The country marked the 127th International Workers’ Day, or May Day, on Sunday as the new Labour Act awaits the Parliament’s approval.

The new Act, drafted on the basis of the Labour Act 1992 after tripartite consultations between government authorities, trade unions and industrialists, was registered in the Parliamentary secretariat around four months ago.

Except for the “no work no pay” provision, the draft Labour Act has sought to address most of the concerns of trade unions as well as industrialists.

Although the private sector, under the leadership of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), strongly demanded the “no work no pay” provision be included in the Act, it was not materialised after trade unions opposed.

The salient features of the upcoming Act includes classification of labourers into five categories, authority to employers to make layoffs under certain conditions, restrictions on keeping bonded labourers and child workers, and a provision whereby employers have to contribute 20 percent of the basic salary to social security fund, among others.

According to the section 10 of the draft, employers can hire labourers under five categories—regular, contractual, time bound, partial and emergency employee.

Labour flexibility is one of the major demand of the industrialists whereas social security is the main concern of the trade unions. The upcoming Act, upon endorsement and implementation, is likely to address both the concerns. “We have chose a middle path while drafting the Act,” said Ramjee Kunwar, senior vice-president of the Nepal Trade Union Congress (NTUC).

The new Act has authorised employers to lay off employees in the case of financial crisis, merger of two companies followed by requirement of less workers, and other situations of crisis.

Although government officials are not sure when will the new Act will be endorsed by the Parliament, they claimed labour relations have largely improved and industrial unrest has decreased significantly. They attributed the cordial labour relations to the upcoming Act.

“As the Act was drafted under tripartite consultations, the labour unions have taken ownership of the Act,” said Govinda Mani Bhurtel, joint secretary at the Labour Ministry. “Labour unrest has largely been smothered as the unions believe the endorsement of new Act will be enough to address their issues.”

Industrialists also said labour relations have been improving by the year, with the unions showing maturity. “We have worked together with unions and government officials while drafting the new Act and it has improved our relation,” said Shekhar Golchha, chairman of FNCCI’s Employers’ Council.

He said good political environment is key to good labour relations as trade unions are highly politicised in Nepal. “If there is political unrest it is transformed to labour unrest,” he said.