The government recently revised the minimum monthly wage for industry workers to Rs 13,450. Amid improper labour situation in Nepal taken as one of the impeding factors for business growth in the country, factory owners believe that the increment in minimum wage will be crucial to foster better factory-worker relationship. However, a few trade unions affiliated with different political parties have been demanding that the government further raise the minimum wage. Sujan Dhungana and Umesh Poudel of The Himalayan Times spoke to Chandra Prasad Dhakal, chairman of Employers’ Council at Federation of Nepalese Chambers of Commerce and Industry, and Bishwonath Pyakurel, president of Joint Trade Union Coordination Centre, to know more on the current labour situation in Nepal. Excerpts:
Photo: Balkrishna Thapa Chhetri/ THT
‘New minimum wage is contextual, scientific’
– Chandra Prasad Dhakal
What is your view of the current labour situation in Nepal?
There used to be a huge gap between industries and its workers (employers and employees) in the past due to lack of proper labour policy that was suitable for both. Hence, there was a huge rift between the industry and its workers, which hampered smooth functioning of industries time and again. However, the government has recently endorsed Labour Act 2017 and Social Security Act 2017, accommodating key issues raised by both industries and workers. These policies create a win-win situation for both parties. As these policies were brought in consensus with both industries and workers, it marked an improving labour relationship in the industrial sector. Now the future of industry-worker relationship depends on how effectively these policies will be implemented. The government should bring necessary guidelines of these acts on time and emphasise on the implementation front of the aforementioned policies. Similarly, minimum wage for industrial workers has been revised recently through mutual understanding. This all shows that the industries and its workers today are functioning in cohesion, which is crucial for a better labour relationship. The minimum wage was fixed through consensus among all stakeholders. I believe that implementation of the minimum wage and available labour-related policies will not only foster improved labour relationship in the industrial sector and increase productivity, but will also foster the growth of country’s economy.
Is the new minimum wage in the industrial sector globally competitive?
The first thing we need to understand is that a majority of industry workers are paid above the minimum wage range. We should decide the competitiveness of minimum wage on the basis of the country’s economic structure. Minimum monthly wage of Rs 13,450 for industrial workers is definitely not competitive when compared to the earning of the workers in South Korea. However, the same wage figure is competitive among developing economies like Nepal and Bangladesh. It is natural human tendency for employers to try to pay less, while employees demand more. However, the minimum monthly wage fixed recently for industry workers is appropriate in the context of Nepal. As the minimum wage had been fixed through consensus among all stakeholders, it is scientific too.
Low productivity in the industrial sector has often been blamed on the lack of cordial industry-worker relationship in Nepal. As you claim the labour relationship has improved lately, can we expect the country’s industrial output to grow now?
As you mentioned, industrial productivity in Nepal is very low and one of the factors behind this was the unfavourable industry-worker relationship in the past. We certainly expect an increase in output from workers and the entire industrial sector in the coming days along with the increment in the minimum wage. Nepal’s industrial sector underwent a series of misunderstandings between the industry and its workers, which not only affected industrial output but also impeded the entire industrial growth of the country. There were instances of many industries shutting down their operation due to industry-worker conflict in the past. However, I do not think that the case is the same today. Minimum wage has been fixed through consensus, ‘no-work-no-pay’ policy has been implemented and important policies like Social Security Act and Labour Act are on the verge of implementation. All these advancements are testimonies of the fact that factory-worker relationship will enhance in Nepal in the future, fostering the growth of industrial sector and the entire economy. It is only after assuring cordial industry-labour relationship in the country that huge domestic and foreign investment can be brought in. While factories should understand that better output can be achieved only by encouraging its workers to give their best, workers should note that they will be able to enjoy better facilities only if the factory performs well. I believe that both factory owners and workers have acknowledged this fact lately. So, I expect the industrial output of the country to grow in the future.
However, some trade unions have been asking for revision in the minimum wage reasoning that it would be difficult to manage even a normal life with the minimum remuneration of Rs 13,450. What is your say on this?
