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Labour law in Nepal: These are key rights of workers

Nepali workers are forced to face various problems in the workplace. For example, their regular payment and safety are frequently challenged on various pretexts.

As an effort to safeguard labor rights, the government issued numerous laws, directives and circulars to regulate the labor market. Among many, Labor Act 2017 is the principal law regulating the labor market in Nepal and Ministry of Labor, Employment and Social Security is the concerned ministry in Nepal.

Here are some of the important provisions of the Labor Act 2017 that every worker should know about because they are directly related to your fundamental rights:

Working hours

Section 28 of the law mentions that no employee shall be deployed for more than eight hours a day and 48 hours a week. For overtime, the employee shall not be employed more than four hours a day and 24 hours a week.

 Leave and holidays

1. Working hours

Section 28 of the law mentions that no employee shall be deployed for more than eight hours a day and 48 hours a week. For overtime, the employee shall not be employed more than four hours a day and 24 hours a week.

 2. Leave and holidays

Chapter 9 of the act has provisions about leave and holidays to be provided to the employee. The leave and holidays are mentioned in the following table:

SNLeaveAnnual allocations
1Weekly offOne day every week
2Public holidays13 days (14 days including International Women Labor Day for female employees)
3Home leaveOne day for every 20 workdays
4Sick leaveFully paid up to 12 days
On a proportional basis for those employees who have not completed one year of service
5Maternity leave14 weeks, fully paid for 60 days
6Paternity leave15 days, fully paid
7Mourning leave13 days, fully paid
8Leave in lieuFor the labourers put in work on public holiday or weekly off

3. Remuneration/stipend

Everyone working for an organisation shall be entitled to receive timely remuneration and benefits from the starting day of the work as prescribed in section 34 of the act.

As per section 107, the government should fix the minimum remuneration as per the recommendation provided by the minimum remuneration fixation committee. As of now, the minimum remuneration is Rs 13,450/- per month, Rs 192/- for a day and Rs 26/- for an hour is fixed.

Further, section 36 states that an employee should be entitled to an annual increment of remuneration each year in amount equal to at least half a day remuneration based on the monthly basic remuneration.

4. Terminal benefits

Labor Act 2017 has provisioned some terminal benefits for the employee of the organisation. The benefits have been mentioned in the below table:

SNBenefitsDetails
 1Provident fundContribution: 10% by the employer and 10% by the employee of the basic remuneration of the concerned employee
Eligibility: permanent employee
 2GratuityRate of Gratuity: 8.33% of basic remuneration  
Time of allocation: Every month (at the time of payment of the remuneration)  
Eligibility: Since the first day of employment
 3Leave encashmentAccumulation:  Home leave up to 90 days, sick leave up to 45 days
Encashment: At the time of discontinuation of service at the rate of last drawn salary

Applicability of Labor Act 2017

The Labor Act 2017 is applicable to companies, private firms, partnership firms, cooperatives associations or other organisations (“entities”) in operations, or established, incorporated, registered or formed under prevailing laws to undertake industry or business or provide services with or without the profit motive.

However, section 180 of the act states that civil servants, the staff of Nepal Army, Armed Police Force, entities incorporated under other prevailing laws and working journalists are also not governed by the Labor Act 2017 unless the employment contract specifically provides for the applicability of the act.

This is because there are separate specific laws for the staff working in these fields.

Types of employment

Section 10 of the act has envisioned five types of employments as mentioned below:

  1. Regular employment
  2. Work-based employment
  3. Time-bound employment
  4. Casual employment
  5. Part-time employment

Further, sections 16 and 17 elaborately mention interns. “A person may be allowed to work as an intern pursuant to the approved syllabus of any educational institution after concluding the agreement with that educational institutions. The interns shall not be engaged at work exceeding eight hours a day and 48 hours a week. Interns are entitled to health and safety arrangements, and to medical expenses and compensation in case of an injury at work.”

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Regmi is an advocate associated with Associates Hub Law Firm.

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