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Training cum Workshop on Challenges of Informal Economy for Trade Unions

Organised by Democratic Confederation of Nepalese Trade unions (DECONT)

27 –28 March 2005

Jawlakhel, Lalitpur

Narrative Report


In developing countries like Nepal, the major sector of informal job is agriculture where around 80 percent of total population is involved. And, they depend on traditional agriculture as main occupation since the development of industrial and modern technologies is very slow. At the same time, Nepal labor market is dominated by informal sector as 96 percent of labour force is engaged in this sector. The employers of formal sectors are enthusiastic to convert formal workers into the informal one. In today's globalized world, the available formal jobs are also disintegrating into small informal pieces turning the permanent jobs into contracts and sub-contracts. The main benefit for the employer is that they will not be responsible for the extra-welfare of workers engaged in workplace. Not only that, the skilled labor from cross-boarder are displacing the native workers. The possibility for further education, skill promotion and vocational training for the native workers is extremely poor. Therefore, the trend of employing contract labor in permanent job is ever increasing and the job opportunities for the workers are also declining thus pressurizing the flow of labor in informal economy.

In these circumstances, recognizing hard time for national economy in general and challenges for trade union in organizing the informal sector workers in particular, Democratic Confederation of Nepalese Trade Unions (DECONT) from the very beginning of its founding is laying stress on organizing the informal sector economy. DECONT is very much worried about the question of workers' issues—such as integration of the workers of informal sectors into trade union movement, leadership development, capacity building of women workers and protection of their rights and welfare, establishing the dignity of workforce and social security provisions. It believes that keeping the majority of workers out of trade unions' reach, can make the union movement weak and deprive the majority of workers from its benefits. Due to this reason, DECONT is emphasizing the unionization of workers from informal economy from the beginning. And, in year 2004, we had also organized a national level consultative workshop on 'Challenges of Informal Economy for Trade Unions' in cooperation with FES on 27-28 March 2005 at Jawalkhel, Lalitpur. Altogether, 40 participants from different affiliated unions of DECONT and also from district committees took part in the workshop.

Inaugural Ceremony

A brief inaugural session was organized. The chief guest for the ceremony was Bro. R. B. Raut, President of DECONT and Bro. Dev Raj Dahal, Head of FES Nepal Office was present as special guest. Also presented at the occasion were Bro. Khila Nath Dahal, General Secretary, Bro. Dhurba Chandra Gautam, Treasurer and Sister Daniela Hinze. Addressing the ceremony, Bro. Raut said that union should pay serious attention on organizing informal sector workers and highlighted the present situation of informal economy in Nepali context and the challenges faced by the trade unions. He further said that to reduce the impact of informal economy, trade union must set themselves free from political control of parties. Likewise, addressing the inaugural session Bro. Dev Raj Dahal said that DECONT from the beginning had started to work for the workers of informal economy and it is need of time that such efforts and initiation are quite remarkable for the rights and welfare of workers from informal economy. He also stated that DECONT should continue to modernize the trade union movement in the context of rapid technological and financial globalization. As formal economy is declining very rapidly, union has additional responsibility to seek new areas, new issues and renovate its strategies of solidarity and collective action. Kanowledge, tools and skills must be modernized to cope with the emerging challenges. Bro. K. N. Dahal and Bro. D. C. Gautam described about the DECONTs' activities and policies for integrating workers from informal economy into trade union movement. Likewise, Sister Daniela Hinze shared her experience regarding current economic situation in Germany and impact of that on the workers out there. She explained the nature of social market economy and what lesions can be learned from that.

Business session

After the inaugural session, a brief introduction session was held where participants, presented guests and resource persons introduced themselves on the basis of personal as well as organizational background. Thereafter, formal workshop was started with session on 'Overview of Informal Economy and Role of Trade Unions in Nepalese Scenario', which was facilitated by Bro. Dhurba Chnadra Gautam. He described the background of informal economy, present situation of workforce in informal economy, problems of those workers, planning and strategic problems, opportunities and challenges for trade unions, initiation of DECONT in informal economy etc. As well as he also put forward few policy recommendations for socio-economic reforms of the workers of informal economy. After the deliberation, an open discussion was held for about 25 minutes in which 13 participants took part and expressed their grassroots experiences.

The next session of the workshop was on 'Legal Provisions of Informal economy' that was facilitated by Bro. Ghanashyam Subedi where he underlined the definition of informal economy based on legal perspective, data on workers engaged in different sectors of informal economy, present legal status of labour or other legislation that to some extent cater the rights and issues of informal workers. He also discussed about the existing legislative provisions both national and international and their shortcomings to address the rights and welfare of informal workers. He also furnished few recommendations to improve the workers' status under the informal economy. Thereafter, an open discussion was held for around 20 minutes and 14 participants raised their concern on the legal aspects.

The next session of the day was on 'Challenges of Trade Unions in Informal Economy' that was facilitated by Sis. Amuda Shrestha. In this session she discussed about some important challenges thrown by informal economy for trade unions. Thereafter, a group discussion was designed to collect the ideas and experience of union leaders regarding challenges informal economy for them at grass root level. Thereafter, the participants were divided into four groups and assigned the task to prepare group reports on the subject matter. The group discussion was jointly facilitated by Bro. Dahal and Sis. Shrestha.

