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Report on Role of Trade Unions in State Building

Organised by Center for Labour and Social Studies (CLASS)

28-29 April, Kathmandu

Ritu Raj Subedi

There has been unprecedented level of debate over the nature and contents of new constitution although the ongoing political crisis has cast a shadow on divergent voices to be incorporated into the main law of land. Nepalese workers that consist of around 12 million of total population are seeking their role in the current state building process and thereby, want to reflect their aspirations in the new statute. Trade unions are now engaged in constructive dialogue with concerned stakeholders to this end. To give a boost to their campaign, the Friedrich Ebert Stiftung, the German political foundation, and the Centre for Labour and Social Studies (CLASS) - Nepal, an NGO working in the areas of labour and social issues, recently (28-29 April 2010) organised a national workshop 'Role of Trade Union in the State Building' where the trade union representatives, government officials and experts extensively shared their views. The participants of the programme were composed of the people from different backgrounds ranging from the social activists, workers and media people to the beauticians.

The two-day seminar was divided into two parts - inaugural, and paper presentation and discussion sessions. The issues of social security, labour-capital relations and the contribution of trade unions in the constitution making were vigorously raised during the programme. The speakers dwelt on the workers' condition, their role, the limitation and responsibility of the state and employers, and future course the trade unions need to follow to bolster their positions. Many of them expressed their concerns over the increasing militancy trend and divisions among the trade unions.

National Planning Commission vice-chairman Dr. Jagadish Chandra Pokharel called for identifying the real stakeholders. "When I attend any programme, I am always haunted by a question as to who are the true stakeholders?"

Pokharel presented an analogue of a gambling to specify the genuine stakeholders. "In a gambling, there are three groups - the players, those who partially participate in the game by putting chankhe (bet), and finally the onlookers."

The interests of all sides are related to the outcome of the game. "The players are the real stakeholders because they are one who lose or win the game. Those who place bet are at a little risk because they will not make or lose the big amount of money. But, the onlookers are completely carefree. They have nothing to do with who win or lose the game. They finally join the winners for celebration."

Dr. Pokharel called of harmonious ties among three components of the state - the government, the business community and the civil society that also includes workers - for the smooth functioning of national economy. "The labour laws should be formulated and implemented in line with international conventions and practices," he said.

Dev Raj Dahal, head of FES Nepal, said the state needed to be strong enough to guarantee the rights of weaker and deprived segment of the society. "When the elements of violence and non-state players supersede the state, it is the poor and working class people, who become the first victim the lawlessness."

The workers constitute majority of Nepal's voters, and, thus, it is reasonable to subordinate the power of capital to sovereign people, said Dahal.

He said that the crucial priority for unions now lay in making the invisible workers publicly visible, articulating their legitimate concerns and becoming a creative partner in social dialogue for the improvement of labour market situation.

He called for investing on human resource development, launching poverty alleviation programmes and expanding production facilities for decent wage and working condition, enhancing workers access to health and education, and sharing information about labour market.

He maintained that the CA had offered an opportunity to the Nepalese trade unions to negotiate for a new social contract and co-determine public policies.

CLASS-Nepal chairman Shankar Lamichhane, focusing on the aims and overview of the event, noted that the organisers wanted to make sure that the job and social security provisions of workers be enshrined in the new constitution. "Labour movements are the movements of creativity, and need to be respected and should be properly recognised by the state."

GEFONT vice-president Bina Shrestha said that a vast chunk of workers, involved in the informal sector, were denied their basic rights while the formal sector workers, who constituted less than 10 per cent of total workforce, had no access to the services and facilities guaranteed by the existing Labour Act.

Khilanath Dahal, chairman of Nepal Labour Academy, said that the trade unions needed to be independent of the government, political parties and the employers, and shun a negative image that workers are just a group of people who only demand from the employers and do not contribute to the society.

Saran KC, regional coordinator of Trade Union Solidarity of Centre of Finland, said trade unions played an effective role in the formulation of social, economic and monetary policies in the advanced countries and this practice should be also followed in Nepal.

