The tea workers in eastern part of Nepal locked up tea gardens demanding pay increase and other facilities. Similarly, labor disputes in Hotel Fishtail in Pokhara was settled after the management side accepted the demand of labor unions.


These two labor unrests have shown that Nepal’s industrial sector is prone to unrest and nobody can predict the situation. Many thought the tripartite agreement between industrialists, trade unions and the government would end the incidents like these lock ups for a few months. The hope were dashed in less than two weeks.


Although the Fishtail Hotel resumed its operation, the lockup of the hotel showed that no one can be safe from labor unrest. Tea garden management is yet to negotiate with the labors. The cost of labor unrest has already run into millions of rupees in tea gardens. However, it has not made any difference to protestors.

Wherever one sees, Nepal’s labor union has one basic character. Backed by political parties, Nepal’s trade union leaders know how to lock up the establishment in protests.  It seems that Nepal’s modern trade union leaders still follow the modality of Nepal’s two pioneer  labor leaders Congress leader late Girija Prasad Koirala and communist leader late Man Mohan Adhikary, who  led the protests in 1949 in Biratnagar Jute Mill. The two leaders launched the agitation by locking up the industry.

Despite providing several trainings, experience sharing interactions and field visits to different countries, Nepal’s labor leaders, often use the harsh method of protest instead of going for negotiations for different stages.

Although the labor movement has seen drastic change in the global level with traditional definitions faded out, Nepal’s labor movement is still divided in orthodox model of labor and owner or feudal and worker. They still champion politically driven slogans. Thus, labor often uses violent protest to press the owners. Instead of harmonized negotiations, physical power is the rule for them.

“This is our compulsion. Had industrialists increased the salary as agreed by them, nobody needs to go to strike. It is not the labor but industrialists are responsible for the present state,” said Saligram Jammar Kattel, former president of Maoist affiliated Nepal Trade Union Federation (Revolutionary).

After locking up industries for a week at the end of March and first week of April for about 11 days, labor unions agreed to return to work and open industries. The controversial tripartite agreement reportedly signed between the government, industrialists and labor unions is already in trouble. Newly elected president FNCCI Suraj Vaidya has called for renegotiations on the agreement.

Division in Trade Unions
Nepal’s trade union organizations are also divided on the basis of ideology of country’s major political parties.  Some trade unions split on the basis of party’s factional politics. There are three major trade unions belonging to three major political parties, Nepali Congress, CPN-UML and UCPN-Maoist. Similarly, regional Madhesh based three political parties have their own trade unions. Each trade union is divided on the basis of party’s internal factions.

For instance, All Nepal Trade Union Federation, a UCPN-Maoist affiliated organization, has three factions close to three leaders, Prachanda, Kiran Vaidya and Dr. Baburam Bhattarai. Nepal Trade Union Congress, affiliated to Nepali Congress, is also faction ridden. CPN-UML affiliated trade union and trade unions affiliated to Madheshi parties too are faction ridden.

This is the reason every agreement lands in controversies and disputes. For instance, the agreement signed by Saligram Jammar Kattel led trade union of UCPN-Maoist was rejected by other faction led by Kiran Vaidya creating more problems.

No trade union movement may have divisions and splits like Nepal’s trade unions but they too have some unique characters in agreeing whenever they call a strike and go to lock up the industry. There are about dozens of trade union movements and all of them have their own strategies and demands.

FNCCI’s newly elected president Suraj Vaidya also holds the view that his team’s priority will be to take the issue of labors. As a former head of labor cells of FNCCI, newly elected president Vaidya knows the crux.

“There are two major problems that need urgent action -- labor problem and power crisis. FNCCI is already in dialogue with major trade unions and has forged understandings with the leading unions. But I believe short term remedies will not address our concerns. I will try to find a long term solution. Hence, I will press the government to revise existing labor law and try to seek support of trade unions for the same. Creating jobs and raising income opportunities by enhancing labor productivity are my top priorities. I will also put emphasis on raising skills of outbound Nepali workers,” said Vaidya.

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has urged leaders of major political parties, including the UCPN (Maoist), to maintain unity among their trade unions to ensure smooth industrial operations.

The Maoist-affiliated trade union factions led by Badri Bajgain (close to Maoist Senior Vice-chairman Mohan Baidhya) and Lal Dhowj Nemwang (close to another Vice-chairman Dr Baburam Bhattarai) have been supporting the indefinite shutdown of 500 industries called by Madhesi trade unions in the Sunsari-Morang Industrial Corridor from Friday.

Nepal’s organized labor force is not too large but one cannot ignore their presence also. Major political parties are backing the trade unions because there is money as well as voters. According to International Labor Organization, out of a total labor force of 11,111,000, agriculture employed 76 percent, service 18 and industry mere 6. According to an estimate, about 600,000 workers are employed in industrial sector, and 2 million in service sector.

Full of Holidays
Nepal’s industrial output is gradually declining due to growing number of holidays. The power cut of over 14 hours is a pressure on industries and a growing number of public holidays are another concern. Similarly, the strikes and lockups cut the working days.

