Labor Market: Demand for and Supply of Labor

Labor market

   Usually informal markets where workers find paying work, employers find willing workers, and where wage rates are determined. Labor markets may be local or national (even international) in their scope and are made up of smaller, interacting labor markets for different qualifications, skills, and geographical locations. They depend on exchange of information between employers and job seekers about wage rates, conditions of employment, level of competition, and job location.

 

Labour market and Trade Union movement

Population of Nepal is growing rapidly (more than 2 percent per annum) since 1970s and there is no sign of improvement in near future. Out of the total population about 86 percent is still living in rural areas. The population density is 157 per sq. Km. in 2001 and average family size is 5.44. The census record shows that a working age Nepalese have to support another one non-working age person because of high dependency ratio. The life expectancy is 61.8 years for male and 62.2 years for female in (CBS, 2003(I)).

 

Labour force size in Nepal is increasing rapidly (more than 300, 000) every year mainly due to high population growth caused by high fertility rate and declining mortality. But the employment opportunity is very limited. Labour force size and employment situation of Nepal reflects a backward character of the society. The employment scenario is indicative of very small formal sector (about 10%) surrounded by the large informal economy covering overwhelming majority of workers. Shortage of skilled manpower on the one hand and large number of manpower of different skilled categories including highly professionals are migrating outside from the country to search better employment on the other is a salient feature of the Nepalese labour market. Similarly, heavy underemployment and serious unemployment contributes to increase surplus labour. The population census 2001 highlights that proportion of economically active population is significantly high for males compared to the female (81% for male and 60% for female among the population aged 15 years and above). Likewise underemployment rate is high for females than males.

Foreign employment was one of the major sector of employment to adjust the surplus labour (basically unskilled) of the country where large number of the Nepalese labour force were involved as migrant workers in different parts of the world. But because of the global financial crisis appears to be a potential threat to Nepali labour market. In this regard large number of Nepalese labour force displaced from their job and the process is continuing till date though the volume is not vulnerable. If the situation further worsen there will be a crisis of employment in Nepal.

Another important feature of Nepalese labour market is heavy influx of guest workers particularly from India because of open border, no visa needed and similar tradition and culture. It is very hard to estimate exact number of Indian migrants working in Nepal but densely covers manufacturing industries to every informal sectors of work. Likewise about 100,000 Bhutanese refugees located in Eastern Nepal since 1990, is another notable features of Nepalese labour market.

The NLFS also proves that agriculture is predominant sector of employment for Nepali labour force. Outside agriculture sector, informal sector is the largest source of employment. It is important to note that female work force is more involved in the informal sectors of work including agriculture. It is 87 percent compared with the 67 percent of male. Apart from the economic activities, female work force is basically loaded with different domestic work such as cooking, cleaning, and child rearing which is still considered as non-economic activities.  The wage rate in the country is far below than the neighbouring countries where female are receiving further low wage/salary despite legal provision of equal pay for equal work.

 

Nepal has semi-feudal social structure. It has resulted various superstitious beliefs among the people. It has too, encouraged to exploit workers in general and especially women in the name of tradition, religion, cultures, customs and the values. It is one of the reason of ill practices against women prevail in Nepalese labour market.

 

Non implementation of minimum wage, no fixed working hours, additional work without pay, no social security and job insecurity, no employment guarantee, exploitation from labour contractors, exploitative and hazardous work condition, problems of night work, poor situation of maternity leaves and day-care centre, sexual harassment and sexual abuses both at workplace and community, family disorder due to migration, rampant use of child labour, early marriage among the working children, wage discrimination between man and women are the problems faced by the Nepali labour market.

The political and economic contexts in Nepal continued to be remained uncertain which has impacted on the labour market such as industries have been threatened by regular strikes (bandh) which resulted into shut down of enterprises leaving thousands of workers without a job. Also the energy crisis in Nepal has been the major impediment for the industries and enterprises. For example, the tourism sector has been most affected as most of the tourists have either shortened or cancelled their visit to Nepal because of very less hour’s electricity available in hotels (The Himalayan Times, 3 January 2009).

