Labour and Employment Law

Labour and Employment Law

We advise on the full range of labour and employment matters, including litigation, transactional work and day-to-day advice, for domestic and international clients. Labour disputes in Nepal rarely stay simple. A single termination can raise procedural, contractual and trade union questions all at once, and we work across all of it rather than treating each piece in isolation.

The Legal Framework

Employment relationships are governed primarily by the Labour Act, 2074 (2017), which replaced the 1992 Act and widened its reach to practically every organisation, including foreign enterprises hiring in Nepal. Alongside it sit the Labour Rules, 2075, the Contribution-Based Social Security Act, 2074, the Bonus Act, 2030 (1974), the Trade Union Act, 2049 (1992) and the Sexual Harassment at Workplace (Prevention) Act, 2071 (2015).

Termination follows codified grounds and procedures rather than broad employer discretion. Prior notice is generally required except in misconduct cases, and retrenchment requires advance notice to the Labour Office and any recognised union, along with consultation. Misconduct is tiered, with punishment meant to be proportional, which matters in practice: a disciplinary action that skips a step or imposes a disproportionate penalty is exactly what a Labour Court challenge is built around.

Collective bargaining has its own structure. Entities with ten or more employees must form a Collective Bargaining Committee, and disputes move through the Labour Office, then the Labour Court, with a final appeal to the Supreme Court.

What We Do

• Employment documentation: agreements, handbooks and workplace policies built to hold up under the Labour Act’s specific requirements.
• Day-to-day guidance: hiring, grievances, disciplinary action, trade union and collective bargaining matters, layoffs and benefit structuring.
• Labour audits and due diligence, including the annual labour audit requirement under the Act.
• Compliance documentation under the Labour Act and related statutes.
• Representation before the Labour Office, the Labour Court and every level of the judicial system through to the Supreme Court.

Additional Areas

We conduct human resource audits, advise on workplace sexual harassment complaints and the management of potential liability, and advise multinational companies on cross-border employment issues. We represent clients across manufacturing, services, hotels, IT, development organisations, INGOs and diplomatic missions, and regularly deliver workplace training on labour law compliance, which prevents far more disputes than it resolves.