In a broad sense there are two approaches to managing human capital: commitment and compliance, however, the two are not contradictory to each other. Laws and policies remain the foundation of framing human resource management policies. Nepalese labor market is governed by labor act 2017 and labor rules 2018, including other national and international rules and conventions ratified by Nepal government. Disputes are common for the organization of any types for various reasons. Organization takes numerous actions to the employees, the action might be related to skills or attitude. Moreover, adoption of newer strategies or financial turmoil compel the organization to follow employee downsizing or rightsizing.

Disciplinary Actions
Disciplinary actions are the result of the undesirable attitudes and behavior of the employees. The disciplinary actions shall vary depending on the conduct.

Warning 
Organization provides the written or oral warning to the employees for the following reasons.
  • Being absent to work or late to work repeatedly without taking approval
  • Leaving organization without approval within the office hours
  • Violating, neglecting or going against the job related orders of supervisor or management 

Deduction of Salary Equivalent to One Day
  • For denying to take the written warning given by the authority
  • For involving or encouraging others in unlawful strike, causing vandalism or affecting the performance/ productivity of the organization
  • For taking or trying to get additional benefits submitting false documents
  • For not obeying safety standards or not using the mandatory safety equipments 

Withhold Grade/ Salary Increment of One Year 
  • For taking the company properties out without approval or giving unauthorized access to outsiders to the company system or properties
  • For trying to mismatch the organizational financial transactions
  • For willful destructions of the company properties
  • For malicious destruction of safety arrangements and affecting the flow of foods, water, telephone, electricity inside the workplace

Suspension from Work
Employees can be suspended for up to four months with or without compensation in the following cases.
  • Suspension without compensation for the period of Imprisonment for criminal abduct or moral act but the compensation should be provided if the employee proves innocent, provided that the case is filled by the concerned employer
  • Suspension with half compensation if the case is filed against the employee by the concerned employer and continuity of employment has a possibility of influencing the case or destroying the evidence. Full compensation and allowable benefits should be provided in the employee proven innocent by the court.


Termination
The following acts are eligible for the termination of the respective employees.
  • Use of arms or ammunition, fight and attack on the people inside organization, vandalism or encourage the destruction
  • Theft, corruption and willful destruction of organizational assets,
  • Mismanagement of financial transactions or submission of false documents to get hired
  • Absent for more than 30 days without approving the leave
  • Disclosure of organizational formula or secrets information to competitors or outsiders or establishment of competing business
  • Associated with any moral suit or criminal conduct
  • Appear to work with alcoholic drinks or drugs or charged with sexual harassment
  • Charged with the disciplinary actions of waring, or withholding salary/ grade increment or pay cut for more than two times in three years
  • Performed unsatisfactorily for three consecutive performance evaluations, seven days of time shall be provided to the employee to provide clarification, however.
  • In case of case filed against the employee except the case filled by the employer, employee can be terminated after exceeding the suspension period of 90 days


Notes to Disciplinary Actions
  • The employee shall be provided the opportunity to prove himself innocent before taking any disciplinary action with the notice including the magnitude of punishment
  • Disciplinary action shall be taking within two months of malicious conducts and the decision shall be finalized within 1 month after starting the process of taking action
  • Employer can take no disciplinary action against the lawful strikes but no salary is required to provide against the unlawful strikes
  • Salary can be deducted to the amount equivalent to the book value of assets or properties willfully destroyed by the employee


Termination of Contract other than the Disciplinary Actions
  • Employees under probation period can be terminated at any time for unsatisfactory performance
  • Wages based employees can be terminated at any time and those of time and task based employees are terminated after the completion of stated time and task respectively.
  • After acceptance of resignation or automatically after 15 days of providing resignation
  • Employees with severe physical or mental injuries with no position to continue the job as per the prescriptions of certified doctors, if not the prescription from the doctors the employee cannot be terminated for six months.
  • Employees with occupational injuries cannot be terminated upto one year of incident, full compensation is to be provided unless covered by social security fund


Downsizing of the Organization
The company can cut the employees, downsize or rightsize the organization because of financial problems, mergers or partial or full shutdown of the organization for various reasons. Organizations with more than 10 employees shall have to consider the following for downsizing.
  • 30 days of advance notice of employee downsizing to be provided to the trade union, labor relation committee or employees with the probable date of exercising employee cut, expected numbers of employees cut along with the reasons of the same
  • The meeting between employer and authorized employee representatives shall decide the alternatives and base of employee cut
  • The plan of the management/ employer shall be provided to the labor office if the authorized labor union or labor relation committee refuse the dialogue or if agreement is not reached        Employee cut off priority

 Employee Cut-off Priority 
           - Foreign employees 
           - Employee with more disciplinary actions and punishment
           - Employee with poor performance appraisal record
           - Latest joined employees
           - Others with detailed clarification and reasons to go for downsizing
           - Representatives of collective bargaining and authorized labor union get last priority
  • Compensation is to be provided equivalent to one month of basic salary for every year s/he worked for the same organization and proportionally, if not provided by social security fund
  • Compensation and other facilities should be settled within 15 days of termination of contract, otherwise the compensation shall be provided for the period until the compensation is settled.
  • Downsized employees get first priority if the organization needs to recruit new employees or restart the operation, but it is not mandatory to reappoint if not the skills are promising as per the changing business condition 
  • A notice should be provided through the website, job portal and national newspaper and shall have to wait for 15 days for employees to respond.

Notification and Compensation 
  • Except for the case of disciplinary action and employees under probation period, notification of termination shall be provided in advance of one month for full time employment and that of 1 day and 7 days for the employees with contract up to four weeks and four weeks to one year, respectively.
  • The compensation equivalent to aforesaid notice period shall be provided to the employees, terminated without stated advance notification.

The provisions of taking disciplinary actions and terminating the employees are balanced from the perspectives of employees and employers. The labor act of 2017 was heartily welcomed by both employer and employees. It has helped to create a healthy labor market through cordial, productive and professional relationship between employers and employees.