The pace of reform took a jolt due to the opposing positions of the International Labor Organization and donor agencies. The ILO supported labor rights while the donors favored employers´ rights to hire and fire among other things.
Moreover political interferences in labor unions has aggravated the situation as most of the political parties continue to use labor unions as a tool for serving their political interests.
It is not that there has not been any progress in the past. There were dialogues and postive outcomes too. In January 2005, trade union leaders and the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) had reached a bilateral agreement on Policy Guidelines for Labor Law Reform through Social Dialogue Process.
The agreement includes generating decent job opportunities, establishing basic humane work conditions for workers in informal sector by fixing minimum wage and providing social security, adopting ILO declaration on Fundamental Principles and Rights at work and fixing hours-based wage, among other things.
The most crucial point mentioned in the agreement was --"Framing and implementing the legal provisions for social security to commensurate with labor flexibility as those two issues are complementary to each other."
However, what is surprising is both the labor unions and employers seem not at all interested in pushing the government for framing a new labor law incorporating all the agreements.
"Both the trade unions and employers seem not interested in this process because both of them fear that existing power that they are enjoying will be curtailed in the process of formulating a new law," said Prof Dinesh Chapagain, labor law expert, who was also the consultant to the government to bring both side to the 19-point deal.
Now the question is who is losing in the absence of labor law reform? In fact the answer is both the laborers and employers. How? Labor force, which has been dead set against any flexible labor law, is feeling job insecurity due to lack of effective implementation of appointment letter system, minimum wage system compounded with increasing trend of contract outsourcing of workers in different enterprises.
The rigid labor law has prevented workers from getting better remuneration in the future as the investors are discouraged from making new investments, and the lack of investments has caused the job opportunities to shrink in the domestic job market, which sees at least 300,000 new entrants per year.
Besides, social security for them is still elusive. Even after the Maoists came into power and they head the Ministry of Labor, no initiation for reforming the labor law has been taken.
In the absence of flexible labor law, the country failed to attract foreign direct investment even after restoration of democracy and adoption of liberal economic policy. Instead, some multinationals had to pack off due to adverse business climate.
So, it is high time for employers and trade unions to press the government into formulating a new labor law, which would ensure flexibility in recruitment and social security for laborers and ultimately bring in more business opportunities in the country.
prabhakar@myrepublica.com
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