Nepal marked the 129th International Workers’ Day, also known as May Day, on Tuesday amid improved employer-employee relations which have existed in the industrial sector for the last few years.

The cordial ties have also been productive for the country’s economy, private sector leaders said. Industrial unrest has declined significantly. Manufacturing and services output declined sharply after 2006, largely as a result of political unrest and a poor business environment in the country.

Many hotels and industries were forced to shut down due to strikes or lockouts during that period. Both companies and trade unions agree that labour relations have improved remarkably over the last few years. In 2017, the country achieved a 23-year-high economic growth rate of 7.39 percent.

Among a number of factors contributing to the growth, one is an improved law and order situation due to a sharp decline in protests, particularly in the industrial sector. The enactment of the Labour Act 2017 and politically influenced trade unions losing power in privately-run enterprises has made employer-employee relations more cordial, they said.

The new labour act talks about enforcing a ‘no work, no pay’ provision. It also envisions revising workers’ wages every two years.

Likewise, employees will not be paid when no work is done, and employers cannot terminate workers at their discretion.

Besides, workers will be entitled to receive their benefits from the day they are hired. These provisions have been instrumental in enhancing management-labour ties.

Chandra Dhakal, chairman of the Employers Council at the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), said disputes between employers and employees had gone down significantly in the recent days. “This is due to the endorsement of the Labour Act and Social Security Act. These laws have helped to categorize workers and determine the facilities they are entitled to receive accordingly,” he said.

The Labour Act has stipulated five types of employment based on the nature of the task performed by workers. They include regular employment, assignment based employment, time specific employment, ad hoc employment and part-time employment. If labourers work overtime, they are entitled to get paid time and a half for the extra hours, which means they get 1.5 times the regular hourly rate.

The government drafted the act in consultation with workers. “The new act has not only resolved problems between management and labour, it has made employees realize their responsibility towards their work,” he said. “They now think many times before making demands.”

FNCCI Senior Vice-President Shekhar Golchha said there had been improved relations between employers and employees. “Today, both workers and the concerned trade unions are quite mature and understand the fact that good relations will yield mutual benefits.” In addition, employers have also realized the necessity of the contribution of workers for the prosperity of their businesses, Golchha added.

Golchha, however, expressed dissatisfaction at the delay in the formulation of regulations according to the Labour Act. “Due to this delay, provisions in the act are yet to be enforced.”

Binaya Upadhyay, a member of the Employers’ Council of the FNCCI, said they were receiving good cooperation from trade unions. “Nowadays, workers do not stop work when they present their demands to their employers,” Upadhyay said.