Nepal’s Political Factionalism Affects Labor Relations

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Infighting between and within Nepal’s political parties has spilled over into labor union negotiations. In Nepal all unions are affiliated with a political party or, in the case of the Maoist-affiliated unions, a faction of a party.

There are three Maoist factions: the dominant one controlled by party supremo Pushpa Kamal Dahal (Prachanda), a hardline faction behind Mohan Baidya, and a faction that follows Dr. Baburam Bhatterai and is more inclined to work within the “bourgeois” polity. Each of those factions has separate labor unions affiliated with it.

The various party and faction unions are battling at present over two different management-labor agreements reached in the spring. One agreement raised the minimum monthly wage from Rs 4,600 to Rs 6,100 and implemented a social security program. In return, employers got easier hiring and firing practices; a “no work, no pay” provision; and an agreement banning industrial strikes for four years.

The country’s largest unions signed on to the deal, but 10 splinter unions protested it. The protesting unions, in particular one associated with the Maoist hardline faction, say that the concessions to employers went too far. Three weeks later the splinter unions reached an agreement with the Ministry of Labour and Transport Management on a Rs 6,200 minimum wage but without the social security clause or the hiring and firing; “no work, no pay”; and anti-strike provisions.

Because of the conflict, neither agreement has been implemented yet. The splinter unions declared Tuesday that they would go on indefinite strike starting July 31st if the agreement they reached with the government was not implemented by then.

The government had published that agreement in an official gazette, which makes it a binding rule. But employers backed by the Nepal Chamber of Commerce and Industry challenged the government in court and won a stay order. The splinter unions and the Ministry then moved a higher court to have the stay vacated. That hearing is scheduled for July 31st.

The splinter unions’ threat is an attempt to force employers to yield prior to the court’s decision. That reflects both their frustration at waiting for 100 days to receive increased salaries and also their concern that the courts may uphold the first agreement.

Employers also want a prompt resolution and have offered to settle the disagreement in the government’s Labour Coordination Council. Labor unrest has cost employers, and manufacturers in particular, substantial lost production time over the last year. The splinter unions are hoping that employers’ unwillingness to endure yet another protracted shut-down will tip the balance in their favor.