Act No. 9 of the year 2049 B.S.
An Act to provide for Labour
Preamble: Whereas it is expedient to make timely provisions relating to labour by making provisions for the rights, interests, facilities and safety of workers and employees working in enterprises of various sectors.
1. Short title and commencement:
(1) This Act may be called as the “Labour Act, 2048 (1992)”.
(2) It shall come into force immediately.
2. Definitions. In this Act, unless the subject or context otherwise requires :-:
(a) “Production process” means any of the following processes:
(i) works relating to making, altering, repairing, ornamenting, engraving, finishing, packing, oiling, washing, cleaning, breaking-up, dismantling or other kinds of activities given to any article or substance with a view of bringing it to its use, sale, distribution, transportation, or disposal.
(ii) pumping of oil, water, or sewage;
(iii) generating, transforming, and transmitting energy; or
(iv) printing, lithography, photography, book-binding and other similar work.
(b) “Enterprise” means any factory, _company, organisation, association, firm, or group thereof, established under the prevailing laws for the purpose of operating any industry, profession or service, where ten or more workers or employees are engaged and this expression also includes:
(1) Tea estates, established under the law for commercial purpose;
(2) Enterprise operating within the industrial districts established by government of Nepal where less than ten workers or employees are engaged.
(c) “Employee” means persons engaged in the administrative functions of the enterprise.
(d) “Worker” means a person employed on the basis of remuneration _…………to work in any building, premises, machinery or any part thereof used for any productions process or providing service, or any act relating to such work or for any unscheduled works and this expression also includes any worker working at piece-rate, contract or agreement.
(e) “Manager” means a person appointed for performing the functions in the Enterprise.
(f) “Proprietor” means the person having final authority on the activities of the Enterprise and this expression also includes any person appointed as the Chief of any §branch or unit of the Enterprise with powers to exercise final responsibility or authority in respect thereof.
(g) “Factory Inspector” means a factory inspector appointed by Government of Nepal and this expression also includes the Senior Factory Inspector.
(i) “Minor” means a person who has attained the Ôage of sixteen years but has not completed the age of eighteen years.
(j) “Adult” means a person who has completed the age of eighteen years.
(k) “Energy” means electrical or mechanical energy. Provided that, this word shall not include any energy generated from human or animal sources.
(l) “Seasonal Enterprise” means an Enterprise which cannot be operated or which is not feasible to operate in any season other than the specific season and this expression also includes a Seasonal enterprise which cannot operate more than one hundred and eighty days in one year.
(m) “Day” means period of twenty-four hours starting from any midnight and ending at another midnight.
(n) “Week” means a period of seven days starting from midnight on Saturday or from midnight of such other day as prescribed by the Department of Labour.
(o) “Welfare Officer” means the welfare officer appointed under this Act.
(p) “Labour Officer:” means the Labour Office appointed under this Act and this\ expression also includes the Senior Labour Officer.
(q) “Labour Court” means the Labour Court under this Act.
(r) ” Remuneration” means the remuneration or wage to be received in cash or kind from the Enterprise by the worker or employee for the works performed in the Enterprise and this expression also includes any amount to be received in cash or kind for the works done under piece-rate or contract. Provided that, this expression does not include any kind of allowance or facility
(s) “Prescribed” or “as prescribed” means prescribed or as prescribed in the Rules framed under this Act.
CHAPTER – 2
Employment and Security of Service
3. Classification of Job:
(1) The Proprietor shall classify the job of the workers and employees of the Enterprise according to the nature of production process, service or functions of the Enterprise and shall provide the information thereof to the concerned Labour Office.
(2) If the classification done pursuant to Sub-section (1) requires any amendment, the Labour Officer may, stating the reasons thereof, issue a directive to the Proprietor and it shall be the duty of the Proprietor to abide by such directive.
4. Appointment of Worker and Employee:
(1) In cases where it is required to appoint a worker or employee in any post classified pursuant to Section 3, the Manager Shall have to advertise in order to select such a worker or employee and the worker or employee so selected shall have to be provided with appointment letter and be engaged at work..
(2) The worker and employee appointed under Sub-section (1), §shall be kept on probation period unless he/she completes the continuous service period of one year and, based on, his/her efficiency, sincerity discipline, diligence towards works, punctuality, etc in this period he/she shall be appointed permanently. An appointment letter shall be provided with the name of the post of the worker or employee and his/her remuneration and conditions of service while making such appointment. Information thereof shall also be provided to the Labour Office.
Clarification: For the purpose of this Sub-section, the words ” the continuous service period of one year” means the period of two hundred forty days engaged at work during a period of twelve months in an Enterprise, or the period served continuously in a Seasonal Enterprise during the period of such a running season, by a worker or employee and, while calculating the said two hundred forty days, public and weekly holidays shall also be counted.
