Welfare Officer appointed or designated under subsections (1) or (2) shall be as prescribed.

Section 69. Notice to be given to establish an establishment. (1) If it becomes necessary to establish or build an establishment, or to expand an existing establishment on any land or in any building, the general manager shall notify the Labour Office explicitly referring to the prescribed particulars.
(2) If the Labour Office considers it necessary in the course of an investigation into the particulars submitted under subsection (1) to make any alterations of such establishments for health, safety or environmental reasons, it may direct the general manager concerned to do so. It shall be the duty of the general manager concerned to comply with such directives.
Section 70. Notice to be given by the general manager. (1) If the general manager is required to use or occupy any new land or building for the establishment, he shall despatch a written notice to the Labour Office concerned at least 15 days in advance explicitly referring to the prescribed particulars.
(2) The manager or general manager who assumes responsibility for the first time shall notify the Labour Office within seven days of such newly assumed responsibility.
Section 71. Notices and posters. The Labour Officer or the Factory Inspector may direct the manager or general manager of the establishment to display notices and posters provided for under this Act or under the rules established under this Act, as well as those concerning health, safety and welfare provisions relating to employees, so that everyone can see and understand them.

Chapter 10. Settlement of labour disputes

Section 72. Formation of Labour Court. (1) For the purpose of this Act, His Majesty's Government may form a Labour Court by notification in the Nepal Rajapatra. The jurisdiction and venue of such a court shall be as prescribed in the notification.
(2) The working procedures of the Labour Court formed under subsection (1) shall be as prescribed.
(3) Notwithstanding subsections (1) and (2), until the Labour Court has been formed, the Appelate Court shall discharge functions to be discharged by the Labour Court under this Act.

Section 73. Procedures for making individual claims or complaints. (1) If one or more workers or employees have any individual claims or complaints against the general manager regarding matters concerning their employment, any such claims or complaints may be submitted to the general manager in writing.
(2) On receipt of any claim or complaint under subsection (1), the general manager must settle the problem through discussions with the concerned worker within a period of 15 days.
(3) If the discussions held under subsection (2) fail to resolve the problem, the workers or employees concerned may submit an application to the appropriate Labour Office explicitly referring to their claim.
(4) Within seven days from the date of receipt of a claim made under subsection (3), the Labour Office shall settle the problem by arranging for bilateral talks between the general manager and the workers or employees concerned.
(5) If the problem is not resolved through procedures referred to under subsection (4), the chief of the appropriate Labour Office shall take a decision in respect of the dispute in question within a period of seven days.
(6) Any party dissatisfied with a decision made under subsection (5) may file an appeal with the Labour Court within a period of 35 days from the date of receipt of notice of the decision.

Section 74. Procedure for making claims relating to collective disputes. (1) Workers or employees of an establishment shall explicitly set out demands or claims relating to their collective rights, interests and benefits, as well as the names of their representatives, in writing, and signed by at least 51 per cent of their total number, and shall submit such a document to the general manager through their representatives.
(2) On receipt of claims relating to disputes under subsection (1), the general manager shall reach an agreement by settling the problem through bilateral talks with the representatives referred to under subsection (1) within a period of 21 days.
(3) If the problem is not settled in the manner referred to under subsection (2), a bilateral discussion shall be arranged by the Labour Office and the dispute shall be resolved within 15 days.
(4) If the problem is not settled by means of the discussion held under subsection (3), the matter shall be referred to an arbitrator to be appointed by mutual consent of both the general manager and the workers and employees. In the event that no such arbitrator can be appointed, the dispute may be brought before a tripartite committee formed with the consent of both parties by His Majesty's Government with an equal number of representatives of workers or employees, the general manager and His Majesty's Government.
(5) The arbitrator appointed or the committee formed under subsection (4) shall take a decision on the matter within a period of 15 days.
(6) Any party dissatisfied with a decision taken under subsection (5) may file an appeal with His Majesty's Government within 35 days from the date of receipt of the decision.

Section 75. Restrictions on claims. Notwithstanding the above, demands or claims of the following kind may not be made if they:

(a)contravene the Constitution of the Kingdom of Nepal;
(b)are based on unsubstantiated or baseless charges and are, therefore, opposed to the interests of any party;
(c) concern matters which may affect the personal conduct of any worker or employee;
(d)concern matters which are not connected with the establishment; or
(e)concern matters in respect of which a collective agreement has been concluded less than two years previously.

Section 76. Notice of strike. If workers or employees of any establishment wish to strike because of a failure to settle their demands through the procedures referred under subsection 74(3), they may do so after submitting a resolution to that effect passed by 60 per cent of their total strength by means of secret ballot, as well as a written notice to that effect, to the general manager explicitly referring to their demands or claims, and their justifications, and by forwarding a notice thereof to the Labour Department, the Labour Office concerned and the local administration.
Section 77. Lockouts. (1) The establishment may declare a lockout after the general manager obtains the approval of His Majesty's Government to do so by furnishing evidence to justify such action in the event that a strike is begun or continued without the advance notice required under subsection 76(1), or where a collective dispute fails to be settled under the procedure mentioned in subsection 74(3).
(2) Before declaring a lockout under subsection 1, the general manager shall issue a notice at least seven days in advance informing all workers that a lockout shall be declared if the strike is not discontinued. Such a notice shall also specify the date on which the lockout is intended to be declared.
(3) The general manager may declare a lockout without fulfilling the formalities set out under subsections (1) and (2) if gherao, rioting or destructive activities of the workers in the course of a strike are likely to harm the establishment. If the lockout is declared in such a manner, the Labour Office and the Labour Department shall be notified accordingly, accompanied by reasons, within a period of three days.
(4) If the lockout declared in any establishment is determined to be unjustified or likely to disturb peace and security in the country, or to prove detrimental to the economic interests of the company, His Majesty's Government may declare it to be illegal at any time.

