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General Note on Redundancy and Compliance

Sunday - Sep 8, 2024 (Updated: Jun 16, 2025)
Business Law
This document outlines the legal framework and compliance procedures for employee redundancy, layoff, and retrenchment. It emphasizes relevant laws, consultation requirements with labor unions, and procedural steps to ensure compliance with labor laws during workforce reduction. Specific provisions include notifying the Labor Office, consulting trade unions, and detailing grounds and schedules for retrenchment.
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Understanding Redundancy and Compliance in the Workplace

Navigating redundancy in the workplace requires a clear understanding of legal compliance and procedural fairness. This guide provides an overview of the key aspects employers need to consider, from layoff and retrenchment to engaging with trade unions.

  1. Relevant Laws and Compliance
    Employers must stay informed of the specific laws governing redundancy. Ensuring adherence to these legal standards is essential to avoid disputes and ensure fair treatment.
  2. Layoff vs. Retrenchment
    Understanding the difference between layoff and retrenchment is crucial. Layoffs are often temporary, while retrenchment usually involves a permanent reduction in workforce due to business downsizing.
  3. The Importance of Prior Notice and Consultation
    Before retrenching employees, it's mandatory to consult with the trade union or labor committee and provide prior notice to the Labor Office. These steps are vital to ensure all parties are informed and engaged in finding alternatives, if possible.
  4. Detailing the Retrenchment Process
    Employers must outline the grounds, date, and number of employees affected by retrenchment, ensuring transparency and clarity in the process.

Adhering to redundancy provisions not only aligns with legal requirements but also fosters a respectful and responsible work environment during challenging transitions.

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    Narayan Chaulagain
    Managing Partner

Practice Areas

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Business Law

Infinity & Partners offers comprehensive corporate governance support in Nepal, focusing on corporate compliance, education law, employment law, foreign investment, infrastructure, information technology, intellectual property, private equity, and taxation. Our services include regulatory compliance, legal advisory for educational institutions, foreign investment facilitation, tax dispute management, and guidance for infrastructure projects and private equity ventures.
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Dispute Resolution

Infinity & Partners provides comprehensive dispute resolution services in Nepal, specializing in both litigation and arbitration across various legal areas, including corporate and constitutional matters. The firm offers expert representation, document preparation, and strategic advocacy for complex disputes in both domestic and international contexts.
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Legal Reform

Infinity & Partners offers expert legal reform advisory in Nepal, specializing in commercial law, law drafting, policy development, and regulatory alignment with global best practices for government and local authorities.
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Civil Law

Infinity & Partners offers comprehensive legal services in Nepal, specializing in civil law, family law, and real estate law under the Muluki Civil Code, 2018. Our expertise includes contract disputes, marriage registration, property division, and land acquisition, ensuring clients navigate the legal landscape effectively.
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