Quality of Work Life in Nepalese Organisations: Challenges for the 21St Century

Labour Legislation and Quality of Work Life in Nepal

Dev Raj Adhikari

Central Department of Management, Kirtipur Tribhuvan University, Kathmandu, Nepal. E-mail: [email protected]

Abstract

The main objective of this paper is to examine the role of state to enhance quality of work life (QWL) in manufacturing enterprises. QWL is related with perception of the workforce that they are safe, relatively well satisfied and able to grow and develop as human beings. Labour legislation of a country plays a key role to develop such perception. The government can contribute to enhance QWL by making QWL-related provisions in labour legislation. If enterprises if honestly follow these provisions of labour legislation it can contribute greatly to enhance QWL.

Currently, the main legislation enforcing QWL in enterprises includes:

 The Constitution of Nepal 1990: It aims to protect rights of working people, minors and economically backward people. According to the Nepalese Constitution no minor shall be employed in work in any factory or mine, or be engaged in any other hazardous work. The role of State is to pursue a policy of increasing the participation of the labour force. It contains altogether 23 Parts, 133 Articles and 3 Schedules in the Constitution.

 Labour Act 1992: The Act guarantees rights, interests, facilities and safety of workers and employees engaged in different organisations of various sectors. It contains 11 Chapters and 92 Sections.

 Child Labour (Prohibition and Regulation) Act 2000: The Act aims to prohibit engagement of child in factory, mining and similar other risky work and to make necessary provision for child's health, safety and services and facilities while engaging them in other work. It contains 5 Chapters and 32 Section.

 Trade Union Act 1993: The Act prescribes legal provisions regarding registration, operation of trade union and other necessary provisions for the protection and

Dev Raj Adhikari 167 Labour Legislation and Quality of Work Life in Nepal

promotion of professional and occupational rights of the workers of enterprises. It comprises 5 Chapters and 31 Sections.

Regarding QWL in Nepalese industries, previous studies show that the overall consensus among the workers was that QWL dimensions were unsatisfactory particularly in manufacturing industries. Some of the features of QWL were: a) less difficult jobs to perform; b) job failed to fulfil basic needs of workforce c) people were not willing to left their given jobs in spite of being low paid and minimum amount of benefits d) prevailing level of pay was the most dissatisfying factors on the job for all workers; and e) a substantial number of organisations were not following labour legislation properly.

In order to explore the situation of labour legislation and QWL this paper examines the following: a) brief introduction about Nepal b) history of manufacturing industries c) concept, performance outcomes and responsibilities of improving QWL d) regulative measures to be taken by government and e) summary and conclusion.

Nepal: A Brief Introduction

Nepal is located in the Himalayas between India and Tibet (China). About 90 per cent of the people live in rural areas of which many are accessible only on foot. The population of 24 million is further divided into eighteen ethnic groups and traditionally four castes. When measured by GNP per person, Nepal is the ninth poorest country in the World. It has the highest fertility (5.3 per cent) and mortality rate (91 per thousand) in South Asia. Nearly 42 percent of the population is under the poverty line and about 70 percent illiterate. Poverty and population growth of 2.6 per cent per annum are serious obstacles for the development of the country (The World Bank, 1998). The human resource development index is 0.490, which is 142nd among the 173 countries in the world and is slightly above that of Bangladesh in the SAARC region (Human Development Report, 2002). The Gross Domestic Product (GDP) is recorded around a 2 percent due to lower growth rate in agricultural and non-agricultural sectors (HMG/N, 2002).

Brief History of Manufacturing Industries

The effort for the establishment of modern manufacturing industries in Nepal is started after WW I. Promulgation of the Company Act 1936 initiated the establishment of few manufacturing industries in Nepal. Some of the manufacturing industries established were jute industries, cotton textiles, cigarettes factories, saw mills, rice and oil in the bordering towns of India.

The establishment of modern Industrial ventures began during II WW period. Though the then Rana regime did pay some attention to creation of an industrial base, there was a lack of

168 Dev Raj Adhikari Labour Legislation and Quality of Work Life in Nepal

continuity and proper strategic approach. However, a substantial number of industries were established in the last decade of Rana regime. It is worth mentioning that the Nepalese economy at that time was largely an expansion of Indian industrial capitalism.

Since 1956, Nepal had initiated the planned way of industrial development. Influenced from Goss plan of Soviet Union the history of centralized plan has began. The Industrial Policy 1957 formulated and emphasis was given in the self-reliance in the production of basic manufactured goods. It was in 1962 that another Industrial Policy was formed to motivate industrialists to establish a number of manufacturing industries in the country. This policy later revised in 1965 and again in 1967 to encourage industrial growth in the country. This was also the time of the Third Plan (1965-1970) during which priority was given for the establishment of import substituting and export promoting industries. Most of the public enterprises were set up in the 1960s and 1970s funded by foreign assistance to play a catalytic role in the promotion of economic growth. Pubic sector manufacturing industries were established as instrument to: a) create an industrial base in the country, b) enhance domestic production, c) substitute imports, d) generate employment opportunities, and e) contribute to national treasury. The largest numbers of pubic enterprises were in the manufacturing sector (29), where 9 were in trading, 8 were in service, 7 were in social, 3 were in public utility and 8 in financial sector. The number of workers employed in pubic enterprises was about 150 thousands.

In 1974, the government brought a new industrial policy, which had the fundamental objective of contributing to the growth of import-substituting and export-oriented manufacturing industries. This policy was more comprehensive in the sense that it defined incentives clearly by granting heavy incentives in the form of income tax, excise duty and sales tax holidays for some years after their establishment.

In 1981 and 1987, the government revised its industrial policy. These revisions were targeted to improve in bureaucratic system, simplifying incentive procedures and differentiating incentives mechanism on the defined industrial categories.