 

Since few years Nepalese investors seems to be reluctant to invest mainly because of fluid political situation on the one hand and aggressiveness of ANFTA the Maoist Party affiliated trade union on the other has directly impacted to employment situation in the country. Moreover, government of Nepal has no explicit policy to attract foreign investors.

 

Lock-outs, retrenchments, lay-offs, pay-offs, closure and compulsory leaves have created a situation of more and more loss of employment to the workers. In the present situation of Nepal, the labour law appears to be not in enforcement as the essential services have also been affected by everyday riots in the country.

 

Trade union movement in Nepal has crossed six decades (from 1947) passing through various ups and downs and most of the time the movement was banned. The ban was lifted only after the restoration of multiparty democracy in 1990. Trade unions have grown rapidly after the enactment of Trade Union Act in 1992. During a decade after the legalisation of trade union movement, Nepalese trade unions have acquired a lot of achievements but still the movement is very weak due to various problems associated to it. Rate of unionisation is increasing gradually despite the declining trend in developed countries. This is mainly due to growing unionisation of informal sector workers. Still the overall unionisation rate of Nepal is about 10 percent of the total gainful employment. Registration of enterprise level unions as well as national federations has increased remarkably but the membership could not grow with the same pace as the growth of the unions. Consequently, per union membership has declined day by day. Increasing pressure of foreign migrant workers including Indians and Bhutanese who are deprived from right to organise in trade union, informalisation of formal sector and restriction to white-collar workers from joining trade union are the additional reasons of low unionization rate in the country.

 

Nepalese trade union movement remains fragmented since its very beginning mainly because of political ideology and sometimes due to personal conflict. The present scenario of all the trade unions is that they are directly associated with one or the other political parties though most of them plead themselves as independent. In Nepal, only few unions are actively performing their activities in favour of workers while others are like paper unions. Among them GEFONT is the leading trade union organization working for the rights and welfare of the workers.

 

As the relation between employers and workers is improving gradually from confrontation to dialogue and they started to recognise each other as a social partner. Hope, this will further improve in the future. Similarly, they have also strongly realised the negative effect of fragmentation on trade union movement and they are going in the process of unity in workers issues through joint work changing their traditional attitude of competition and confrontation to friendly relation.

 

Trade unions in the past were concentrated only for protection and promotion of their own class but now they changed their role and started to think that their goal will not solve without the development of the establishment on the one hand and national development on the other.

Led by Nepal Government Employees Organisation (NEGEO) in association with other partners, unions pressed to the interim legislature parliament to introduce law granting union rights to all government employees, which resulted into acceptance of union rights up to section officer level. It is one of the breakthroughs and victory to the workers; if we compare to other south Asian countries Nepal is alone to accept trade union rights in this manner. However, there are some short-comings and lacunas inherited.

Similarly, media workers also mobilised themselves. Striking from Nepal 1 TV, they moved forward to get trade union rights and spread to most of the print and electronic Medias. At the end, it is concluded with adoption of Working Journalist Act, which ultimately recognised right to form union & collectively bargain and addressed problem of outsourced Media workers limiting number of irregular workers in contractual basis.

The security sector also lined-up in this move - quickly organising security guards working in one of the multi-nationals G4 Securitas facing much harassment in initial stage. However, G4 made CBA, recognising unions in the company later on, which sparked fashion of unionisation in most of the security companies.

Private and Boarding schools used to deny union rights to teachers & employees, which had been crushed by the move and officially various groupings were recognised as the unions in this sector.

 

Nevertheless, some reform measures for reforming democratic labour market have been initiated by the government of Nepal with the technical support of International Labour Organisation (ILO). Trade union organisations and employers' organisations have been the key players in the process. Central Labour Advisory Board has constituted a taskforce to carry out all exercises. The taskforce is comprised of 2 representatives from each 5 trade union centres, the employers' organisation and the government representatives. A technical team has been formed to deal with labour legislation reform.