Erik Neilsen, LO-FTF, Council, International Consultant, South Asia Sub Regional Office, noted that the trade unions were grappling with similar challenges worldwide and the time had come for the Nepalese trade unions to work jointly to realise their common goals.

Roman Awick, Labour Law and Industrial Relations Expert Employers' Council -FNCCI, said that the trade unions and the employers should be equally flexible so as to let the national economy function smoothly.

Rajendra Kumar Acharya, UNI Regional Programme Coordinator, said that the politicisation of the trade unions had further added uncertainty to the effective implementation of the existing labour laws.

Pushkar Acharya, chairman of Girija Prasad Koirala Workers Academy, said that the Nepalese workers had a role in the nation building and should work for the restoration peace because new jobs were created only when there was peace, law and order.

Mitra Kumar Rai of Nepal Trade Union Congress said that the workers should contribute to the nation building through their effective role in production and distribution of the income.

During the first day close session, Deepak Gajurel, an assistant professor at the Tribhuvan University, and C.D. Bhatta, a programme officer at the FES, presented their working papers. Gajurel's paper 'Labour, Social Security and State in Nepal,' offered a historical background of social security system and its international practices, and status in Nepal. Bhatta's paper 'Restructuring Labour-Capital Relationship in Nepal' was highly academic and offered insights about how capital is formed in Nepal.

The participants complained that they could not grasp much from the experts' concept papers as they are in English. They asked the organisers to provide them in Nepali language.

Labour, Social Security and State in Nepal

"Social security is a public provision for the economic security and social welfare of individuals and their families, especially in the case of income losses due to unemployment, work injury, maternity, sickness, old age and death," Gajurel writes in his paper.

The social security programme was first introduced in Germany in 1880 but it has not been yet fully introduced and implemented in Nepal. The existing Labour Act and Rules have some provisions to benefit the formal sector employees and workers such as Provident Fund, gratuity, treatment expenses, salary during treatment, compensations in case of disability and death, among other. However, these provisions cover the employees of limited areas - army, police, civil servant and teacher.

"The social security programme needs to be implemented from the organised sector and trade unions should act as vital stakeholders for this," said Gajurel.

He pointed out the need of chalking out flexible legislations and their effective implementation to put a comprehensive security system in place. However, the country is lacking a viable economy to implement the security schemes suggested by Gajurel.

His paper drew both praise and criticism from the dais and floor.

Commenting on it, Dr. Amuda Shrestha said that Gajurel's paper did not mention about the methodology he applied while preparing it. "In addition, it lacks statistics to back his proposition. It keeps mum on the role of the state as to how it could implement the social security provisions for the majority of workers."

Shrestha said that there existed work-based discriminations. "No work is big or small, good or bad. We must learn to respect works of any kind. Those, who are involved in menial jobs, should not suffer from inferiority complex, which only weaken their bargaining capacity to claim decent wages and better working conditions."

Stating that positive discriminations and affirmative actions were necessary to bring the disadvantaged and deprived communities into the mainstream of development, she said that the time had come to vigorously debate on the issue of corporate social responsibility in the Nepalese context.

Participants from the floor enthusiastically joined the discussion on the issues touched and untouched by Gajurel's dissertation.

One participant said that the government collected taxes from the workers involved in the industrial sector in the name of social security but they were unknown about how the funds has been utilised.

Women involved in the cosmetic business rued that the trade unions were indifferent to their problems. "We are self-employed and run business on our own. We have to face various problems from the state agencies as we are unorganised and do not get support from the unions."

Santosh Sadha of Janakpur, said that paper could not address the social security of workers involved in the agriculture sector. "The issue of social security should not be confined only to the urban-based workers."

It is silence about the plight of domestic and migrant workers, some said. "Migrant workers have no access to the correct information as the government officials often snub them despite their immense contribution to the national economy. ILO should act as a watchdog so that their rights should not be curtailed."

Many were critical regarding the role of trade unions. "Are they just handy tool of the parties or real agents of the workers?"

Moderator Saran KC, summing up the discussion, said that there were good policies but they were not properly implemented. "Unity among the trade unions is key to achieve their social security goals."

