Decent Wage and accountability in Global Supply Chain Ramesh Badal

Defining Decent Wage? GEFONT/JTUCC demand The constitution should address the living wage as fundamental right of workers Fundamental right of workers Every Workers shall have the right to fair wage, facilities and protected under contributory social security: The constitution of Nepal, 2015 Labour Act 2017 Minimum wage to be fixed by Tripartite board Decent wage We termed as fair wage and achieve through the collective Bargaining Social Security Employer should contribute to the cost to the social security in addition to the minimum wage Federalism and wage Nepal recently change into unitary to federal structure. Minimum wage may be fixed by local and provincial government but cannot fix less than national Minimum wage 2000 Jan 13 First time minimum wage-rate was fixed to entire agriculture workers 2007 Construction sector's wage rate was defined separately through the Public Procurement Regulation 2008 Sep 18 Replaced existing four-categories of minimum wage by single wage- rate in these sectors 2011 May 23 Employer and union agreed to contribute 20% and 11 % of Basic wage to Social security 2013 June 10 Minimum wage increase 1800 per month 2016 Feb 01 Minimum wage increase 1700 per month after earthquake 2018 July 17 Minimum wage increased 39% and first time hourly wage fixed

History of Minimum Wage: A timeline 1965 May 31 Monthly Minimum Wage fixed first time in Nepal and applicable only one dozen factory 1972 November 12 Minimum wage extended to 13 district out of 75 district but do not apply to contract and peace rated workers 1979 April First time minimum wage fixed for daily waged workers 1992 July 27 Separate minimum wage fixed for tea plantation workers 2000 January 13 First time minimum wage fixed to Agriculture workers 2018 July 16 Minimum Wage increased 39% as a part of +50 campaign and first time it is applicable to domestic workers and agriculture workers, hourly wage fixed, Government notification to pay wage of workers from banking channel only within one year, all outsourcing company covered. 2000 Jan 13 First time minimum wage-rate was fixed to entire agriculture workers 2007 Construction sector's wage rate was defined separately through the Public Procurement Regulation 2008 Sep 18 Replaced existing four-categories of minimum wage by single wage- rate in these sectors 2011 May 23 Employer and union agreed to contribute 20% and 11 % of Basic wage to Social security 2013 June 10 Minimum wage increase 1800 per month 2016 Feb 01 Minimum wage increase 1700 per month after earthquake 2018 July 17 Minimum wage increased 39% and first time hourly wage fixed

Use of Consumption Basket

Wage increase ratio before recognition of Union 1965 to 1992 Year Average wage NRS National CPI Real wage Index 1965 157 100 1966 102 98 1973 190 77.1 1978 296 222 85.1 1980 370 378 62.4 1983 440 507 55.2 1985 540 611 56.3 1987 663 769 54.9 1989 931 912 65.0 1992 1232 1320 59.5

Wage increase ratio after recognition of Union 1992 to 2018 Year Average wage NRS National CPI Real wage Index 1992 1232 100 100.0 1995 1532 127 97.6 1997 1882 149 103.0 2000 2198 175 101.4 2003 2642 197 108.8 2006 3382 235 117.1 2008 4682 283 134.5 2011 6200 367 137.1 2013 8000 440 147.5 2016 9700 542 145.3 2018 13450 562 194.3

Expenses required per person on 2017 Item Quantity Price per unit(NRS) Monthly required amount Rice or white 10 Kg 70 700 Lintel 3 Kg 90 270 Vegetable Every day (30 days ) 30 900 Cooking oil 1 Ltr. 130 Salt and spices 5 150 Tea and sugar Every month 62 Snacks 25 750 Milk 1 Packet everyday 35 1050

Expenses required per person on 2017 Item Quantity Price per unit(NRS) Monthly required amount Gas 4Kg per months 92 368 water and electricity Per month 75 Transportation Per day 20 600 Brush, tooth pest/ shampoo cloth Two pear per year 800 67 shoe and sandal 500 42 Medicine 150 Other expenses Total cost 5539 We demanded that 5539x4 =22156/- as minimum wage per four member family where only one wage earner in a house. However, 13450 has been fixed as minimum wage

Minimum Wage Before Democracy: Average Real Wage in Nepal, 1965-1989 (Manufacturing Sector) (Base year 1965=100) Note: * Including dearness allowances, average of four categories Source: Calculated using national consumer price index (CPI)

After Recognition of Trade Union (Manufacturing Sector) Minimum Wage: After Recognition of Trade Union (Manufacturing Sector) (Base year 1992=100) Note: * Including dearness allowances, average of four categories Source: Calculated using national consumer price index (CPI)

Regulating outsourcing to held principle employer responcible labour Laws 4 September, 2017 New Labour Act 2017 come into force, which is a outcome of Union and employers agreement 22 December 2075 All outsourcing company need to registered, no one supply human resource to other business unless obtaining permission form the department of Labour Responsibilities of Principle employer No business contract with supplier violating any provision of Labour law even through the bidding process Secure Minimum wage and Monitor payment of wage monthly basis, may ask bank statement as proof Payment of Social security contribution, other benefits like leave, compliance of holiday etc, monitor labour audit report Provide proper working condition and manage the issue of Occupational safety and health related matter 2000 Jan 13 First time minimum wage-rate was fixed to entire agriculture workers 2007 Construction sector's wage rate was defined separately through the Public Procurement Regulation 2008 Sep 18 Replaced existing four-categories of minimum wage by single wage- rate in these sectors 2011 May 23 Employer and union agreed to contribute 20% and 11 % of Basic wage to Social security 2013 June 10 Minimum wage increase 1800 per month 2016 Feb 01 Minimum wage increase 1700 per month after earthquake 2018 July 17 Minimum wage increased 39% and first time hourly wage fixed

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