Nepali Times
Strictly Business
Labour pangs


These days, one comes across many executives who worry about escalating problems with labour unions. Listening to them, it's clear that their company's labour union is not a problem in and of itself. But it becomes a problem when the union's ambitious leaders, in an effort to show that they are 'doing something to teach the management a lesson' seek support from political parties, who are only too happy to collect dues from additional members.

Soon, strangers call your mobile at all hours, asking for appointments at seedy venues. Militant strangers descend upon your office. They start pounding the table and speaking rudely. You realize that they are not interested in listening to your reasons. And when you say no to their requests, you start getting threats.

As members of Nepal's various labour unions celebrate the dignity of labour on the occasion of May Day today, it's worth examining how corporate executives can hold their own against excessive demands from militant labour.

Fulfill the legal minimums It's no secret that most Nepali companies are notorious for cutting corners when it comes to treating employees fairly as per what's in the law books. Most militant unions, with lawyers who specialise on personnel issues, take advantage of this straightforward fact to grab a company by its jugular.

This produces two effects. First, when criticised about its labour practices, a company gets defensive. When it gets defensive, its language becomes incoherent. When the company's unclear about what it says, that makes it more vulnerable to saying yes to further demands. The other side is often very good at twisting the company's words to extract more concessions.

Second, once the other side succeeds in painting the company as a renegade, it starts winning the public relations battle. Suddenly, in the public mind and in press reports, the story is split into two neat categories: good employees versus the evil management. It's not hard to see which side the public roots for.

The best remedy is to memorise the relevant sections of the Labour Law, and follow them to the hilt. True, many of those sections, such as the ones on hiring and firing, are not particularly friendly to the management. But it's only by fulfilling the legal minimums, and then publicizing the actions widely inside and outside the company, that the management can expect to maintain its confidence when dealing with external union reps.

Due diligence on outsourcing In these times of rising costs, it doesn't make sense for a company to do everything by itself. This means, most companies outsource their non-core tasks to other firms.

But one sad little secret of outsourcing in Nepal is that most local companies are not up to the task, despite their owners' enthusiasm. Besides, all outsourcing tasks are fraught with risks. Often, these companies do not pay their workers well. They also do not treat their workers well. All the while, their employees see that their counterparts at the client companies are doing well. Soon, they want to register themselves as employees of the client. And the surest way to do that is to seek help from a political party to register a union at the client's site. Many well-run companies have thus gotten tangled up in the personnel and the political mess of their outsource partners.

The solution here is to do a thorough due diligence on the outsource partners. True, doing this takes time, and the one you end up with may be more expensive. But the grief this saves you is often worth the high fees.

Dealing with labour unions is not something that is taught at fancy business schools. But for Nepali corporate executives, mastering this skill may be the way to save their jobs and their companies.

(11 JAN 2013 - 17 JAN 2013)