(3) The worker or employee engaged on piece-rate or contract in the works of permanent nature of an Enterprise shall also be appointed permanently under Sub-section (2).
(4) The workers or employee engaged under Sub-section (3) shall be entitled to facilities provided in this Act according to the scale of his/her post.
4A. Prohibition of Engaging Non-Nepalese Citizens at Work:
(1) Non-Nepalese citizens shall not be permitted to be engaged at work in any of the posts classified pursuant to Section 3.
(2) Notwithstanding anything contained in Sub-section (1), if a Nepalese citizen could not be available for any skilled technical post even after publishing an advertisement in national level public newspapers and journals, the Manager may submit an application to the Department of Labour along with the evidence of such fact for the approval to appoint a non-Nepalese citizen.
(3) If it is found, in conduction of an inquiry upon the submission of any application pursuant to Sub-section (2), that a Nepalese citizen would not be available for the skilled technical post mentioned in the application, the Department of Labour may, on the recommendation of the Labour Office, grant approval to engage a non-Nepalese citizen at work years for a maximum period of upto five years not exceeding two years at a time and, in the specialized kind of skilled technical post, for a period upto seven years.
(4) The Manager, who engages non-Nepalese citizens at work pursuant to Sub-section (3), shall have to make arrangements for making the Nepalese citizens skilled and for replacing the non-Nepalese citizens gradually by them. ”
5. Engagement in Work:
(2) Minors and females may be engaged in the works normally from six o’clock in the morning till six o,clock in the evening, except in the prescribed conditions.
(3) By making an appropriate arrangement with mutual consent between the proprietor and the worker or employee, the females may also be engaged in the works similar to the males.
(4) The Manager may transfer a worker or employee to any branch or unit of the Enterprise without causing any difference in the nature or standard of work. .
(6) Computation of period of Works: For the purpose of computing the period of
works performed in the Enterprise by any worker or employee, the following
period shall also be counted.
(a) the period remained in reserve under Section 11; and
(b) the period stayed §with remuneration leave.
7. Appointment in Contract Service: If an Enterprise needs to increase in production or service immediately, any person may be appointed in contract, by fixing a time period and setting forth the remuneration to be received by him/her and the terms of service, for any specified work other than the works of the Enterprise which are permanent in nature.
8. Change of Ownership shall not Adversely Affect: Any change in the ownership of the Enterprise shall not be deemed to have affected on the terms and conditions of service of the workers and employees of the Enterprise.
9. Separate Registers of the Workers and Employee to be Kept: (1) In each Enterprise, the Proprietor shall maintain separate registers of the workers and employees mentioning the following particulars –
(a) Name of the worker or employee,
(b) Nature of job,
(c) Remuneration and method of its payment,
(d) Other prescribed particulars.
(2) The register maintained under Sub-section (1) shall have to be submitted when demanded by the Labour Officer, Factory Inspector or any other person designated by the Labour Office.
10. Security of Service: The service of any permanent worker or employee may not be terminated without following the procedures prescribed by this Act or the Rules or Bylaws made under this Act.
11. Keeping on Reserve: (1) In case where the curtailment of production or service in any Enterprise for some period is necessary or where operation of the Enterprise cannot be continued for some special circumstance, the Proprietor, under Subsection (2), may curtail its production or service or may close the Enterprise or a part of thereof.
(2) Permission from the Labour Office in case of a period up to fifteen days and from the Department of Labour in case of a period for more than that shall have to be taken while curtailing the production or service or closing the Enterprise or any part thereof as mentioned in Sub-section (1). The Labour Office shall, inform the Department of Labour of such permission in case it has given permission.
(3) While doing curtailment in the production or service pursuant to Subsection (1), any worker working on shifts or on wages or §permanent worker or employee of the Enterprise except the employee shall be kept reserve on the condition of receiving half of his/her remuneration.
Provided that, such worker or employee shall continue to receive the appropriate facilities which he/she is receiving.
(4) If any worker or employee kept in reserve pursuant to Sub-section (3) refuse to work on another assignment or similar nature equal §on remuneration offered by the proprietor in the same Enterprise or another Enterprise under his/her control or if he/her does not come in the Enterprise once a day during office hours or on other situations as prescribed, the Proprietor may withheld the remuneration and facility of such worker and employee.
12. Retrenchment and reinstatement: (1) If, for any special circumstances, the production or service of the Enterprise had to be curtailed or the Enterprise has to be closed party or wholly for more than three months, the Proprietor may, with the approval of Government of Nepal through the Department of Labour, retrench in the number of the workers and employees, partly or wholly, of the Enterprise.
(1A) If the Manager makes a demand to Government of Nepal for approval in respect of the retrenchment of workers or employees pursuant to Sub-section (1), Government of Nepal shall have to make decision within two months on whether such retrenchment of employees to be made or not.