A major policy reform initiated with the restoration of democracy in 1990 to promote manufacturing industries. That was a major policy departure from the previous policies. The new Industrial Policy 1992 announced and emphasis was given to deregulation, and encourages competition and reliance on market forces in the allocation of resources (IIDS, 1996). Government encouraged domestic and foreign investors through the measures such as licensing, tax facilities, FDI and institutional arrangements.

Interestingly, during 1991-1994, more than 3000 industries were registered, far surpassing the rate for preceding decade. Of the registered industries, 473 have come into operation with an investment of over Rs. 26 billion in fixed assets (IIDS, 1996).

The government has initiated various programmes and policies to activate manufacturing sector especially for the mobilisation of economic and technological development of individual

firms. Measures were taken to create suitable atmosphere for foreign investment and the transfer of technology. Efforts were made to encourage private investors for the investment and for the maximum utilisation of managerial and technical skills, modern technology and foreign capital in the process of promoting industries in the country.

In terms of growth of manufacturing units and employment till 1997 there were 3557 units and 0.2 million people were employed. In the first eight months of fiscal year (FY)1 2002- 03, 4475 private firms were registered. Of the 135 establishments that were registered within FY 2001-2003, 57 were related with production of goods. Of the total industrial loans distributed to different types of industries 55 percent went for the manufacturing industries (HMG, 2003).

In terms of performance of manufacturing sector the total contribution on GDP is less than 9 percent. The group-wise industrial production index was increased by 2 percent by fiscal year 2001/2002 compared to 6 percent increase in FY 2000/2001 (1986/87 as a base year). Imposition of quota system by the Government of India in the import of Nepalese vegetable ghee is responsible for this drop in production of this commodity.

As far as capacity utilization of some selected manufacturing industries is concerned, their result is not satisfactory. The capacity utilization of beer and cigarette industries had increased in FY2002/2003 where as for the products like matches, cement, sugar and jute producing plants it remained unsatisfactory in the same fiscal year. In fact, it seems always some problems for operating industries to work with the full capacity.

From the 2nd to the 7th Five-Year plan government gave high priority to the development and growth of public sector undertakings. Almost 64 public enterprises were owned by the government till the end of the 80s.A total 64 public enterprises were commercially operating, of which 39 are first generation enterprises of fully owned or more than 51 percent HMG equity owned, 13 percent are of second generation enterprises where in HMG and first generation enterprises have more than 51 percent equity ownership and two joint venture enterprises with 50 percent equity participation from HMG till the end of 1990. The largest number of pubic enterprises is in the manufacturing sector (29), where 9 are in trading, 8 were in service, 7 in social, 3 in public utility and 8 in financial sector. The number of workers employed was 150 thousands in 1990 in public enterprises. However due to increasing losses, decimal contributions on GDP and increasing commitment of government to invest in social sector, the government decided to privatise some of these enterprises. In the last 12 years, 23 public enterprises have been privatised and of the privatised enterprises 50 percent belongs to the manufacturing sector.

Regarding performance of state-owned manufacturing industries, they have suffered a loss of Rs. 310 million2 (HMG, 2003). The total figure capital employed in Nepalese rupee

1 According to government system, in Nepal, fiscal year starts from mid-July. 2 71 Rs= 1USD

remained 3786 million and gross profit as percentage of capital employed was just 8 percent (HMG, 2003). The figure of capacity utilisation of the major industries is below 70 percent. Government investment in the forms of share capital and loans has been on rise due to lack of capital management and capital formation of public enterprises.

Despite various initiatives taken by the state there is a long way to go in improving the prevailing macro environmental factors. Given the present situation, Nepal needs to improve its competitiveness by ensuring duty- free for exporter, technological upgrading, skill development, export and tourism promotion, as well as investment aimed at supplying the neighbouring Indian market (The World Bank, 1999-2001). Furthermore, the country still faces barriers of economic development due to limited natural resources, a landlocked location, difficult topography, poor infrastructure, a weak human capital base with extremely poor levels of education and health, poor public management capacity and a long history of public intervention in the economy (The United States Embassy, 1998).

It is noted that despite various measures from the government to improve performance of public sector management it was found to be ineffective, irresponsible and insensitive to their duties (Panday, 1999). Prior to 1990, the overall consensus among workers was that job design dimensions are unsatisfactory on the shop floor…, manufacturing sector failed to humanise the work place, struggling to simply survive (Adhikari, 1992).

Nepal severely lacks skilled manpower. Low literacy rate on the one hand and non vocational education at school level on the other have caused a shortage of skilled manpower in the country. Due to lack of skilled labour force in the country the advantage of modern and sophisticated technology has not yet been taken and thus organisations lack competitive skill at the international market. At the same time there is a pressing need for the creation of jobs in the economy. More than 15 percent of the total economically active labour force is unemployed. Similarly, increasing number of graduates is looking for new jobs. If present socio-economic system remained unchanged, the situation of unemployment will be worse in the near future.

By and large, although government initiated various policy measures and enacted a number of rules and regulations the overall performance of manufacturing industries is not very satisfactory. There are number of problems facing manufacturing industry. Some of these problems constraining growth of manufacturing industries are: high cost for raw-materials, little access to international markets, unfair and unequal treaties in the past, lack of overstaffing, absence of corporate culture, growing employee's satisfaction, weak enforcement of rules and regulation, increasing quality complaints, increasing feelings of insecurity among investors, increasing customers complain, declining employees' satisfaction in given jobs, government interference, poor operational and financial management, operational inefficiencies and the lack of control mechanism and efforts (Adhikari, 2000). Similarly, in case of public manufacturing industries, the constraining factors inhibiting growth and development of these enterprises are overstaffing, increasing government interference, poor

operational and financial management, operational inefficiencies, lack of control mechanism and efforts (Adhikari, 1992, IIDS, 1996, HMG, 2003). The overall situation of QWL is not satisfactory, workers are just working for daily survival and government's institutional mechanism to implement regulative measures is not very satisfactory (Adhikari, 2004, Pant and Pradhan 2002, GEFONT, 2001, Adhikari, 1992).

