Several hundred recruiting agencies that hire and supply Nepali workers overseas have survived the prospect of losing their operating licences for failing to send a stipulated number of workers.

Recruiting agencies will be able to renew their licences and run their business in the fiscal year 2021-22 after the government allowed them one-time relaxation. The Cabinet meeting on Monday paved the way for licence renewal of recruiting agencies that could not supply at least 100 workers in each of the last two fiscal years—2019-20 and 2020-21.

The Cabinet meeting asked the line agency concerned, which is the Department of Foreign Employment, to renew their licences even if they could not meet the requirement of sending the minimum number of workers.

As per the existing provision under the Foreign Employment Act, 2007, recruiting agencies must send at least 100 workers for foreign employment every year for two consecutive years to secure licence renewal. Unable to do so will result in the scrapping of their operating licence.

According to Kamal Tamang, acting president of Nepal Association of Foreign Employment Agencies, as many as 732 agencies could not meet the minimum supply threshold and faced the threat of losing their licence.

“The government decision has come as a respite for more than 700 such agencies, which is a big number. Only 123 agencies had managed to supply the minimum 100 workers in each of the last two fiscal years,” Tamang told the Post. “Now, all the agencies will be able to operate in the upcoming fiscal year.”

The association is a grouping of 855 recruiting agencies that supply workers to various labour destinations.

As the date for licence renewal was coming closer with the end of the fiscal year 2020-21, a majority of recruiting agencies feared losing their licences as they had not been able to send the required number of workers.

The association, which had long been calling for scrapping of the rule, had once again reached out to the government agencies, requesting them to make arrangements for licence renewal as they could not achieve the worker supply threshold due to various challenges, mainly the Covid-19 pandemic.

“Recruiting agencies could not even open their offices for several months, let alone send workers abroad. Since March, the business has been on an all-time low—first because of the first wave of the Covid-19 pandemic and then the current second wave,” said Tamang.

The Covid-19 pandemic had hit the foreign employment sector hard.

As Nepal and labour destination countries sealed their borders by imposing various restrictions to contain the spread of the coronavirus, Nepalis could not take up jobs abroad, rendering losses for foreign employment agencies.

The study, ‘Rapid assessment of the impact of Covid-19 on private recruitment agencies in Nepal,’ conducted by the International Labour Organisation (ILO), Nepal, found that these agencies suffered the impact of the pandemic on various aspects of their business operations, such as recruitment, deployment, and the decline of labour demand from destination countries.

Affected by the first wave of the pandemic, they had reached out to the government for repealing the provision last fiscal year.

As part of giving relief to the foreign employment sector, the government had allowed their licence renewal just before the end of the fiscal year, provided they send 200 workers combined in two fiscal years if they could not meet the threshold of 100 workers each in two consecutive years.

However, the recruiting agencies, which call the provision ‘discriminatory’, demand that the rule should be scrapped forever.

“We still demand that this provision should be scrapped forever. If the agencies want to conduct their business by depositing millions of rupees and paying taxes, then the government should not create such obstacles,” said Tamang. “We have just faced the first and second waves of the pandemic, and it remains uncertain how long the pandemic will stay or when the business will bounce back. Removing this rule is a long-term solution.”