Section 78. Prohibition of strikes. (1) Notwithstanding the above provisions of this Act, if current law prohibits workers or employees of any establishment from engaging in a strike, they shall not be entitled to strike.
(2) Employees who are appointed or assigned to discharge functions relating to the control, security, or guard duty of an establishment shall also not participate in a strike.
(3) Employees who are prohibited from engaging in a strike under subsections (1) and (2) may present their legitimate demands to the general manager. If any dispute arises because of failure to settle such demands, His Majesty's Government shall form a tribunal to settle such disputes. The decision of the tribunal shall be final and binding on both parties.
(4) No strike may be commenced or lockout declared during the course of procedures under section 74.

Section 79. Legal recognition of collective agreements. (1) Agreements concluded between a general manager and workers or employees to settle their dispute shall be legally binding on the parties concerned. Such agreement shall be registered at the Labour Office.
(2) If an agreement registered under subsection (1) refers to the date when it is to come into operation, it shall come into operation on that date. If no such date has been referred to, it shall come into operation on the date of its registration at the Labour Office. No further demands may be made in respect of provisions contained in such agreements prior to the expiry of two years from their effective date.
Section 80. Power to issue orders to stop strikes. His Majesty's Government may issue an order at any time to stop a strike proposed or begun under this Act or the rules established under the Act if it appears likely that the strike will create an extraordinary situation and thus disturb the nation's peace and security, or that it will adversely affect the nation's economic interests, or if any strike begun involves essential services prescribed as such according to current laws.
Section 81. End of lockout. A lockout declared by an establishment shall be deemed to have ended if its workers or employees report for work, or if the general manager declares the end of such a lockout, or if His Majesty's Government declares that the lockout is illegal under section 77, or issues an order to stop a strike under section 80, from the date of such a declaration or order.
Section 82. Remuneration for a period of lockout. Workers or employees shall be paid remuneration for periods of illegal lockouts.
Section 83. Special arrangements for the settlement of disputes. (1) If His Majesty's Government considers that any dispute has arisen or may arise between the general manager and the workers or employees of any establishment, it may form a committee consisting of one or more persons, or a tripartite committee consisting of the representatives of the general manager, the workers or employees and His Majesty's Government, in order to settle the dispute. The committee concerned may determine its own working procedures.
(2) A decision made by His Majesty's Government on the basis of the report submitted by the committee formed under subsection (1) shall be final and binding on both sides.
(3) A committee formed under subsection (1) above shall have the powers of a court for the examination of witnesses or evidence, the subpoena of witnesses and the procurement of documents relating to a dispute, as conferred by current Nepal law.

Chapter 11. Miscellaneous

Section 84. Special powers of His Majesty's Government. (1) Notwithstandi ng the provisions of this Act, His Majesty's Government may, by notification in the Nepal Rajapatra, determine that any provision of this Act is not applicable to any establishment for a specified period.
(2) His Majesty's Government may, by notification in the Nepal Rajapatra, determine that minimum remuneration and other benefits under this Act shall also apply to establishments employing less than ten workers or employees.
Section 85. Power to remove obstacles. If any obstacle to the implementation of this Act arises, His Majesty's Government may, by notification in the Nepal Rajapatra, issue an order that such obstacles be removed.
Section 86. Power to establish rules. (1) His Majesty's Government may establish rules to implement the objectives of this Act.
(2) Without prejudice to the generality of the power conferred under subsection (1), such rules may, in particular, provide for the following:

(a)matters relating to the safety of workers;
(b)operation of employment services;
(c) conditions relating to overtime work;
(d)training programmes for promoting the efficiency of workers or employees;
(e)working procedures relating to the Labour Court;
(f)compensation to be paid to workers or employees;
(g)compilation of data concerning workers and employees;
(h)compilation of information relating to labour markets.

Section 87. Rules to be submitted. Every establishment shall submit to the concerned Labour Office a copy of its rules concerning the employment conditions of its workers or employees.
Section 88. Provisions for establishments owned by His Majesty's Government. Action regarding the employment conditions of employees or establishments fully or partially owned by His Majesty's Government shall be taken in accordance with the provisions contained in the rules or byrules relating to their employment conditions. Action concerning workers shall be taken in accordance with this Act.
Section 89. Power of His Majesty's Government to make directives. (1) His Majesty's Government may issue necessary directives to the general manager in order to fulfil the objectives of this Act.
(2) His Majesty's Government may punish the general manager of an establishment who does not comply with directives issued under subsection (1) with a fine ranging between Rs.1,000 and Rs.10,000 in each case. Alternatively, it may order that the establishment be operated through other arrangements by replacing such a general manager.
Section 90. Delegation of authority. His Majesty's Government may delegate powers vested in it under this Act to any authority by notification in the Nepal Rajapatra.
Section 91. Precedence of this Act. Action regarding matters provided for under this Act shall be taken accordingly; action in respect of other matters shall be taken according to the current law.
Section 92. Repeal and saving.

(1) The 1959 Nepal Factories and Factory Workers Act is repealed.
(2) Action taken under the 1959 Nepal Factories and Factory Workers Act shall be deemed to have been taken under this Act.

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