Restructuring Labour-Capital Relationship in Nepal

In his highly scholastic dissertation, CD Bhatta said that the Nepalese state had failed to formulate the policy in the favour of working people as it came under the swing of neo-liberal agenda. "So, the trade unions and the government should work together to establish a new labour-capital relationship."

"The way the capital is formed in the country only serves the interest of a limited elitist class and a vast chuck of population have no access to it," he said.

Presenting an asymmetrical structure of CA, Bhatta said that there were only ten lawmakers representing the 90 per cent of working population while 27 lawmakers were from business community that represents just a 10 per cent of total population. "This has made the task more difficult to formulate policy in favour of workers. Therefore, the Nepalese trade unions should be vocal and intervene in the public policies to democratise the national economy in order to expand job opportunities, build their capacity and ensure their social rights."

Commenting on Bhatta's paper, Ananda Raj Khanal said that the paper offered a fresh approach on labour-capital relations in Nepal.

However, Khanal said the writer did not mention about the contribution of labour force to the national trade and economy.

"With the government's adoption of laissez-faire principle, it was the elite, who benefited most from the liberalisation policy. This has pushed the middle class into poverty and the poor into poorer, which in turn, created a fertile ground for social unrest" Khanal said.

He said there was capital flight from village to town, and then from town to abroad following the opening of the banks in the rural areas.

"Farmers are unable to get the fair price of their products. For example, a farmer sells tomato at Rs. 5 per kg in Dhalkewar of Dhanusha but the people of Kathmandu have to pay Rs. 45 per kg for the same amount of tomato. Middlemen make a heavy profit by cheating both producers and buyers," he said.

Many of the participants from the floor pointed out the need to harmonise the state's policy with that of trade unions.

Dal Bahadur Dhami of WOREC said the existing Company Act was more mercantilist and less benign to the workers.

Some said the trade unions should work for capital formation by utilising the savings of the workers. One participant said the development budget had not been fully spent although the development budget had been increased. There is a challenge to make fair distribution of profit. Referring to the special economic zone (SEZ), Deepak Dhungana said the foreign investment was considered as an important factor for economic growth but there was the risk of capital flight provided the government failed to bring appropriate laws to regulate the SEZ.

Ram Mani Adhikari suggested for setting up herbal industries in the mountainous region and providing technical training to the locals so that they could be self-employed and self-reliant. "Tariff on the items of tobacco products and alcohol should be increased and the certain amount of this revenue should be spent to create jobs."

Yuva Raj Neupane, an NGO worker, said the common agenda of workers should be identified, and increase in the extortion and unrests in the industrial sector, which had led the industries to bankruptcy must be stopped. Shankar Lamichhane viewed the hereditary skill should be utilised in the social and economic areas so as to form the capital to the benefit of workers.

Summing up the discussion, Bhatta said that there was the need of structural change and policy should be clear about the areas of economy, which could be privatised. "For the last 50 years, the power structure of the country has remained the same in the absence of democratic culture and polity. This situation has posed a question: Who did actually reap the fruit of democracy for the past several decades?"

On the second day of seminar, Umesh Upadhyaya of GEFONT and Prem Singh Bohara of NTUCI presented their working papers - 'Resolution on Trade Union Challenges in Nepal' and 'the Role of Trade Union in Constitution Building' respectively. These papers highlight the responsibility of trade unions and call for their collective action to fulfil their common agenda.

Resolution on Trade Unions' Challenges

Upadhyaya argued that those industrialists, who rose from the landlord's background, had still feudal mindset and are not positive towards the trade unions. The character of state is capital-tilted and needs to be changed into a neutral player so that it can balance between labour and capital. He stressed on expanding the labour intensive economy to generate more jobs. The negative image that the trade unions are instruments of political parties and troublemakers for the employers must be removed, he said and added that the informal sector should be massively unionised to ensure that workers have better working conditions, salary and other benefits. The formation of joint union strictures at central and local levels, minimisation of inter conflict, building public opinion, garnering support from media and international agencies, developing industrial bargaining system and educating the workers are necessary to give a new height to the labour movement and solve the challenges they are facing.

