Real Solutions Pvt Ltd organised 74th HR Kurakani on 26th of December on the key topic ‘HR Audit: Process Insights. The session was attended by numerous HR professionals from various organizations in Nepal and was moderated by reputed practitioner of HR - Mr.Bishal Dahal.
The Labor Act 2017 ("Labor Act") under Section 100 has envisaged the requirement of conducting Labor Audit by all Enterprises. Pursuant to Rule 56 of the Labor Rules, the Enterprises are required to conduct Labor Audit by the end of Nepali Month of Poush (Mid-January) every year. The Labor Audit should be conducted as per the criteria defined by the Ministry of Labor. Using the power conferred by Rule 56, the Ministry of Labor, Employment and Social Security has issued the Labor Audit Standard 2018 ("Labor Audit Standard" or "Standard"). The Labor Audit Standard has come into implementation effective from November 22, 2018.
Starting the session with brief introduction, Mr Dahal said “A human resource audit usually involves review of all HR policies, practices and procedures whether or not they are formal.” Further elaborating he said, HR audits helps organization to determine whether human capital is effectively used, where human capital is incorrectly – or unlawfully — used, and how to improve human capital return on investment. It includes reviewing documents, interviewing human resources professionals from different areas of the organization, interviewing some manager at different level of the organization, and possibly interviewing in-house employment counsel.
Addressing the current labour act of 2075, they shared that it is mandatory for employers to conduct HR audit by the end of the month of Poush every year as per the criteria defined by Ministry of Labor.
The participants at the Kurakani took to discussing each of the activities mention in the Format of Labor Audit Report that has been provided under Schedule 10 of Labor Rules in detail and agreed that their implementation would be somehow beneficial.
1. Description of the workforce
2. Compliance report of Labor Act – 2074 and Labor Rule 2075
- Stipulate if all
employees/ worker shall be offered Contract or Appointment letter pursuantto
the Section 11 of act. If such letter has not been provided articulate the
reason.
- Stipulate if
provision of Schedule- 6 of Act Schedule- 3 of rule shall be adhere while
non-Nepalese Citizen employee/worker was appointed. If such approval of the
Department of Labor has not been provided articulate the reason.
- Stipulate if
minor worker (less than 18 years) had been deployed in the work/production
along with description of working condition.
- Stipulate if
provision of Section- 16 and Section – 17 of shall be adhered while Trainee has
been deployed in the work.
- Stipulate if
provision of Section -18 of Act shall be adhered that salary of other facility
has been awarded while Apprentice has been deployed in the work.
- Stipulate if as
per provision of Schedule- 5 of Act that facility and social security has been
awarded while part Time Worker/Employee has been deployed in the work.
- Stipulate as per
provision of Section- 28 of Act that if worker/Employee has been deployed only
8 hours a day/ 48 hours a week in the work.
- Stipulate as per
provision of Section -31 of Act that if Worker/Employee has been provided 30
minutes rest after 5 hours of work; and if over time has been provided for
extra work.
- Stipulate as per
provision of Section 33 of Act that female worker/Employee has been provided
transportation facility while they are working after dusk and before sunrise.
- If
worker/employee has been given less than based salary as per provision.
- Articulate
monthly average base salary (Average figure of basic salary, allowances,
incentive and facilities)
- Stipulate as per
provision of Section- 36 of Act that if annual increment/grade has been awarded
to the worker/employee.
- Detail that if
salary has been disburse more than one-month gap. (if yes state the reason)
- Stipulate
whether worker/employee has been provided a Festive Bonus as per provision of Section
37 of Act.
- Stipulate
whether worker/employee has been provided following leave as per provision of
schedule – 9 of Act (specify the number or days- Weekly day off/Public
Holiday/Home Leave/Sick Leave/Maternity Leave/Paternity Leave/Obsequies Leave/
Substitute Leave)
- Note that Enterprise
whether deposit provident fund and social security fund according to Section-
52. If money is not deposited disclose how it is provisioned or uses.
- Note that
Enterprise whether deposit Gratuity and Social Security Fund according to
Section -53. If money is not deposited disclose how it is provisioned or uses.
- As per provision
of Section -54 of act specify that whether medical insurance is arranged or
not.
- As per provision
of Section-55 of Act Specify that whether all types of accident is covered or
not.
- Verify that if
outsource worker/employee is working or not. Specify the permit number and date
of such outsourcing company. Also verify that whether worker and employee are
given pay and perk as well as if timely monitoring from the concern department
has been done according to Section- 59 of act.
- Specify that if
Health and Safety policy is adopted or not as per provision of Section -68 of
Act.
- According to Section
– 74 of Act, verify whether Health and Safety Committee has been form and meet
accordingly.
- According to Section
– 108 of act, verify whether Internal Management By-laws in instigated or not.
- Specify that
whether by law is distributed to worker/employee. Also verify if same is
correspond to the labor office.
- According to Section-
111 of act, verify whether Labor Relation Committee is formed and meet
accordingly. State last meeting date within the said fiscal year.
- According to Section
-112 of Act, verify whether Performance Appraisal system has been introduced or
not.
- According to Section
-113 of act, verify whether individual claim is put forward to the management
and how many were resolved.
- Specify if,
collective bargaining is conducted this fiscal year.
- Specify with
date if collective bargaining has been done. Also, state that if bargaining is
still going on or in the meantime, if strike or lockout or any other event was
occurred.
- State with date that if any of agreement or decision are yet to be executed from the outcome of Collective Bargaining. If yet to be come into force then state the due date that is going to be happen.
3. Provision related to the Define Contribution Social Security of Act 2074 and the Define Contribution Social Security Rule – 2074
- State if
Enterprise is register with Social Security Fund or not.
- State if money is deposited in Social Security Fund or not.
4. Provision related to the Bonus Act – 2030 and Bonus Rule 2039
- Whether
Enterprise fall under the purview of Bonus Act in order to distributing Bonus
to it Employee/Worker
- If Enterprise is
fall under the purview of Bonus Act, describe if Bonus is distributed according
to the provision.
- Remark if last
fiscal year statutory bonus is yet to distribute.
5. Provision related to Trade Union Act- 2049 and Trade Union Rule 2050
- Articulate if
Trade Union is register and functional?
- Articulate if
Trade Union’s election has been conducted?
6. Any other matter that Enterprise would like to supplement
- Articulate whether Occupational Health and Safety policy is adopted. And if any independent mechanism is arranged for its audit.
In additions, auditor can also mentions points he would like to purpose for betterment. The name and signature of the person filling up the form and the one who approves the report is mandatory.
During the discussion on harassment, HR Practitioner said that it can be a trying and disappointing time when an employee files a complaint of harassment or bullying. HR needs to get into action mode immediately in such cases, they added. Professional also noted that Health and safety standard differs according to the nature of organization. They agreed that Health & safety policy of Construction Company might not align with organization like telecommunication and hence it differs on nature of job as well.
Addressing the current scenario, participants in the Kurakani shared that when country has moved to provinces, Local body has the authority to make laws which can be more challenging in the upcoming days to the professionals.
At the Kurakani, distinguished speakers
addressed that all the HR professional are not from the legal background but
there are numerous laws and regulations governing the employment relationship
and HR professionals must understand and navigate in order to help ensure their
organizations avoid costly fines and other penalties, including the potential
harm to the organization’s reputation.
Glimpses of the Event:
www.facebook.com/realsolutionsnepal/posts/10157382227566412
If you require any further assistance in regard to HR auditing, you can contact Real Solutions Pvt Ltd at +977-1-4106706/4106708.
