“You’re fired.” Sounds dramatic, right? But in Nepal, firing someone isn’t as simple as a snap decision or dramatic statement. If you’re thinking of letting go of an employee, make sure you follow the process, or it could cost you—literally.
Nepal’s Labour Act, 2074 lays down the rules about employment termination, and firing an employee without the right process is more than just a bad look—it’s illegal. Let’s break it down so both employers and employees understand how termination should actually work in Nepal.
The Law Is Clear: No Firing Without a Reason
According to Section 139 of the Labour Act, no job can be terminated without a “proper and sufficient reason.” Feeling that someone isn’t the right fit for the job? That’s not enough. You need to back up the decision with clear grounds, a proper process, and thorough records. Here’s how termination is supposed to go down:
1. Time-Based or Task-Based Contracts (Sec 140)
Termination is straightforward in this case:
- Time-based contract: The contract ends when the term expires.
- Task-based contract: The contract ends once the specific task or project is completed.
2. Voluntary Resignation (Sec 141)
If an employee decides to resign, the process is simple:
- The resignation must be in writing.
- The employer must respond within 15 days. If not, the resignation is automatically approved.
- Both parties can mutually cancel the resignation.
3. Termination for Poor Performance (Sec 142)
Firing someone for poor performance isn’t a quick decision:
- The employee must have received 3 or more years of poor performance evaluations.
- The evaluations should be based on a legally established system.
- The employer must give written notice, along with a 7-day clarification period (for businesses with more than 10 employees).
4. Termination on Health Grounds (Sec 143)
An employee can only be terminated on health grounds if:
- A doctor certifies that the employee is unfit for the job.
- The illness must not be work-related (if it is, stricter protections apply).
- If the employee is unfit for their role, but can be reassigned to another, they must be reassigned.
- Salary protection is provided during illness.
5. Notice Periods (Sec 144)
Notice periods depend on the length of service:
- Less than 1 month of service = 1 day notice.
- 1 month to 1 year = 7 days notice.
- More than 1 year = 30 days notice.
If the employer doesn’t provide notice, they must pay instead.
For Employers: The Golden Rule
If you want to fire someone, it’s not enough to cite a “bad attitude” or simply feel like they aren’t working out. Without proper proof, notice, and process, terminating an employee can lead to unlawful dismissal.
This means the Labour Office or the Court can reverse the termination and demand back pay.
Pro tip for employers: Always keep thorough documentation. Conduct proper performance reviews. Issue written notices. And before you act impulsively, consult with a legal expert.
For Employees: Know Your Rights
If you’re being let go without a proper cause, process, or compensation, you have the right to challenge it. The law is on your side. If the termination doesn’t follow legal procedures, you can take it to the Labour Office or court and seek justice.
Conclusion: Process Matters
Termination of employment is not something that can be done on a whim. There are clear rules laid out in Nepal’s Labour Act to protect both employers and employees. So whether you’re an employer thinking about letting someone go or an employee facing termination, make sure you understand the process. After all, “You’re fired” shouldn’t be a free pass for illegal actions.
Ever witnessed a termination gone completely sideways? Share your experience in the comments!