Concept, Performance Outcomes and Responsibility of Improving QWL

The main problem relating to security and equity confronting workers these days arises from the development of the factory system in the industrialised countries. However, after 1950 in many of the industrialised countries problems relating to security and equity have been resolved with considerable protection by the law and due to powerful unions that offered excellent protection to the working people (Westley, 1979). The factory system theory misinterpreted labour as a commodity. However, with the development of concept of QWL, the notion of 'labour as commodity' has been challenged with the emphasis given to the humanisation of work and enhancement of workers' participation to make jobs more interesting, challenging and motivating (Bolweg, 1976).

The term quality of work life (QWL) originated from the concept of social-technical system design in the 1970s. It represents perceptions and attitudes of the workforces that they are safe, relatively well satisfied and able to grow and develop as human beings and believed that it enhances their dignity through job satisfaction and humanising work, assigning meaningful jobs, job security, adequate pay and benefits, safe and healthy working conditions, opportunities to develop human capacity, social integration, freedom to self-expression, social relevance, increases individual productivity and finally achieve overall organisational effectiveness (Schular and Huber, 1993, Hian, Einstein and Walter, 1990, Feuer, 1989, Nachmias, 1988, Lawler III, 1982, Carlson, 1980, Guest, 1979, Hackman, 1977, Shuttle, 1977 and Walton, 1974). The main thrust of quality of work life comprises making work more interesting and challenging through redesigning of jobs and work organisation (Bolweg, 1976).

The performance outcomes of quality of work life initiatives are uniting management and organised labour, quality products, services, and relationships across functions and levels and between customers and producers (Weisbord, 1990). It helps to minimise cost, control quality, increase profits and satisfy employees' most important needs (Cascio, 1992, Suttle, 1977). On the contrary, the negative outcome affects directly on workers’ physical and psychological problems, absenteeism, higher turnover, poor workers’ relations, loss of human potentiality at work and low level of trust between employees and management (Gowdy, 1987, Burnstein, 1987).

So far as responsibility of improving QWL is concerned, it is jointly shared by employees, management, union leaders, government and behaviour scientists (Suttle, 1977). However, it is believed that the role of government and its institutions is most vital in protecting rights and interests even at the time of deregulation. Even in a capitalist country like Japan the

government plays a guardian role in few cases particularly to protect interests of business and workforces (Drucker, 1993). In a recent study it is observed that the Japanese government has remained most vigilant in protecting working people by formulating and enforcing policies time-to-time to cope with changing socio-economic situation (Adhikari, 2005).

Government enacts various rules and regulation that enforce management to implement QWL measures and increase awareness in company unions to ensure the implementation of regulative measures. Therefore, realising the increasing role of the government in this paper the author devotes primary attention to the role of government to enhance QWL.

In course of examining the goal of this paper discussion will be made on the following different aspects of the QWL: a) brief introduction of country; b) history of manufacturing industries; c) concept, performance outcomes and responsibility for QWL d) role of government in implementing QWL initiatives; and e) summary and discussion on different issues of improving.

Framework of the Paper

Based on above theoretical review of the concept, outcomes and responsibility of QWL this paper attempts to evaluate, more specifically, the role of Nepalese government to enhance QWL manufacturing enterprises. It is assumed that the performance of manufacturing sector, inter alia, depends upon how far government succeeded to enhance QWL through its provisions in the past.

Figure: 1 Framework of the Paper

QWL provisions in Labour Government's Mechanism Legislation to implement QWL

Enhancing QWL in the Manufacturing Sector

Although the role of enterprise itself is important in the implementation of QWL provisions, this framework particularly supports role of the government to enhance QWL through regulations.

Role of Government to Implement QWL

The implementing philosophy of QWL depends on the present legislation of the government (Adhikari, 1993). Particularly, labour related legislation guides the industrial relation and influences the HR activities of the organisation. However, legislation is guided by the national culture and value systems, which differ from country to country, and this is reflected in the laws of different countries. For example, in the US, individualistic and achievement-oriented cultures prevail to a large extent compared with other countries. That is why, in the US, there is less legislative control over the employment relationship than it is found in Europe. In many European countries, pay, health and safety, working conditions, and working hours are regulated by the state legislation. It is believed that compared to the USA, in broad terms, the European State has a higher involvement in underlying social security provision, a more direct interventionist role in the economy, and service in the field of personnel and industrial relations, and is a more substantial employer in its own right by virtue of a more extensive government-owned sector (Brewster, 1995).

Indeed, in a country like Nepal where the culture of privatization and deregulation is yet to emerge, the State has to play paramount role to protect rights, interests, facilities and safety of workers in different establishments. It is believed that nearly one in every three children in Nepal - 2.6 of the country's 7.9 million children between ages five and fourteen - is a child laborer (ILO-IPEC, 2004). Some of these children work in agriculture, in manual trades, and in industry. Some are exploited as domestic workers, porters, and rag pickers. Still others are bonded as labourers to pay parental debts or trafficked into prostitution. According to estimation by the government source in Nepal over 26000 children aged 5 to 14 are engaged only in manufacturing industries (NLFS, 1998/99). In such situation the role of government to protect interests of child labour can not be overlooked. Similarly, since the country has regulation to form trade unions even at the enterprise level it is imperative for them to work at the factory level for the interest of workforce.

In Nepal, the state has to play a dual role in implementing the IR system. First, it has to play regulatory role to ensure that IR activities are smoothly going on in organisations. Second, since the government is still the biggest ‘employer’ in the economy as it employs and manages a larger number of employees in the state enterprises it has to sit in the negotiation table in order to reach an agreement in collective bargaining process. In fact, the government has been taking necessary steps to regulate IR system through legislative and through institutional mechanisms in the last five decades.