(2) While retrenching the workers or employees under Sub-section (1), engaged in similar type of works, those §permanent workers or employees who \were appointed in the last shall be retrenched first.
Provided that, if it is required to retrench some of the workers or employees appointed earlier, not following the prescribed order of retrenchment such retrenchment may be made by specifying the reasons thereof.
(3) While doing retrenchment as per Sub-section (2), it shall be done as
(a) By providing a notice with the reasons or retrenchment either one month in advance or paying the remuneration of one month in case of worker or employee who is permanent _…………… and
(b) By paying a lump sum compensation to each worker or employee of the amount of remuneration calculated by multiplying the number of each year of service performed at the Enterprise by the amount of his/her present remuneration for 30 days.
Explanation: For the purposes of this Clause, the work performed for at least six months in any year shall be counted as one year of service.
(4) The provisions of Sub-section (3) shall not applicable to any worker or employee appointed under contract service.
(5) If anybody has to be engaged in the job of worker or employee retrenched earlier, priority shall be given to the retrenched workers or employees.
Explanation: For the purposes of Section 11 and 12 the “Special Circumstance” shall mean damage, break down or failure of machines or the Enterprise and thereby causing stoppage in the production or failure in the supply of fuel, electricity, coal or similar energy or due to any kind of force majeure or insufficient supply of raw materials or stock piling of the produced goods due to loss of sale or other similar situations.
13. Seasonal Enterprise: (1) The workers or employees of a seasonal Enterprise shall not be deemed to be on reserve during off-season period.
(2) The beginning and closure of operation of seasonal Enterprise shall be informed to the Labour Office.
(3) The permanent worker of employee shall have to be paid with at least twenty five percent of his/her remuneration as retaining allowance for the period of closure of a seasonal Enterprise during off-season..
(4) The decision of the Department of Labour shall be final in relation to any dispute as to whether any Enterprise is a seasonal or not.
Explanation: While computing the period of two hundred and forty days, the public Holidays and weekly holidays shall also be counted.
15. Compulsory Retirement: The Proprietor may compulsorily retire any worker or employee who has crossed the age of fifty five years.
Provided that he/she may extend the period of service of any worker of employee by five years, in case the worker or employee is indispensable for the operation of the functions Enterprise.
CHAPTER – 3
16. Working Hours: No worker or employee shall be deployed in work for more than eight hours per day or forty eight hours per week and they shall be provided one day as weekly holiday for every week.
17. Computation of Commencement of Working Hour: The time for starting of work by worker or employee shall be as prescribed by the Proprietor.
18. Intervals for Refreshment and Rest: In any Enterprise where work may be interrupt, no worker or employee shall be deployed in work for more than five hours continuously without providing an interval of half an hour for tiffin. In any Enterprise where works have to be carried out continuously without interruption, such intervals shall be provided on rotation basis. Such interval of half an hour shall be deemed to have been included within the daily working hours.
19. Extra Wages for overtime to be Provided: (1) Where any worker or employee is engaged to work for more than eight hours in a day or forty eight hours in a week, he/she shall be paid overtime wages at the rate of one and one-half time of his/her ordinary rate of wages.
Provided that, no worker or employee shall be compelled to work overtime.
(2) While deploying any worker or employee to work overtime, generally the duration shall not exceed four hours per day and twenty hours per week.
20. Attendance Register to be Kept: Each Enterprise shall keep attendance register of its workers and employees.
CHAPTER – 4Remuneration
- 21. Minimum Remuneration Fixation Committee: (1) Government of Nepal may fix the minimum remuneration, dearness allowances and facilities of workers or employees or Enterprises on the recommendation of the Minimum Remuneration Fixation Committee and the notification on rates so fixed shall be published in the Nepal Gazette.
(2) Government of Nepal shall, in order to fix the minimum remuneration, dearness allowances and facilities, constitute a Minimum Remuneration Fixation Committee consisting of the equal number of representatives of workers or employees, Managers and Government of Nepal.
(3) While making recommendation in regard to dearness allowances and facilities of workers or employees, the Minimum Remuneration Fixation Committee constituted under Sub-section (2) may do so on the basis of geographical areas.
(4) The rates of minimum remuneration, dearness allowances and facilities fixed pursuant to Sub-section (1) shall be effective only from the date of publication of a notification to that effect in the Nepal Gazette.
(5) In cases where the Minimum Remuneration Fixation Committee could not be constituted or even if it is constituted, it could not make recommendation, nothing contained in the foregoing Sub-sections shall be deemed to have barred fixing the minimum remuneration, dearness allowances and facilities of workers and employees of Enterprises by Government of Nepal.
(6) No agreement may be entered into between the manager and workers or employees in a way to make the minimum remuneration, dearness allowances and facilities lesser than those fixed pursuant to Sub-section (1).