Second Day

The first session of the next day was started with the presentation of group reports on challenges of trade unions in informal economy. All four groups presented their group discussions' outcome respectively. The discussion was also held on the group reports and a number of issues were raised. The details of group reports are attached at the bottom of report. After it, next session was started and that was on 'Sharing experiences in organizing the unorganized', which was facilitated by Bro. Krishna Prasad Poudel where participants discussed about how the workers of varied informal sectors could be organized, capacitated and integrated under trade unions' structure. During the session he also discussed some examples of successful organizing strategies for informal workers in other countries as well as collected the participants' views about how we can enhance our capacities and integrate the informal sectors into a viable framework and contribute to its sound development.

The next session of the program was on "DECONTs' Policies and Organizing Strategies for Informal Sectors" and this session was facilitated by Bro. Khila Nath Dahal. During the session he briefed about the policies adopted by DECONT to organize the informal workers and also activities carried out by DECONT in this aspect through different national unions. He also discussed about the efforts of DECONT to strengthen the capacity building of such national unions. It has been also discussed about possible strategy to organize more and more workers from such sectors to make the trade union movement much democratic, stronger and inclusive. Thereafter an open discussion was held for around 25 minutes and 22 participants took part sharing their experiences.

The last session of the workshop was on "Developing Future Action Plan for Organizing Unorganized Workers of Informal Economy." It was primarily a brainstorming session where participants were asked to develop an action-oriented workplan to organize informal sector workers in their respective unions. The session was facilitated by Bro. Dahal and Bro. Poudel. For the group discussion the participants were divided into four groups and following tasks were assigned to them for possible action plan:

  1. List out the priority sectors under informal economy.
  2. Chalk out the possible activities of unions to meet the challenges.
  3. Define the target groups for organizing.

After the group discussion and report preparation, the report was summed up by Bro. Dahal. The summary of the Action Plan is presented hereunder. Thereafter, a brief closing session was held where some central committee members of DECONT as well as Bro. Dev Raj Dahal, Head of FES Nepal Office spotlighted some relevant ideas. They all hoped that the formulated action plan could help to tap those opportunities.

Group Discussion 2:

Workplan for organizing informal sectors' workers

Priority Sector










Tea Plantation

Street Vendors

Home-based Workers













  • Identify workers
  • Keeping records of workers
  • Raise awareness on TU rights, workers' rights, gender etc.
  • Provide trade union education
  • Train about importance of organization Enroll into and increase membership
  • Create skill manpower
  • Emphasize the use of modern agricultural tools
  • Give information on OSH/PPE, HIV-AIDS.
  • Pressurize for the benefits of social security, insurance.
  • Health checkup facilities.
  • Campaign/Action against use of child labour.
  • Vocational/skill upgrading trainings.
  • Income generating activities.
1 Year
Respective Affiliated Unions in cooperation with DECONT

Group Discussion: 1

Outcomes of Group Discussion on Challenges of Informal Economy for Trade Unions

Possible Solutions
Role of DECONT
No legal recognition to workers of informal economy for organizing. Amend in labour act and implement it in informal economy also. Take initiation
No salary/wage determined by labour act. Pressurize government to implement labour act. Pressurize government
No mechanism for registration of informal sectors' workers. Registration of workers should be done. Take initiation
Lack of skill training and skill manpower. Produce skilled manpower providing skill development trainings. Support and manage support
No social security and insurance facilities. Social security and insurance should be provided. Take initiation
Informalization of limited formal sectors. Discourage privatization, providing protection by state. Take initiation
Lack of wide labour market Create wider labour market Take initiation
No opportunities for collective bargaining. Collective bargaining opportunities should be ensured. Play the role of mediators
Inequality in wages Provide equal wages eliminating inequality. Take initiation
Wide contracting system Contracting system must be abolished. Pressurize
Lack of collectivity Unify the scattered labour forces. Provide support
No information regarding OSH Appropriate trainings must be provided. Provide Training
Wide use of child labour Complete elimination of child labour through implementation of laws. Pressurize and create awareness
Uncertainty in works. State should provide informal education for informal workers. Bring informal workers under unions' framework and provide trade union education.
Beyond the periphery of labour act. Unite to pressurize state. Trade union should widely pressurize for managing minimum wage, working hour, registration etc of informal workers.
Lack of workers' registration. Wages should be determined based on time/market situation.
Not getting minimum benefits determined by labour act. Integrate workers from informal sectors under trade unions' umbrella. To aware them on social, economical and political aspect Awareness programme should be implemented.
Lack of determination of certain standards on migrant workers. Carry out awareness raising programme. Health checkup of workers must done quarterly.
Poverty Strict criteria for giving permission for the establishment of enterprises and monitoring them basically on the issues of workers' benefits and rights Pressurize state for solving the problems of informal workers identifying their problems, challenges and means for their solutions.
Lack of Education. There should be national policy to increase employment for poverty eradication and that must have strong implementation side. Easy available and well management of education and health facilities for the children of informal workers.
Lack of Maternity Protection Rights Free education upto secondary level. Workers must have representation while formulating labour policy and in implementing it
No facility of child care center Contractors must be registered with HMG/N Acceptance of trade unions must sought of trade unions while contracting.
  Self-employing training must provide followed by loan for trained personnel. Facilities of loans for trained self-employed workers through recommendation of trade unions
  There must be childcare center at VDC/Municipality and labour policy must address the issues regarding maternity protection. Identify skills at local level.
  The revenue collected from the workers must be expended on their social security. Create pressure to reform labour policy.
    Trade unions must have representation while expending revenue for workers' social security.
    Represent workers while formulating legislation for informal workers and pressurize for implementation.
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