There are provisions in different acts to deal with QWL issues at the factory level. Three acts governing the issues are the Labour Act 1992, the Child Labour Act 2000 and the Trade Union Act 1993. Below discussed are some provisions made in these different acts in enforce QWL measures at the industry level. The Labour Act 1992

Article 26(6) of the Constitution states a " policy of increasing the participation of the labour force, the chief socio-economic force of the country, in the management of enterprises by gradually securing employment opportunities to it, ensuring the right to work, and thus protecting its rights and interests (The Constitution of Nepal, 1990). In compliance to the norms of the Constitution the Labour Act aims to protect rights, interests, facilities and safety of workers and employees working in different enterprises in various sectors. Some of the major provisions are summarised below:

 Job Classification: According to Section 3 (1) of the Act every establishment3 shall have to classify the job of the workers and employees of the enterprise according to the nature of production process, service or business of the enterprise and shall furnish the information thereof to the concerned Labour Office. This refers that pay and other incentives of a worker should be explicitly based on the nature of work done.

 Recruitment: Section 4(1) while appointing any employee4 or worker on a classified post, the establishment shall call a vacancy to fill the required post. According to Section 4(2) when a worker is appointed in a post and completes 240 days of continuous service in one year', he or she shall be entitled to get a permanent position in that establishment.

 Employment of foreign workers: Except in the job where special skills and knowledge are needed and no Nepalese citizens are available in such job, no non- Nepalese citizen is appointed in any classified job.

 Termination of service: According to Section 10 the service of any permanent worker or employee of the enterprise should not be terminated without complying with the procedures prescribed in the Act or the rules or bye-laws made under this Act.

 Change in the ownership: According to Section 8, any change in the ownership of the enterprise shall not be deemed to have any effect on the terms and conditions of service of the workers or employees of the enterprise adversely.

 Intermission for Refreshment and Rest: According to Section 18 employees are not supposed to work continuously for more than five hours without providing an interval of half an hour for tiffin.

3 the term establishment is used to refer 'factory' or 'enterprise' in this paper. 4 for the pursuant of Labour Act 'employees' and 'labour' are distinctly defined. Whereas employees refers to persons working in administrative posts, labour refers to the person obtaining remuneration against for working in production jobs, or plant, or building construction or to similar other works.

 Minimum Remuneration Fixation Committee: According to Section 21 His Majesty's Government shall fix the minimum remuneration, dearness allowance and facilities of workers or employees of enterprises on the recommendation of the Minimum Remuneration Fixation Committee and the notice regarding such fixation shall be published in the Nepal Gazette.

 Annual increments: Any worker or employee employed permanently under sub- section (2) of Section 4 shall be entitled to one increment each year.

 Health and Safety: Sections 27, 28, and 29 of the Act make sufficient provisions for keeping the workplace free from dust, fumes and hazardous chemicals, adequate supply of light and water and other health and sanitation facilities at work places. The Labour Office can give order for maintaining safety standard at the work place.

 Compensation: Section 38 of the Act clearly states that in case of any worker or employee of the enterprise sustains physical injury or seriously hurt or gets impairment due to loss of any part of body or dies in course of his work, the compensation shall be paid to him or to his family, as prescribed.

 Power to determine the standards: According to Section 36 His Majesty's Government time-to-time may prescribe the standards of safety required as per necessity by a notification published in the Nepal Gazette.

 Punishment: Section 56 of the Act clearly states that in case any person obstructs the government employee assigned for the supervision or undertaking any duty, or does not produce or present for the examination of any worker or employee ordered to be produced before him or makes bar for being examined by him, the Labour Office may punish such person with a fine of up to five thousand rupees (equal to 700 USD).

 Appointment of Factory Inspector: According to Section 66 of the Act His Majesty's Government may, by a notification published in the Nepal Gazette, appoint one or more Factory Inspectors for any region or may appoint one Chief Factory Inspector for the whole Kingdom of Nepal. One of the duties of the Factory Inspector is to examine building, land, plant, machine, health and security aspects of the factory, to collect and test the samples of finished or semi-finished materials used in the factory or to cause them to be tested, to inspect the registers and documents relating to the factory and to record statements of any person, as per necessity.

 Welfare Officer: The factory employing more than two hundred fifty employees has to appoint one Welfare Officer. If a company is employing more than one thousand employees it has to additionally appoint an Assistant Welfare Officer. However, where

less than two hundred employees are working may be appointed any officer of the enterprise to work as Welfare Officer.

 Labour Courts: Section 73 of the Act makes provision for establishing the Labour Court. However, Appellate Court is responsible for the settlement of dispute finally in the absence of Labour Court.

 Formation of Labour Relation Committee: According to the provision in the Section 63(1) of the Act every enterprise shall have to form a Labour Relation Committee in order to create amicable atmosphere between the workers or employees and the management and to develop healthy labour or industrial relations on the basis of mutual participation and co-ordination.

Child Labour Act 2000

Article 26(8) of the Constitution of succinctly states that "the State shall make necessary arrangements to safeguard the rights and interests of children and shall ensure that they are not exploited, and shall make gradual arrangements for free education (Constitution of Nepal, 1990). Particularly, in the Article 20(2) it is stated that "no minor shall be employed in work in any factory or mine, or be engaged in any other hazardous work." In conformity to the Constitution the Child Labour Act 2000 was promulgated. Some important provisions relevant to maximize QWL at work are as follows:

 Provisions for the engagement of a child labour in work: According to the Child Labour Act, 'child' is defined as those who have not completed the age of 16. Section 3 of the Act describes that factories are not allowed to engage a child as a labour prior to completing fourteen years of age. Section 4 of the Act clarifies it is also mentioned that factories are not allowed to engage a child labour by pleasing, gratifying or misrepresenting him or under greediness or fear or thereat or coercion or any other way against his will. The Labour Office may depute any employee time-to-time to inspect factory if employing child.

 Approval to be taken: According to Section 6 of the Act if an Establishment has to engage a child in a work it has to obtain approval of concerned Labour Office or any other body or officer specified by that office and that of parents or guardian of the child.