(7) The other functions, duties and powers of the Minimum Remuneration fixation Committee shall be as prescribed.
21A. Annual Increment in Remuneration: (1) The worker and employee appointed permanently pursuant to Sub-section (2) of Section 4 shall receive an increment in remuneration each year.
(2) The amount of increment in remuneration to be received pursuant to Sub-section (1) shall be equal to the half day’s remuneration of the concerned worker or employee.
(3) Notwithstanding anything contained in Sub-section (1) above, such increment in remuneration shall not be provided in cases where the remuneration is withheld pursuant to subsection (2) of Section 52.
22. Payment of Remuneration, Allowances and Facilities: It shall be the responsibility of the concerned Manager to provide the remuneration, allowances and facilities to be received by a worker or employee of the Enterprise.
23. Period of Remuneration: The Proprietor may fix the period of payment of remuneration to the workers or employees on weekly, fortnightly or monthly basis in way not exceeding the period of one month.
Provided that, this provision shall not apply in respect of the persons who are working on daily wages, piece-rate or contract basis.
24. Prohibition on Deduction of Remuneration: (1) The remuneration of workers or employees shall not be deducted expect under the following circumstances –
(a) In case it is required to realize any fine.
(b) In case it is required to deduct against absence;
(c) In case it is required to deduct against loss or damage of cash or kind of the Enterprise caused intentionally or negligently;
(d) In case it is required deduct in respect of providing prescribed facilities;
(e) In case it is required to deduct in respect of advance or over payment of remuneration;
(f) In case it is required to deduct in respect of the period of suspension;
(g) In case it is required to deduct under the order of government office or court’
(h) In case it is required to deduct as per the notification of Government of Nepal published in the Nepal Gazette; or
(i) In case it is required to deduct in respect of income tax or any other tax levied under prevailing laws.
(2) The limit of amount to be deducted pursuant to Sub-section (1) the method of deduction, the period of deduction and other related matters shall be as prescribed.
25. Petition to be Filed in cases a Deduction in Remuneration Made or Delay
Caused in Payment or other Facilities not provided or Delay Caused in
providing such Facilities in an Undue Manner: (1) Except in cases of happening of a mistake or failure to fix the remuneration amount or inability to pay the remuneration due to the occurrence of an unforeseen incident or of special circumstance or failure on part of the concerned worker or employee to come to receive his/her remuneration or his/her refusal to receive the same; if, in an undue manner, a deduction in remuneration is made or a delay is caused in payment or in case of release from suspension or annulment o\ f expulsion by a judgment of a court, the remuneration for the period of such expulsion or suspension is not paid or a delay is caused in such payment or the allowance, gratuity or the amount of provident fund or compensation to be received by a worker or employee is not paid or delay is caused in such payment, the concerned worker or employee him/herself or through his/her attorney may file a petition in the Labour Office.
(2) The petition as referred to in Sub-section (1) shall have to be filed within six months from the date of deduction in remuneration or causing delay in payment or non payment of allowance, gratuity, amount of provident fund or compensation or causing delay in such payment.
(3) While conducting necessary inquiry and examination on the petition filed pursuant to Sub-section (1), if it is proven that the remuneration has been deducted in an undue manner or a delay has been caused in payment or the amount of allowance, gratuity, provident fund or compensation has not been paid or a delay has been caused in such payment, the Labour Office may give order requiring to make payment of such remuneration, allowance, gratuity, amount of provident fund or compensation to the concerned worker or employee and to pay the concerned worker or employee amount upto three times of such amount in default for atonement thereof.
(4) If it is proven that the petition under Sub-section (1) has been filed with a malicious motive or with an intention of causing unnecessary trouble or distress to the Manager, the Labour Office may give order requiring the petitioner to pay not exceeding one thousand rupees for compensation to the Manager.
(5) The Labour Office shall make available to the concerned party the amount to be paid or handed over in accordance with the order issued under Subsection (3) or (4) by getting recovered and realized the same by taking all or any of the following action:-
(a) By keeping withheld the movable and immovable properties of the concerned Enterprise, worker or employee in accordance with the prevailing law
(b) By keeping withheld the deposit amount of the concerned Enterprise, worker or employee being kept in any Government Office or in any Corporate body with the ownership of Government of Nepal or the amount to be paid or handed over the concerned Enterprise, worker or employee by such Office or corporate body,
(c) By keeping withheld the import or export of the concerned Enterprise, worker or employee.
(d) By keeping withheld the discount, facilities or concessions of the concerned Enterprise, worker or employee to be obtained under the prevailing law.
26. Appeal: The party dissatisfied with the Order issued pursuant to Sub-section (3) or (4) may file an appeal to the Labour Court within thirty five days of the receipt of information of such order and the decision of the Labour Court shall be final.