Out of 365 days, there are more than 80 public holidays including 52 Saturdays. The formal sector employee gets another 54 days leave, including sick leave. There used to be about dozens of strikes. Nepal’s industries are operating by fewer than 100 days a year.

In such a scenario, the industrialists say they are not in a position to increase incentives to their employees. Here begins the unrest. Whether there is money or no money, laborers want hike in salary.

“My point is that if the unions want industrialists to double the minimum wage (instead of simply adjusting existing wage with inflation), they should also guarantee that labor productivity would also double. Else, why double the wages when the industrial sector is losing competitiveness and is in a downturn?,” writes Chandan Sapkota, a researcher at SAWTEE, in his article in Republica.

The recent agitation came to an end following signing of 11 point pact between the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), the Confederation of Nepalese Industries (CNI) and the agitating trade unions.  Under the pact, employers agreed to raise the remuneration of workers, besides committing themselves to social security for the workers.

The trade unions also committed themselves to increasing worker productivity for the betterment of the business enterprises. The three major trade unions in the country -- Maoist-affiliated All Nepal Trade Union Federation (ANTUF), UML-affiliated General Federation of Nepalese Trade Unions (GEFONT) and the NC-affiliated Nepal Trade Union Congress (NTUC) staged the protest demanding a pay hike. Salikram Jammar Kattel, president of ANTUF, expressed his organization´s commitment to extending full cooperation for implementing the agreement. "We have called off all programs of agitation in the industrial estates. We will abide by the spirit of the agreement," he said.

With the fresh agreement, workers´ basic remuneration and dearness allowance will be raised by Rs 50 and Rs 1,450 respectively per month. This has increased the minimum remuneration to Rs 6,100 a month, from Rs 4,600.

Employers and workers have also agreed to contribute 20 percent and 11 percent of their respective basic remunerations for implementing different social security schemes for workers.

A bilateral permanent mechanism comprising representatives of the Employers´ Council of FNCCI and the trade unions will be set up at central as well as district levels to foster industrial harmony and create a favorable production environment.

Similarly, the workers have committed themselves to fully cooperate with the employers to increase industrial productivity, which has been eroded due to long-running labor unrest. They have also agreed not to take part in any political activities during working hours.

The three trade unions are all set to go for further protest, if the demands are not fulfilled.

As long as Nepal’s trade unions are guided by politics, one cannot see any modesty and modality in negotiations. Violent protests and lock ups will be used for a long time to come when the labourers press the industrialists to agree to their demands, thereby discouraging investment in the country.

Full of Holidays
Nepal’s industrial output is gradually declining due to growing number of holidays. The power cut of over 14 hours is a pressure on industries and a growing number of public holidays are another concern. Similarly, the strikes and lockups cut the working days.

Out of 365 days, there are more than 80 public holidays including 52 Saturdays. The formal sector employee gets another 54 days leave, including sick leave. There used to be about dozens of strikes. Nepal’s industries are operating by fewer than 100 days a year.

In such a scenario, the industrialists say they are not in a position to increase incentives to their employees. Here begins the unrest. Whether there is money or no money, laborers want hike in salary.

“My point is that if the unions want industrialists to double the minimum wage (instead of simply adjusting existing wage with inflation), they should also guarantee that labor productivity would also double. Else, why double the wages when the industrial sector is losing competitiveness and is in a downturn?,” writes Chandan Sapkota, a researcher at SAWTEE, in his article in Republica.

The recent agitation came to an end following signing of 11 point pact between the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), the Confederation of Nepalese Industries (CNI) and the agitating trade unions.  Under the pact, employers agreed to raise the remuneration of workers, besides committing themselves to social security for the workers.

The trade unions also committed themselves to increasing worker productivity for the betterment of the business enterprises. The three major trade unions in the country -- Maoist-affiliated All Nepal Trade Union Federation (ANTUF), UML-affiliated General Federation of Nepalese Trade Unions (GEFONT) and the NC-affiliated Nepal Trade Union Congress (NTUC) staged the protest demanding a pay hike. Salikram Jammar Kattel, president of ANTUF, expressed his organization´s commitment to extending full cooperation for implementing the agreement. "We have called off all programs of agitation in the industrial estates. We will abide by the spirit of the agreement," he said.

With the fresh agreement, workers´ basic remuneration and dearness allowance will be raised by Rs 50 and Rs 1,450 respectively per month. This has increased the minimum remuneration to Rs 6,100 a month, from Rs 4,600.

Employers and workers have also agreed to contribute 20 percent and 11 percent of their respective basic remunerations for implementing different social security schemes for workers.

A bilateral permanent mechanism comprising representatives of the Employers´ Council of FNCCI and the trade unions will be set up at central as well as district levels to foster industrial harmony and create a favorable production environment.

Similarly, the workers have committed themselves to fully cooperate with the employers to increase industrial productivity, which has been eroded due to long-running labor unrest. They have also agreed not to take part in any political activities during working hours.

The three trade unions are all set to go for further protest, if the demands are not fulfilled.

As long as Nepal’s trade unions are guided by politics, one cannot see any modesty and modality in negotiations. Violent protests and lock ups will be used for a long time to come when the labourers press the industrialists to agree to their demands, thereby discouraging investment in the country.