 Inspection: According to Section 15 of the Act, Labour Office may depute from time to time any employee to inspect the factory that has employed children. The deputed employee shall have to submit a report to Labour Office within fifteen days of completion of inspection stating therein an exact statement of whether the factory has employed a child.

 Certificate of fitness: According to Section 7(1) every factory must take certificate of fitness for a child's being capable of working as a labourer before it employs child as a labourer. Similarly, as mentioned in Section 8(1) it is necessary to submit a statement to the Labour Office consisting of detail of employing organization, child and manager within fifteen days from the date of employment of child.

 Health and safety measures: It is necessary to take measures by a manager for health and safety of a child working in the factory.

 Punishment: According Section 19 government can punish if the factory fail to abide the given provisions and the volume of punishment depends on the nature of its conduct. The Labour Office having power to punish if the factory fails to abide the given rules and regulations.

 Child Labour Prevention Committee and Fund: According to Sections 23 and 24 His Majesty's Government shall form a Child Labour Prevention Committee in order to provide health, safety education, vocational and training for child working in an Establishment; to make provision of appropriate employment for child; to discourage employment of child and to solicit necessary opinion, suggestion for prevention of child labour. Similarly the government will create Child Labour Prevention Fund for the child labour prevention purposes.

 Direction may be given: As described in the Section 25 of the Act for implementation of the objective of this Act, His Majesty's Government may give necessary directions to Manager, trade union and child welfare home and association which takes care of child for the protection of rights and interest of child.

Trade Union Act 1992

Unions are largely successful in improving the quality of work life (QWL) in many countries. A better quality of work life can be ensured by enterprise level unions with a set of HR conditions and practices such as promotion within policy, democratic supervision, employee involvement, safe working conditions etc. Realising this fact the Trade Union Act aims to protect and promote the professional and occupational rights of the workers, and self employed workers working inside or outside the enterprise, engaged in various industry, trade, profession or service. The Act clearly states provisions to form enterprise based union in order to protect and promote occupational rights of the workers. Some of the major provisions for protecting employees' rights and interests are presented below:

 Formation of enterprise-based trade union: According to Section 3 of the Act workers of concerned enterprise may constitute and enterprise level trade union to protect and promote their occupational rights.

 Duty: According to Section 9(B) the trade union association and federations have to engage in collective bargaining on behalf of the enterprise level unions. The enterprise level unions have to allow the workers to follow the decision made by the Enterprise level Authorized Trade Union.

 Presentation of Claim: Notwithstanding anything in Section 74 (1) of the Labour Act, 2048 (1992) the working committee of the Authorized Trade Union on behalf of the workers may present claims in written form with the number and names of its representative to the management for collective bargaining. The Authorized Trade Union shall not go on strike in enterprise or do such action that may assist it in any manner without completing the procedure mentioned in Section 76 of the Act.

 Appointment and functions of Registrar: Sections 14 and 15 clearly state that His Majesty’s Government shall appoint Registrars as necessary for the registration of the Trade Union in accordance to this Act. The Registrar shall be responsible for the registration of trade unions.

 Special Power of His Majesty’s Government: According to the Section 30 His Majesty’s Government may give necessary order or direction to restrict such activities of Trade Union if the activity of the Trade Union seems to create extra-ordinary situation thereby disturbing the peace and order or to go against the economic development of the country.

From the above presentation on different provisions of acts it appears that government is actively playing guardian role with a view to protect interests of labour force working in factories. However, it is yet to know clearly how far the government is able to enforce these regulative measures in order to enhance QWL.

QWL in Manufacturing Industries: Some Observations

In this section the main focus will be on presenting facts and findings of QWL issues and role of the government based on different studies and observations made in the past. In fact, there is paucity of empirical research in the areas such as humanistic management, quality of work life and job design in the past. The first study was conducted in the 1991 by this author in 7 manufacturing factories (Adhikari, 1992). The study revealed that: a) the shop floor jobs in Nepal were generally considered routine and non-motivating; b) overall consensus among workers was that job design dimensions were unsatisfactory on the shop floor; and c) interestingly, although the jobs were routine, non-motivating and unsatisfactory there was no effect on workers remaining on the job, due to their economic necessity alone. In the same study it was observed that jobs were very simple and repetitive and less challenging and it is explored that the main motivating factor in the job was the money. The study further asserts that workers were strongly in favour of pay rise. Workers were less creative and innovative and

it was noticed that the strongest need strength factors on the job were: pay rise, opportunity for overtime work and money for the education of workers’ children. And the most dissatisfying factors on the job were large number of size of family, severe off the job stress, lack of opportunities in the labour market, lower social status, difficulty in meeting the costs of living and limited opportunities to join trade and occupational schools.

Another investigation undertaken by a group of experts comprising academicians, managers, and plant engineers in 40 manufacturing industries employing 10 to 1000 workers in 1997 revealed the following QWL features in the manufacturing industries (CEMIR, 1993):

Physical working conditions: A large number of small scale industries were established in existing building facilities, layouts are not systematically arranged.

Physical and mental efforts required: In these industries jobs are very short-cycled, simple and repetitive and involve conventional low-level technology, dexterity and initiative. Performance of most of the jobs does not require high physical and mental efforts.

Social security: Workers are not insured against health hazards and the given medical facility is not enough to cover health and sanitation needs.

Skill required in the jobs: About 44 percent of the jobs do not require even reading and writing skills of the workers. 43 percent workers require detail instructions to perform their jobs. Less than 4 percent jobs require close attention, diligence, initiative and a high degree of dexterity and accuracy. 90 percent supervisors working on production floors have no ideas about the principles and practices of modern management, marketing, finance, engineering, auditing and other relevant disciplines.

Accommodation: Only 27 percent workers were having apartment provided by the factories. The quality of accommodation was very poor from hygiene and sanitation point of view. They normally stayed in a small room and in most cases, the kitchen would be attached to the bedroom in the corner.

