Two companies with multinational investors are once again facing labour problems: KFC and Pizza Hut have been shut for a week now. Meanwhile, workers of Thai Airways in Kathmandu have given the airline an ultimatum to fulfil various demands. Once more, there are serious concerns about Nepal's investment climate at a time when the country needs to attract more foreign investors to create employment and raise the economic growth rate.
There is an urgent need to diversify from remittance inflows to industrialise through foreign direct investment and provide employment to 400,000 young Nepalis who enter the labour force every year. This is the wrong time to be letting labour problems scare away foreign investment. Both multinational restaurant chains had been providing salaries and facilities that went beyond the government-stipulated minimum. In the past there have been similar demands from workers at other companies for terms exceeding the government's standards.
This raises serious questions about the implementation of current labour laws, and what the response should be when this happens. For example, the Thai Airways workers have the absurd demand that the airline should even pay their income tax. Many industries have been forced to close because of excessive demands from unions affiliated to political parties. Labour relations have been soured by politicised unions, splits in trade unions, the lack of discipline and rule of law, and weak implementation of regulations. There are many examples of political leaders showing up at negotiations between their affiliated unions and management. This problem has arisen because the unions are all fraternal organisations affiliated to political parties.
Without delinking politics from the trade unions, there will continue to be problems. Political leaders who give speeches extolling the need for foreign investment are also protecting unions that needlessly harass investors. As long as unions are beholden to political parties, neither the workers nor managements will benefit. There are limits to strikes and demands, they should follow the laws of the land. Management must also treat workers as their investment, and it requires a mutual desire to work for the benefit of both. Problems should be resolved within the companies without political interference. Using threats and violence is not a solution, and the state should not hesitate to crackdown on those who violate the law.