Once the differences are settled, the ministry will approve the draft bill and forward it to the Ministry of Law and Justice and the Ministry of Finance to seek their advice, prior to dispatching it to the Cabinet and ultimately parliament, a high-ranking official, who attended Monday´s meeting of the Central Labor Advisory Committee (CLAC), told Republica on condition of anonymity.[break]
Early endorsement of the Act - which makes it mandatory for employers to enroll every staff in of social security schemes - is considered crucial for introducing controversial labor provisions such as ´hire and fire´ and ´no work, no pay´ which many say ensures domestic labor market flexibility.
Keeping this in view, the Social Security Fund had drafted the social security bill by roping in representatives of the government, employers´ organizations and trade unions. Yet representatives of trade unions and the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), the apex employers´ organization, objected to some of the clauses in the draft bill during Monday´s meeting, according to the official.
“To nip all problematic issues at the bud, CLAC has formed an ad hoc committee comprising an official of the legal department of the labor ministry and one representative each from trade unions and FNCCI,” the official said. “This ad hoc committee will make necessary amendments to the draft bill prior to forwarding it to the labor ministry for approval.”
One of the contentious issues in the draft bill is a provision that makes it mandatory for employers to make monetary contribution to the Fund on behalf of employees even if workers remain absent from the workplace. FNCCI representative in the committee objected the clause citing it would add financial burden on employers.
“To solve the problem, the committee has asked employers to continue making contributions to the Fund on behalf of workers even if they remain absent, but later deduct the amount from their monthly salary,” the official said, adding, “representatives of trade unions have also agreed to the condition.”
The latest understanding has created a win-win situation for both employers and employees, as one of the social security schemes aims at extending compensation to workers in case they are not able to join work.
Monday´s meeting has also agreed to make it mandatory for three representatives each of employers´ organizations and trade unions to be present at every board meeting of the Fund.
The current provision in the draft bill gives permission to the 13-member board of directors of the Fund to conduct its meetings if at least 50 percent of its members, including one representative each from employers´ organizations and trade unions, are present.
The draft bill has allocated three seats for representatives of employers´ organizations and trade unions in the board, which is headed by labor secretary and comprises officials of Nepal Rastra Bank, the Ministry of Finance, the Ministry of Women, Children and Social Welfare, the Ministry of Local Development and the Insurance Board.
Monday´s meeting also agreed to introduce the social security law simultaneously with the new Labor Act, which is currently being amended. This indicates enforcement of the social security act may take time, as employers´ organizations and trade unions are yet to settle many differences regarding the new labor law.
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