Job responsibility: Only 2 percent workers have some economic and supervisory responsibility on the job.

In a study concluded by the General Federation of Nepalese Trade Unions (GEOFONT) Nepal in 750 enterprises in 2001, following situation of implementation of Labor Act 1992 revealed (GEOFONT 2001):

Recruitment: 61 percent organizations had no system of providing appointment letter, 77 percent organizations had not reappointed as permanent even after completing 240 days,

86 percent organizations had no system of advertisement for recruitment and 40 percent organization had no employees contact in permanent basis.

Working hours: Regarding working hours and facilities the survey finds very unsatisfactory results. Only 42 percent of enterprises had implemented minimum wage system, and 36 percent of enterprises had no provision of fixed working hours.

Leaves and holidays: Regarding provision for leaves and holidays, 65 percent had provided sick leaves, 54 percent had provided public holidays, 55 percent had provided compassionate leave, 50 percent had provided sick leave and 33 percent had provided maternity leave.

Collective bargaining: Regarding trade union rights and collective bargaining agreements (CBA), 54 percent of enterprises had CBA atmosphere, 55 percent enterprises had not created obstacle or harassment for CBA, only 64 percent organizations had implemented CBA, 60 percent organizations created problem in the formation of unions and 35 percent organizations were found to be punishing or harassing union activists.

Occupational health and safety: Only 13 percent organizations had provision for life insurance and 22 percent organizations had provision for accidental insurance. The survey reveals that only 37 percent enterprises had provisions for pay during accident and injury, 62 percent had provided medical treatment in the accidental injury, 49 percent organizations had provision for first aid. Furthermore, only 15 percent enterprises had provided pay during sick time, 23 percent had provision for medical treatment and 15 percent had medical check up facilities.

Formation of Labour Relations Committee (LRC): Only 7 percent of organizations having LRC to facilitate labour management relations and 24 percent of organizations had their own regulations of enterprises. The situation of garment industry is worst in terms of labor relations where almost 98 percent of enterprises had no LRC.

Work permit: Regarding the situation of guest workers, 41 percent of enterprises had employed guest workers whereas only 3 percent of these enterprises employed guest workers having work permits. In accordance to the Labour Act every foreign citizen should have to take work permit in order to get employed.

In a recent study undertaken in the garment industries the following features of QWL are noticed: (Pant and Pradhan, 2002)

Pay system mechanism: The amount of salary, wage and allowance is based on personal whims of the entrepreneurs. No standard pay system is developed across the industry. There is no link between workers' productivity and wages.

Training and development: A large number of the employees were trained on-the-job. However, employers began to think that such training only increases operational costs. It was due to the experience in the past with female workers who failed to develop their skills despite the training given to them.

Performance evaluation: No industries have formal system of performance evaluation and therefore no promotion is done on the basis of work performed.

Job security: Almost 70 percent of employees are employed on daily wage contract or piece-rate basis. Only 14 percent are employed under the permanent contract basis. Appointment letters are issued only for permanent employees. Temporary employees are not provided appointment letters because employers fear that after 240 days of employment they are entitled to claim for permanent jobs. Almost 25 percent of garment factories are paying wages below the wage fixed by the government which is against the provision of the Labour Act.

Retirement and other benefits: Although few industries have claimed that they have provisions for provident fund, gratuity and accident insurance, many of them have failed to comply with Labour Act in this matter.

Safety and comfort at work place: Although the factories are not hazardous by their nature they need to take few more safety measures to improve the quality of work. The study explores that factories need to exist some safety measures such as provision for fire-exists, fire-alarms, safe drinking water and regulate temperature.

In a HRM survey on 204 industries, of which majority of organizations were selected from among the manufacturing, three important challenges are expected to be considered while managing HRM in the next three years. They are a) maintaining employee relations; a) providing training and development; and c) increasing efficiency, productivity and flexibility (Adhikari, 2004). The survey also revealed the fact that almost 29 percent of organizations are not unionized, 10 percent enterprises ‘don’t know’ whether they are unionized or nor. The study also disclosed the fact that in 19 percent of enterprises 76 to 100 employees are members of the union. So far as influence of union is concerned, study revealed that in 34 percent of the organizations the influence of the unions has increased in the last three years and in 15 percent organizations it remained the same. In 9 percent organizations it has decreased and in 23 percent of organizations there has been no influence of the unions. However, if we check data on recognition of trade union for the purpose of collective bargaining almost 60 percent organizations argued in its favor. In 15 percent of organizations there was no joint consultative committee.

In a recent study of child labour working in brick industry by Concern for Children and Environment-Nepal (CONCERN) it is estimated that 59000 children are working in 900 brick kilns in 22 districts (out of 75 districts) (HT, 2005). It is also stated that 76 percent of these

child labours were aged between 12 to 16 and 24 percent were 6 to 12 years. The study also confirms that almost 85 percent of these children are suffering from respiratory problems, tuberculosis, muscle pain, joint pain, cough , fever, backache and visual defects (HT, 2005).

Summary and Discussion

The history of organized forms of manufacturing industry of Nepal began in 1936. During the 1960s and 1970s a number of state-owned manufacturing industries were established. Till the end of the 1980s the government was the largest employer in terms of providing employment opportunities and ownership of the public enterprises. However, growth of these enterprises was handicapped due to over politicization, heavy government interference and lack of proper corporate management cultures.

Performance of publicly-owned manufacturing enterprises appeared to be unsatisfactory. Their contribution on GDP was less than 9 percent in 2002 (HMG, 2003). The group-wise industrial production index increased just by 2 percent by FY 2001/2002 compared to 6 percent in FY 2000/2001 (1986/87 as a base year). In an average, the capacity utilisation of selected manufacturing was hovered around 70 percent in the last 3 years.

