EMPLOYEE RIGHTS: WHAT ARE YOUR OPTIONS AS AN EMPLOYEE IF YOU LOST YOUR JOB AMIDST COVID-19 PANDEMIC?
COVID-19 pandemic has triggered a shutdown of economic activities across the globe. One among the various sectors affected deeply by the COVID-19 pandemic is the labor market. A lot of workers are being laid off permanently from their work owing to the COVID-19 pandemic. Lots of these layoffs are illegal as due processes are not being followed, compromising the rights of employees to employment and benefits and therefore such terminations shall be labeled as wrongful terminations.
Article 34 of Constitution of Nepal guarantees every citizen their right to employment and further provides that the right to employment and the terms and conditions of employment, and unemployment benefit shall be as provided for in the federal laws: Labor Act 2017 (“Labor Act”) and Labor Rules 2018 (“Labor Rules”) and Right to Employment Act, 2018 (“REA”) among others. Except and as otherwise provided for in these laws, no employee shall be terminated or removed from the employment or their remuneration be deducted.
About wrongful termination:
Is the cause of termination valid under the employment agreement? Termination of employment citing the condition provided for in the employment agreement shall not be wrongful termination.
Was the employee served with proper notice? Labor Act mandates notice of termination mandatory. It mandates employers to provide a one day prior notice to employees who have served for up to four weeks, seven days prior notice to employees who have served from four weeks to one year and a month’s prior’s notice to employees who have served for more than a year. If notice has not been served properly, that amounts to wrongful termination.
Was the employee retrenched? If the employee was laid off permanently citing economic difficulties caused by COVID-19, but due process as in serving proper notice and consultation as provisioned in Section 145 of Labor Act were not followed (for details on due process: refer to our former article on “What are your options to deal with the payment to your employees in this lockdown?”), and if the employee was not compensated with an amount equal to one month of basic salary multiplied by the number of years he/she has worked with the employer, then that amounts to wrongful termination as due process for retrenchment has not been followed.
Remedies Available:
Prevailing labor laws provide that employees shall not be removed from the employment without any reason.
- Reinstatement and Payment
Employees will be reinstated if the labor office or courts find the termination wrongful. Section 172 of Labor Act suggests that employees shall get paid for the whole time being if their termination is determined as unlawful and if they choose to be reinstated as per the law.
Furthermore, in case of lawful retrenchment, retrenched employees will get priority in hiring.
2. Compensation and Payment
Section 172 of Labor Act provides that employees will be eligible for compensation along with the payment of remuneration and benefits till the date of decision by competent authority if their employment was terminated wrongfully and only if they choose not to be reinstated further in the same employment.
Likewise, Section 144(2) of Labor Act provides that if the employee was terminated without notice, the employee shall be eligible for compensation amounting to the salary and benefits of the notice period even if the causes of termination are valid, except as provisioned otherwise in the employment agreement.
Likewise, if the employer does not provide the remuneration or other facilities of the employee within 15 days of termination, then the employee shall be entitled to payment of the remuneration and other benefits until the payment is made.
3. Interest
Section 156 of Labor Act provides that if the employer does not pay any amount determined as due by the concerned authority within two months, then interest shall be levied at the rate of 15% starting the date of such decision.
How to get the remedy?
Option A: Apply at Employment Service Center
In case of wrongful termination and for reinstatement, the aggrieved employee may file an application pursuant to Section 7 of REA, stating facts and reasons to the concerned Employment Service Center (“ESC”) for the continuation of his or her engagement in the employment. ESC will then send the application to the concerned local level for necessary inquiry. Upon necessary inquiry into the application if it appears that the employee was removed for no reason, the concerned local level may give direction to the employer to continue the employee’s engagement in the work. Furthermore, such wrongful termination shall be deemed as an offence and the employer shall be punished with a fine of ten thousand rupees.
Note: There are only three established ESCs in Nepal as of today at Dhangadhi, Kathmandu and Biratnagar.
Option B: File a Complaint at Labor Office
An aggrieved employee may file a complaint at the concerned labor office within six months of wrongful termination. After necessary inquiry, the labor office may issue necessary directives pursuant to Section 163 of Labor Act if it finds that the termination was against the provisions of the Labor Act, Labor Rules as such; including reinstatement, payment and compensation.
If such a decision of the labor office is not satisfactory to the employee, s/he may apply for an appeal to the labor court within 35 days. Appeal against decision of labor court shall be entertained at Supreme Court of Nepal if filed within thirty five days.
