United Nations
Information Centre | Nepal
Nepal- Country Report : Labour Laws, the Business Environment and Growth of Micro and Small Enterprises
PDF File Size: 6.08 MB | Download   
This study is based on a survey of micro- and small enterprises (MSEs) in Nepal and provides a better understanding of the legal and regulatory factors that can aid or inhibit growth, quality of jobs and employment creation in MSEs in Nepal. It is a part of the four country studies carried out in South Asia, covering Bangladesh, India and Sri Lanka as well. These countries broadly share the same approach towards the application of labour and labour-related laws in MSEs: generic or partial exemptions for enterprises below certain threshold sizes. The core questions of the research are as follows: (a) whether these exemption thresholds, of both labour as well as other business regulations, are associated with certain types of avoidance behaviour of firms and, if so, to what degree; (b) whether regulations without such exemptions are also associated with certain TYpes of avoidance behaviour and, if so, to what degree; (c) what are the important variables that affect such behaviour (e.g. inspection coverage); and (d) whether these findings support the perception-based rating of factors that affect the growth of MSEs.
The study first reviewed and prioritized those laws and regulations from labour and other
regulatory issues that are perceived to have high probability of becoming growth traps (e.g. incentivizing businesses to stay smaller than the set threshold or remain unregistered). Nepal’s labour laws are applicable to enterprises with ten or more employees, except universally applicable provisions like minimum wages, prohibition of child labour, and protection of children and women, and a few provisions on crèches, rest rooms, and health and medical personnel and facilities that apply to enterprises with 50, 400 and 1,000 or more workers. The labour regulations that apply to enterprises with ten or more employees which have a high probability of creating growth traps are contribution to provident fund, payment of gratuity, compensation for injury or death, and annual paid leave. Despite having the same threshold level, the Trade Union Act of 1993 allows enterprises employing less than ten workers to join a union formed in other enterprises, making the Act practically applicable to all sizes of businesses. Besides labour regulations, income tax and value added tax (VAT) in Nepal also have exemption thresholds in terms of annual earnings/turnover. Besides the original assumption of firms staying below the threshold level, several other avoidance strategies were presumed and the survey questionnaire was designed to capture them.
The survey collected data from a sample of 409 enterprises with between five to 70 employees, covering four sectors (agro processing, carpet and garments, tourism, and information technology [IT]). Given the importance of ten employees as the threshold, the survey stratified them into those employing less than ten workers and those employing ten or more workers. It asked the owner/manager of these businesses about their knowledge of, and actual compliance with, each of the labour and business regulations perceived important in Nepal, then asked for the transaction cost of compliance and, if applicable, reasons for non-compliance. For the legal requirements linked to thresholds, the survey had a different set of questions for those below the threshold level and those above it in order to precisely identify avoidance and non-compliance behaviour and the reasons behind it. The questionnaire also captured information on registration, licensing, precise
knowledge of the obligations and penalties of the labour regulations as well as the frequency of inspection, and access to incentives and informal payments.
Publisher:
Norad, ILO ,   (2014 )
Type / Script:
Progress Report in English
Keywords:
LABOUR, LABOUR LAW, LABOUR INSPECTION, HUMANITY, POVERTY, ENVIRONMENT, TAXATION, ENVIRONMENTAL STATISTICS, BUSINESS, EMPLOYEES, FORCED LABOUR, LABOUR SUPPLY, LAWS, REGULATIONS, SUSTAINABLE DEVELOPMENT, LIVELIHOOD, DISCRMINATION, LABOUR POLICY, CHILD LABOUR, EMPLOYMENT
Thematic Group:
 ILO : International Labor & Labor
Thesaurus:
01.07.00  -  General And National Law
Reference Link:
** This document has been:
678  times viewed
6  times downloaded.
Feeder: ANG1EE12 , Editor: , Auditor:

View Document History
Related Topics
Micro-Enterprises Development for Poverty Alleviation Volume II (Rural Nepal)
A 15-point declaration made by the third labor conference held in Kathmandu from 19-21 July 2012
Labour Inspection: Women Migrant Workers In ASEAN
Nepal Child Labour Report Based on Data Drawn from the Nepal Labour Force Survey -2008
From Protocol to Practice:A Bridge to Global Action on Forced Labour (The Bridge Project)2015
Labour Laws, The Business Environment And The Growth Of Micro And Small Enterprises In South Asia
Occupational Safety and Health Development in Nepal (SHIELD)
Forced Labour And ILO Protocol (P29)
From Protocol to Practice: A Bridge To Global Action On Forced Labour (The Bridge Project)
Economy Profile 2017
Integrated Programme On Fair Recruitment (FAIR)
Report on the Nepal Labour Force Survey 2008
Nepal Labour Force Survey 2008
Labour Migration for Employment - A Status Report for Nepal: 2015/2016 - 2016/2017
Advocacy For Rights And Good Corporate Governance (UNNATI-Inclusive Growth Programme In Nepal)
Executive Summary - From conflict to cooperation: Labour market reforms that can work in Nepal
Successful Strategies and Experiences in Combating Child Bonded Labour in Nepal
Sectoral Activities Programme - Working Paper 187: Informal Labour In The Construction Industry In Nepal