With the restoration of democracy in 1990 government actively initiated privatisation of public enterprises which were running at loss and the Industrial Policy 1992 was formulated to increase private sector's participation and to facilitate flow of foreign direct investment. The State Policy of Constitution of Nepal 1991 assured for the protection of interests of labour force including the minor. Although not sufficient in numbers, acts were promulgated in order to enforce the State Policy in addition to improving QWL situation.

The Labour Act 1992 aims to protect rights, interests, facilities and safety of workers and employees working in different enterprises in various sectors. It has explicitly made provisions for the classification of jobs according to their natures and difficulties. In order to enforce justice in recruitment system in enterprises the Act stated to make a vacancy announcement to fill the required post and to provide an appointment letter prior to assigning a worker with work. Similarly, provisions are made to comply properly for the termination of workers' from their services; secure the jobs of any workers during change in the ownership and to provide adequate compensation in case of any termination according to the law and provide health and safety and sanitation facilities. At the same time, government also ensures the enforcement mechanisms such as provisions for punishment in case the industry fails to abide the rules, appointment of Factory Inspector, Welfare Officer, Labour Courts and Labour Relation Committees.

The Child Labour Act was promulgated in 2000 with a view to prohibiting and regulating engagement of child in factory, mining and similar other riskful works and to make necessary provision for health, child's safety and services and facilities while engaging them in other work. The Act clearly stated that no minor or child of below 14 years of age can work in any

factory. Even if any factory employs a child of age over 14 years it is essential to obtain approval from the Labour Office. The Act made special provisions for formation of the Child Labour Prevention Committee. The Committee is responsible for protecting health of the working child. Furthermore there are provisions for inspection of factories to supervise employment status of child labour and for obtaining certificate of fitness. Every factory has to take health and safety measures otherwise it is subject to punishment in case an enterprise fails to meet the conditions of the Act for the employment of child labours.

Trade Union Act 1992 was promulgated with a view to protecting and promoting the professional and occupational rights of the workers, and self employed workers, working inside or outside the enterprise, engaged in various industry, trade, profession or service. The real freedom to form and organise trade unions at the enterprise level begins with the enactment of this Act. The Act clearly states that at the enterprise level also unions can bargain on different job related issues with the management.

As described earlier in this paper that very few studies have been conducted in the field of QWL and particularly no study has been undertaken to discuss the role of government in the implementation of QWL measures through the legislation in Nepal. Whereas the trend of deregulation challenges the active role of government, experience shows that even in highly developed countries the governments endeavor their best to secure interests of the workers. For instance, of some European countries including the UK and Japan in Asia, where there are considerable protections through the law belong to capitalist block. Similarly, trade unions in these countries are offering excellent protection in large sector of society.

Regarding the role of the government and union in Nepal, few experts observed that the labour legislation is not enough to protect rights of the working masses (Dahal, 1998) and Trade Union Act is inadequate and incomplete (Ojha, 1993 ). However, in the background of discouraging performance records, increasing demand for foreign investment in manufacturing sector and to improve the living standards of working people, QWL can be a new but significant dimension in humanization of work in Nepalese factories. In a study undertaken in 1990 in seven manufacturing factories it was concluded that the effort to improve QWL dimension in Nepal was poorly made and workers were only fighting to survive in their jobs (Adhikari, 1992). The study clearly indicated that jobs were not challenging and motivating at that time and workers were motivated to work just to solve their hand-to-mouth problems. This study was undertaken just 2 years prior to the promulgation of Labour Act and the country had just restored the democratic system after 30 years of autocratic rule.

Another study was undertaken in 1997 on 40 industries 5 years after the enactment of Labour Act and 4 years after the enactment of Trade Union Act. Even there were clear provisions for factories' layout keeping into account health and sanitation requirements of the workers; they were still operated in existing building facilities where there were problems in the supply of water, light and ventilations. Very few numbers of workers were insured against any sort of causality and there were poor health and sanitation facilities.

Next important study was undertaken 9 years after of the enactment of labour Act and after 8 years of the enactment of Trade Union Act. If we carefully observe the findings of the study it clearly substantiates that no serious enforcement of regulations at the work place has been made. Facts presented in this study show that more than 61 percent of the organisations are not providing formal appointment letters and more than 75 percent of organisations have not appointed the workers in permanent jobs even after working continuously 240 days for a year. That was a major lapse on the side of government institutions and clear evidence of how far they are serious to enforce the labour legislation. Although there are clear provisions of forming trade unions at the enterprise level, about 60 percent organisations were creating problems in the formation of union and 35 percent organisations even harassed union activists. This situation further exhibits that how far the government is able to enforce rules and regulations. There were also problems in providing medical and accidental insurance facilities. Many enterprises have no system of yearly health check-up according to the provision made in the Labour Act and only few of them were providing clinical facilities inside factory premises. Although there is clear provision for the formation of the Labour Relations Committee in the factory employing more than 250 employees, only 7 percent of these were having such Committee. The study also found that only 42 percent had implemented the minimum wage system and thus comply with the provision of the Labour Act.

Another study was undertaken in 9 garment factories in 2002. Even after 10 years of promulgation of Labour Act very few of these factories had given the appointment letters to those who employed on daily wage contract or piece-rate basis and worked continuously for 240 days in a year. There were 25 percent of factories not providing even minimum wages as fixed by the government.

Recently, HRM survey has been undertaken in 204 enterprises where there were large numbers of manufacturing industries participated. According to the survey, the main challenges to manage human resources in the next three years are related to maintaining a sound employee relations, providing training and career development opportunities and initiatives to increase efficiency, flexibility and productivity. The survey further reveals the fact that 29 percent of organisations are not unionised and 40 percent of organisations do not recognise unions for the purpose of collective bargaining.

There are still 26000 employees working as child labour in manufacturing sector excluding carpet and garment factories. It is estimated that about .15 million child workers are working in 2000 carpet factories. Of which 65 percent are aged between 11 and 14 and 8 percent are under 10 years of age. The situation of child labour working in 900 bricks in different parts of the country was very worst. They were suffered from many diseases. The Child Labour Act is relatively new compared to the Labour Act and Labour Union Act, however, the recent study by the CONCERN provides sufficient ground to argue that the government mechanism for its implementation seems not very sound. From this situation it appears that, for the government, it is a pressing issue to get the child labour problem resolved.