Interim Constitution 2007 of Nepal has made a provision of National Labour Commission (NLC) and an exercise has been started to form such this commission.  This commission will be- a quasi-judiciary in nature, all powerful- currently statutory but aiming to transform it into constitutional in status. This commission will resume all rights related to interest as well as right dispute dealt by Labour office now a day and also exercise all rights currently enjoyed by Labour Court. The Commission will be independent and impartial formed by tripartite consensus.

On the one hand there are numbers of labour related laws and by laws which are insufficient to address entire labour market in the present context of Nepal on the other hand implementation of these laws is very weak. An initiative has been taken to reform laws under one "umbrella act" concept. Attempts have been made to cover both organised and unorganised sectors, both formal and informal economy, all investment under private-public- joint venture and national and trans-national.

The whole exercise is concentrated on to promote decent work agenda in Nepali labour market. It has categorised exercise in 4 broad titles:

o   Creation of Labour Commission as of Industrial Commission

o   Amendment of Existing Labour Legislation

o   Introducing new Social Security Act

o   Reform in existing Labour Administration

All the policy and legislation reform process has strengthened the networks and solidarity between the trade unions that resulted in to the formation of Joint Trade Union Coordination Centre (JTUCC). Also it has helped in developing the culture of working together for common causes.

 

GEFONT has taken a lead role to build consolidated trade union movement in Nepal bringing other trade unions such as NTUC-I  in common platform. A joint Board has been in operation between GEFONT and NTUC-I in order to bridge policy gaps particularly between two national centres aiming to create a single union centre which would be value-based democratic and inclusive. The joint board has also played an important role in forming the JTUCC. JTUCC is a platform of major trade unions confederation having different political inclinations which includes, Nepal Trade Union Congress-Independent, General Federation of Nepali Trade Union, All Nepal Federation of Trade Union, Confederation of Nepali Professionals, Nepal Trade Union Federation, All Nepal Trade Union Congress, and Nepal Progressive Trade Union Federation. Currently the total union members affiliated with various trade union organisations estimated around 1135 thousand which is about 10 percent of the total employed labour force.
 

Among these major trade unions, All Nepal Federation of Trade Union (ANFTU) is new and emerging actor, associated with the Maoist Party, in the trade union movement. Although ANFTU has been successful in occupying spaces in labour union in Nepal in short span of time, it often takes an aggressive approach in defending the rights of its members which result into a violent conflict with other the member of other trade unions. It also may affect the joint trade union movement in Nepal. ANFTU placed a strategy for expansion of its organisational base using "fear-psychology". However, spontaneous strike and sudden action didn't limit only with ANFTU work. Short-cut path to fulfil demand became desirable for all political/social groupings to press the government and the employers.

 

The political crisis in Nepal has left the country near economic collapse with most severe consequences for the population and the labour market. The tourism sector – one of Nepal’s major incomes – is severely hit, capital is fleeing from the country, new investments are not coming and then the added burden of fighting the Maoists via the expensive military apparatus.

 

After the declaration of the state of emergency in November 2001, the law and order situation of the country has sharply deteriorated causing the shut down of industries and business and, consequently, accelerating the process of job layoffs. Many factories especially within the carpet, clothing and textile sectors are in a very critical situation or have already been shut down, thus, throwing thousands of workers into unemployment. This process has also badly affected enterprise level trade unions.

 

 

Despite various ups and downs in the political situation of the country during this decade there has been an improvement in the cooperation between the various national trade union centres, employers and government.

Now the Nepalese trade union movement covers formal and informal sectors, organised and unorganised, national to multi-national companies which sometimes consider or treat outside the arena of trade union rights of the workers. Further, in the labour market women often experience that their rights are not respected, they are not offered the same opportunities and wage while performing equally of men. Women often compel to dwell in the hardest hit and lowest paid jobs. They are often subject to sexual harassment and violence. The present economic crisis also has hit women very hard compared to men.

Low pay, unsafe working condition, lack of social security, day care center, maternity protection so and so forth can be listed out as other problems being confronted by working women. It is to be noted that various laws formulated even after popular movement of 1990 has not implemented effectively.