As I mentioned earlier, it is human tendency to seek more and more. It is natural for employers to pay less and for employees to demand higher. However, the set minimum wage for industry workers is scientific in the context of Nepal. It has been determined through consensus among all stakeholders, including Joint Trade Union Coordination Centre (JTUCC) – the umbrella organisation of all workers in the country.
Photo: Balkrishna Thapa Chhetri/ THT
‘Minimum wage for workers is still insufficient’
– Bishwonath Pyakurel
The government recently fixed workers’ minimum monthly wage at Rs 13,450. Is it sufficient?
From the perspective of workers, the minimum wage is insufficient to sustain life, especially in the backdrop of constant inflation in the market. Earlier, Nepal Rastra Bank (NRB) had studied the market inflation and recommended that workers’ basic salary be at least Rs 22,000 per month. Similarly, various other independent reports had also recommended the minimum wage for workers at Rs 20,000 per month at least. Meanwhile, JTUCC had also conducted a research on this and suggested the government to raise workers’ minimum wages to at least Rs 24,000 per month. Comparing the current new minimum wage for workers with the recommendations of different studies, it is very low. However, it is a good payment for workers compared to what they had been getting earlier. Previously, they had been getting only Rs 9,700 per month and the new wage of Rs 13,450 per month is an increment by nearly 39 per cent. Though we had no other option than to agree with the given minimum wage with factory owners and the government, it is insufficient for workers. However, the recently introduced Labour Act and Social Security Act have focused on cooperation between factory and workers, which is a good point. Through these policies, the government has also assured different social security benefits to workers and revision of wages every two years on the basis of recommendation of a joint-minimum wages fixation committee.
Nepal Trade Union Congress had been demanding that the minimum wage for workers be set at Rs 20,000 per month. How did things get resolved at Rs 13,450 per month?
Nepal Trade Union Congress did not show any reservation in the forum of JTUCC earlier. I had also heard about some reservations during the tripartite agreement on minimum wage for workers. But nobody expressed any reservations on the minimum wage figure during the tripartite meeting and agreement.
What impact will the new minimum wage have on the industry-worker relationship?
In the past, there were so many unions of workers. We started the effort to unify all workers and unions since 2007 and form an umbrella body representing all the workers across the country. Once JTUCC was formed a year ago, we started focusing on every issue of the workers. Once we started putting joint efforts, problems related to employers and employees have been resolved significantly in recent times. At present, the working environment for the workers is good across all industrial areas and other sectors. The relation of employers and employees has also improved lately. Now we are more focused on helping the country achieve its goal of becoming prosperous. The new agreement between factory workers and owners, I believe, will be a base for the prosperity of the country.
What, according to you, should be the workplace environment for better industrial output?
There are many employer-employee differences in Nepal’s labour industry. Along with change and transformation in politics, the goal of the workers has also changed. The country’s only goal today is prosperity and I say that workers across the country are willing to support the national goal. We have already agreed not to protest and halt any works in factories. We believe that employees and employers should jointly work for economic prosperity of the country. However, we also need good working environment, equal work, equal salary, security and equality irrespective of any caste, gender and geography. Workers still face discrimination at the workplace, even in this day and age. In service sector, nurses are facing many problems related to basic salary and security. Such discrimination has to be ended soon. The government has set the target to achieve double digit economic growth in the near future and if this happens, there is no doubt that workers’ salary will also rise. Workers are directly involved in every political change that the country has been witnessing. We promise to support the government for prosperous Nepal. I suggest the government to increase the basic salary of Nepali workers in line with what Arabian nations and Malaysia pay the Nepali migrant workers. The government should also assure better working environment for the workers in any sector to stop the trend of Nepalis opting for foreign employment..
Written by Sandeep
This news first appeared on https://thehimalayantimes.com/business/new-minimum-wage-is-contextual-scientific/ under the title “‘New minimum wage is contextual, scientific’”. Bolchha Nepal is not responsible or affiliated towards the opinion expressed in this news article.