In the past this author observed that the government, to some extent, remained inefficient to develop proper mechanism to monitor and supervise workplaces to ensure fair practices, such as standardized wage system and implementation of child labour standards (Adhikari, 2001). There was no formal mechanism for handling workers’ difficulties in the manufacturing plants. Very few training programmes were organised at the enterprises to provide the knowledge on basic skills.

From the above information it appears that the government, although it enacted different acts in the past, is not found to be very successful for their enforcement at the enterprise level. Concerns are centering on how government institutions can ensure rights of working people at the time when concept of the development of private sector is emerging. Even the private sector candidly admits the fact that our government institutions are not well enough to support industries and protection of interests of working people. Evidence is there that even in a private sector-led developed economy like Japan the role of government is appreciated in order to protect the rights and interests of industries and workers.

The issue of abundant supply of unskilled labour force, landlocked topography, non-tariff barriers imposed in few major exportable products, low level of domestic consumption, difficult landscape and increasing political conflicts are more frequently cited as problems inhibiting growth of manufacturing industries. However, in addition to these problems the next burning issue is related to regulation of workers' QWL at working places. Although, in the absence of hard fact, it is difficult to establish a perfect link between current state of QWL and performance of manufacturing sector, findings of previous studies, undertaken in the West, provide sufficient evidences that there are negative behavioural and organizational outcomes due to poor QWL ( see Cascio, 1992, Weisbord, 1990, Gowdy, 1987, Burnstein, 1987, Suttle, 1977).

National policies are geared towards the liberlisation and deregulation. However, experience shows that it is difficult for the State to give up all of its responsibility in the name of liberlisation and deregulation. In a country like Nepal where the situation of working people is deteriorating and performance of industries is not being satisfactory in terms of capacity utilization and return on investment, government should be more vigilant to protect their rights and interests. Realising this fact, the enforcement of labour legislation is becoming more relevant than before even the country adopted the policy of privatisation. In other words, the role of government, in the transformation of manufacturing sector and enhancement of QWL is imperative although this sector needs freedom of choice particularly in the matter relating to employment relations. In this direction institutional mechanism such as joint labour- management consultations provides impetus in the enforcement of labour legislation. However, it should be done with the encouragement of labour and management themselves through proper legislative and enforcement measures to seek and establish cooperative relations to enhance QWL practices.

The Cranet survey provides few clues to resolve QWL problems through the legislative measures. According to the survey the first challenge expected to be faced by our enterprises is related to the employee relations. This can be resolved when government legislation makes provisions for ensuring job security and high morale of the work force. The next HRM challenge projected by the study is related to the training and career development. Government can make provisions to develop skills employees, which is lacking in our legislation. Finally, the future HRM challenge is related to efficiency, productivity and flexibility that can be resolved by making provisions that enterprises in the future shall select appropriate and flexible reward systems.

To sum up, two major challenges in front of the government are: a) to develop proper mechanism for the implementation of labour legislation and b) to include of some other provisions to meet the QWL challenges of the future. Any delay to workout on these challenges may further detract QWL situation and ultimately creates many more challenges for the growth of manufacturing sector in the future (the detail of Summary and Discussion is presented in the Table 1 below).

Table 1: Summary and Discussion of Role of Government in QWL Enforcement

QWL provisions Mechanism for Enforcement of implementing QWL government rules and regulations at the factory level Labour Act -Job classification -Safety standards -Jobs were not properly classified -Recruitment procedures -Punishment measures and graded in more than 90% of the -Employment of foreign -Minimum Wage Fixation manufacturing firms as per the workers Committee norms of the Act. -Termination of service -Appointment of Factory Inspector - A large number of factories -Impact of change in -Labour relations committee (almost 61%) were not providing ownership -Welfare officer appointment letter. -Refreshment and rest -Appellate Court -77% of the organisations have not -Health and safety -Labour Court reappointed as permanent event -Compensation against serious after completing 240 days. hurts or injuries or death in -86% organisations had no system course of work. of advertisement for recruitment. -Only 42% of enterprises had implemented minimum wage system as fixed by the Minimum Remuneration Fixation Committee. -Since many factories were Time-to-time inspection and established in existing building and Child Labour (Prohibition direction from the Labour Office and facilities, layouts are not hygienic. and Regulation) Act HMG -36% enterprises have no fixed -Restriction for employing -Child Labour Prevention Committee working hours.

child labour -Labour office approvals -Leaves were not provided as stated -Approval to be taken for the -Deputation of child labour Inspector in the Act. employment of child labour. and action - Only 13% organisations had -Certificate of fitness -Punishment measures provisions for life insurance and -Health and safety measures -Child Labour Prevention Committee 22% have provision for accidental and Fund. insurance. -Government can give direction time- - Only 7% of the organisations to-time. were having Labour Relations Committee. - Although 41% enterprises -Appointment and functions of employed guest workers only 3% Registrar of these enterprises employed on -Special power of HMG the basis of work permit. Trade Union Act -Over 26000 children aged 5 to 14 -Formation of enterprise-based were engaged only in unions manufacturing industries. -Duty relating to collective -As many as 59000 children were bargaining working in brick factories. Of these -Presentation of claim children 76 % were aged between 12 and 16 and 24 % were aged between 6 and 12. -85% Child workers working in brick factories were suffering from respiratory problems, tuberculosis, muscle pain, joint pain, cough, fever, backache joint pain, and visual defect.

60% of enterprises created problems in the formation of unions and 35% of these were punishing or harassing union activists. - 29 percent of organizations were still not unionized, 10 percent enterprises ‘don’t know’ whether they are unionized or not.

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192 Dev Raj Adhikari