Commenting on Upadhyay's paper, trade union leader Khilanath Dahal said that there was the need of poverty alleviation programmes to lift the people living below the poverty line.

It is said that employees, working in civil services, education and banking sector, do not attend office on the excuse that they are trade union leaders. "This tendency must be stopped." Dahal suggested verifying the number of union members and documenting informal workers through a credible mechanism. "There should be equal participation of labour and capital in the major policy formulation."

Rajendra Kumar Acharya said that the trade unions are political institutions but not political parties. There is need to define the relationship between trade unions and the parties. "Now the trade unions should seek their role in the management and share in the industries when they are privatised." He argued that the political parties are internally strong and the trade unions are externally powerful because of workers' global network. In order to strengthen the negotiating power of unions, Acharya offered a SCORE formula, which literally means:

S - Socialisation and solidarity for social dialogue
C - Campaign for better wage, salary and working condition
O - Organisation
R - Research to back workers' position from fact and data
E - Education for the union members.

Keshav Bhattarai, the moderator of the session, said that modern economy is based on skill, knowledge and technology where there is no exploiter and exploited classes.

Role of Trade Unions' In Constitution Building

Bohara's working paper highlighted the history of workers' movements, its contribution to democratic revolution, the struggle and works trade unions to ensure their rights in the interim and the new constitution.

Following the restoration of loktantra in 2006, seven trade unions formed an alliance 'Joint Trade Union Co-ordination Centre (JTUCC) to bring their common agenda and put pressure on the parties to include them in the future constitution. The centre has succeeded to incorporate a13-point proposal in the preliminary and concept papers of various CA thematic committees. Some of propositions are: every individual has right to fight against any form of exploitation; no worker will be exploited on the basis of social ritual, tradition and culture; every worker has right to be organised to protect his or her individual right and welfare; no one will be forced to work against his or her will; there will be no discriminations between male and female workers in the distribution of wage for same the work, and children will not be used in factory, mine and other risky works.

"To ensure these and other rights in the new constitution, Bohara said, "the trade unions should collectively campaign and lobby with political parties, NGOs, INGOs, donors and international communities."

If the trade unions can't rise above the partisan interests and if they fail to seize this golden opportunity, the history will not pardon them, he warned.

Lawyers Dinesh Tripathi and Keshav Pandey commented on Bohara's paper.

Pandey said that constitution should be drafted on the basis of constitutional exercises and the practices of court. "There is lacking the meaningful participation of the people in the ongoing constitution making process."

Tripathi said the constitution is manifestation of the country, not a documents of a single party. "It should articulate the ambitions and aspirations of the people."

He said the constitution, as the main law of the land, should be written lucidly so that laymen could easily comprehend it. But, the elite people often try to mystify it."

The workers are major component of civil society so they should strive to codify their concerns in the new statute in line with the broader democratic framework, he said.

Both the lawyers expressed their strong reservation over the attempt of some political parties to keep judiciary under the legislature.

Moderator Meena Singh Khadka said that laymen were confused by the jargons of constitution and every people should know it to exercise his or her rights in the society.

Participants called for strong mechanism to implement the constitutional and legal provisions related to the working class. "The right of minority such as Muslim community and workers, involved in the informal economy, should be guaranteed in the new constitution," some of them said.


Like the every segment of population, workers are also trying to define their role at this critical juncture of history. The Nepalese workers are not only crucial players of the popular movements in the past. They were and are also significant contributors to the economic health of the nation. For the last sixty years, it the elite and a set of politicians who have been taking the benefits from the political changes. Now the time has come for the Nepalese workers to stake their legitimate claim. They can achieve their goal only when they meaningfully participate in nation building process. For this, they should build their unified position and bring forward their shared agenda to guarantee them in the new constitution. They must initiate social dialogue with other stakeholders of the society to oblige the state and business community to agree for a new social contract to create wealth and redistribute it fairly among the workers.

(The writer is a sub-editor of The Rising Nepal, national English daily and can be accessed at riturajsubedi@yahoo.com)

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