Within a week the Supreme Court has delivered two verdicts relating to the salaries of employees. The first verdict ruled that the Labour Act 1991 does not apply to foreign joint venture companies not registered in Nepal but set up here for short term projects. The second ruled that there is no need to direct the government to provide salaries to the employees of the dissolved Himal Cement Company (HCC) on the ground that the Company Act guarantees the salaries. It noted further that the employees have the right to claim their salaries through the ordinary legal process and that several government authorities had told it that measures were being taken to pay the salaries. Some four years ago, the apex court had directed the government to disburse the salaries.

The court verdicts are binding on all. However, many may feel some questions remain unanswered. The first verdict came in connection with a dispute between the Mid-Marsyangdi Hydro-electric Project and a dismissed employee. According to the ruling, such companies can hire and fire employees without reference to Nepal’s labour laws. Certainly, really short term projects cannot afford to make the services of their employees permanent. But, to ensure fairness, all firms who work in Nepal even for a short term should be required to meet some minimum standards regarding the remuneration and perks offered to locals. An important question concerns the duration of short term and this too should be specified, though investors would naturally seek very flexible labour laws, which would give them greater powers to hire and fire employees without legal hassles.

But this should not remove the need for certain norms within which both employers and employees should operate. If employees do not get their salaries, they may be compelled ultimately to knock on the doors of the court and would expect it to order the employers to pay, since the judiciary is the last resort of a citizen. The HCC employees may eventually get their overdue pay, but the question of when becomes particularly important after so much delay already. In the absence of an order, those who are supposed to pay might be emboldened to delay the process further. It becomes even more worrying when such a company has government’s equity. Many employers, particularly in the private sector, have tended to take the need to pay in time not that seriously. When there is some laxity in the enforcement of the labour rules on the part of the government authorities, it is likely to strengthen that wrong tendency. It would be much better if the government ensured that such disputes were settled at the level of the Labour Department so that employees would not have to go to the court in the first place.