The government has decided to lift the provision in the Foreign Employment Act that allows renewal of operating licence to only those recruiting agencies that have sent at least 100 people for overseas employment for two consecutive years.
This will be a one-time concession allowed by last week's directive of the government in view of the coronavirus pandemic, which has badly hit the country’s foreign employment sector.

“Like every other sector, the foreign employment sector was also affected due to the Covid-19 situation. They could not send workers after the government had stopped issuing labour permits. So the government has offered a one-year grace period to all recruiting agencies,” said Suman Ghimire, spokesperson for the Ministry of Labour, Employment and Social Security.
The decision, which came just two days before the end of the fiscal year 2019-20, would benefit more than 500 recruiting agencies. 

There was confusion over renewal of operating licence among many recruiting agencies after the fifth amendment to the Foreign Employment Act in March last year set the annual minimum recruitment target in order to qualify for licence renewal.
The recruiting agencies have though welcomed the relaxation of the provision, they say they want the provision repealed.

As per the latest decision, recruiting agencies will be allowed to renew their operating licence for this fiscal year.
However, when they apply for licence renewal for the fiscal year 2021-2022, they should have sent a total of 200 workers in the last two fiscal years.

Sujit Kumar Shrestha, general secretary of Nepal Association of Foreign Employment Agencies, said if the provision in the Foreign Employment Act is not repealed, many recruiting agencies will be forced to close their business next year.
He said most recruiting agencies, when they apply for licence renewal next time, will not be able to meet the minimum recruitment target of 100 because of months of Covid-19 lockdowns.   

“Recruiting agencies have invested millions of rupees in this business. We were first hit by the government decision to stop sending workers to Malaysia for 17 months. Nearly 70 percent of agencies rely on Malaysia for their business,” said Shrestha. “When Malaysia was finally open for Nepali migrant workers, the pandemic started and the government enforced the lockdown. If agencies are not allowed to renew their operating licence for failing to send a certain number of workers, then it would mean injustice to such agencies.”

Considering the concerns raised by recruiting agencies, the government in April had said it would amend the disputed provision.

The provision was brought in by Gokarna Bista-led Labour Ministry to regulate the increasing number of recruiting agencies by hiking their guarantee amount and setting up a threshold for renewal of the licence. The rule was introduced because many recruiting agencies were found either not operating actively or sending fewer than 100 workers in a year.