Forced Labour of Adults and Children in the Agriculture Sector of Nepal, ILO Country Office for Nepal- Series no. 11
Forced Labour of Adults and Children in The Agriculture Sector of Nepal - ILO Country Office for Nepal Series no. 11
Decent Work - Issue 2 (November 2014)
Report on the Nepal Labour Force Survey - 1998/99
Micro Enterprises Development for Poverty Alleviation -Volume 1
Nepal Country Objectives (1996-1999)
Terms Of Reference (ToR) Call For EOI: Develop Job Portal And Labour Market Database System
General principles & operational guidelines for fair recruitment
International Labour Migration : A rights-based approach (March 27, 2010)
The Linkage Between Women's Emloyment, Family Welfare And Child Labour in Nepal
South Aisan Project Against Debt Bondage : Findings On Debt Bondage : Baseline Study into Vulnerability To Debt Bondage In Banke District Nepal
The Kamaiya System in Nepal ( July 1998 )
Ecosystem Based Adaptation in Mountain Ecosystems in Nepal Project Completion Report
From Conflict to Cooperation: Labour market reforms that can work in Nepal
National Labour and Employment Conference 2069 : " Promoting conducive labour relations for decent work and job rich economic growth 9-11 July 2012
Bureau of Employers Activities in Nepal (ACT/EMP)
Nepal Ratifies ILO Forced Labour Convention
ILO Technical Cooperation – Child Labour (2014)
74th UN Day 2019
The ILO In Nepal
35th Anniversary ILO-Nepal Partnership
International Journal Of Labour Research: Vol. 1 Issue 2
Employment- Led Growth in Nepal
Investigating the Worst Forms of Child Labour No. 5 Nepal Bonded Labour Among Child Workers of the Kamaiya System: A Rapid Assessment
An analytical briefing on the social security sector in Nepal
The ILO in Nepal
Towards Achieving the Elimination of the Worst Forms of Child Labour as Priority (ACHIEVE)
Value Chain Analysis - Chyuri Herbal Soap
Evaluation Summaries - Sustainable Elimination of Child Bonded Labour in Nepal: Phase II
Child Labour Situation in Nepal
ILO Publications 2013
Country Paper Nepal (October 2001)
Project to Promote ILO Policy on Indigenous and Tribal Peoples
An Overview Paper on Overseas Employment in Nepal
ILO Technical Cooperation : Child Labour - Sustainable elimination of child bonded labour in Nepal (Phases I- II)
Decent Work Country Programme, Nepal (2013-2017)
Annual Household Survey 2012/13
Work in Freedom program in Nepal- Project Phase 2
Dalits and Labour in Nepal: Discrimination and Forced Labour
Labour and Social Trends in Nepal - 2010
World Day Against Child Labour ( 12 June 2015 )
Labour market trends analysis and labour migration from South Asia to Gulf Cooperation Council countries, India and Malaysia
ILO Publications Autumn 2012
Labour Markets, Institutions And Inequality: Building Just Societies In The 21st Century
स्थलगत बुलेटिन मानिसहरु अछाम र बाजुरामा आप्रबासी श्रमिकका मुद्दाको परिदृश्य
South Asia Labour Migration Governance Project
Report on the Nepal Labour Force Survey 2008
Decent Civil Works in Nepal: From Research to Action Planning (Series 8)
Nepal Labour Market Update
Profits And Poverty: The Economics Of Forced Labour
ANNUAL HOUSEHOLD SURVEY 2014/15
Celebration Of 50 Years Of The International Labour Organization’s Development Cooperation In Nepal
DOING BUSINESS-2019: Training for Reform
Thematic Working group 3 on Low skilled Labour Migration Technical Workshop on Review of Bilateral Agreements on Low Skilled Labour Migaration
Message From Mr Koïchiro Matsuura, Director-General Of UNESCO, On The Occasion Of World Day Against Child Labour - 12 June 2009
Factors Influencing Entrepreneurship Ability: A Case Study of Parbat District
Study on Demand Side of Trafficking of Children and Women in Nepal
Compassionate Care: Proceedings of Workshops
Micro Enterprises Development for Poverty Alleviation -Volume 2
Micro-Enterprises, Development for Poverty Alleviation -Volume 1
Training of Appreciative Participatory Rural Appraisal Mobilization and Gender Sensitization
ILO Approves US$500,000 Projects to Combat Child Labour
Nepal Trafficking in Girls With Special Reference to Prostitution: A Rapid Assessment
Resource Kit on Child Labour
ILO Technical Cooperation : Child Labour - Towards Achieving the Elimination of the Worst Forms of Child Labour as Priority (ACHIEVE) – Nepal (Phases I-II)(June 2014)
Investigating the Worst Forms of Child Labour No. 2 Nepal Trafficking in Girls With Special Reference to Prostitution: A Rapid Assessment
Investigating the Worst Forms of Child Labour No. 6 Nepal Situation of Child Porters: A Rapid Assessment
Migration and Child Labour Exploring Child Migrant Vulnerabilities and Those of Children Left-Behind
A Rapid Assessment: Child Labour in the Nepalese Carpet Sector
Wages In Asia And The Pacific: Dynamic But Uneven Progress
Labour Migration for Employment - A Status Report for Nepal 2013/2014
Forced Labour of Adults and Children in the Agriculture Sector of Nepal
The Dynamics of Employment, the Labour Market and the Economy in Nepal
Costs and benefits of eliminating child labour in Nepal
Decent Work Country Programme, Nepal (2013-2017)
Investigating the Structure, Magnitude and Trends of Capital Formation in and for Agriculture: Country Case Study of Nepal
The Indian Labour Market: A Gender Perspective
Global Employment Trends For Youth 2015: Scaling Up Investments In Decent Jobs For Youth
South Aisan Project Against Debt Bondage : Findings On Debt Bondage : Long-term Farm Labour Systems In Kavre Palanchok and Sarlahi Districts, Nepal
Compiled Field Reports from Dhanusha, Siraha, Saptari, Dang, Banke, Bardiya, Kailali and Kanchanpur Districts of Nepal
Overview Of Ilo Convention No.169
Analysis of Labour Market and Migration Trends in Nepal
100 result(s) found.