Unions at a crossroads
The current debate in Nepal over dissolving trade unions has become one of the most consequential constitutional and labor policy questions of 2026. The government's reform agenda reportedly includes measures to abolish party-affiliated trade unions in the name of improving governance and ending institutional interference. It is argued that this will strengthen governance and reduce encroachment between institutions. However, concerns about the politicisation of unions remain both valid and understandable. Simply abolishing all trade unions would contravene Nepal's constitution, labor laws, and international obligations. The real question is not whether unions should exist, but how they can be improved.
A useful perspective is offered in the Shift Project’s article, Realizing Trade Union Rights: Diagnosing Barriers and Moving to Action. It argues that freedom of association and collective bargaining should not be viewed merely as labor entitlements, but as ‘enabling rights’ that support fair wages, safe working conditions, dignity in the workplace, and protection against discrimination. It further contends that institutional failures arise not from the existence of unions themselves, but from the failure of governments and employers to take meaningful, proactive steps to ensure these rights function effectively in practice.
That insight is highly relevant to Nepal.
Nepal's labor movement has long suffered from fragmentation and political capture. Multiple unions tied to rival political parties often operate within the same enterprise or sector. Rather than bargaining collectively on wages, safety, and benefits, some unions have functioned as extensions of party competition. This has weakened productivity, discouraged investment, divided workers, and eroded public sympathy for organised labor. Even many ordinary citizens now distinguish between genuine worker representation and partisan unionism.
Public dissatisfaction with politicised unions should not, however, be treated as lawful justification for abolishing union rights altogether. Article 34(3) of the Constitution of Nepal guarantees workers the right to form and join trade unions and to engage in collective bargaining. This is not a matter of shifting policy preference that can be withdrawn by executive announcement; it is a fundamental constitutional protection. Similarly, Nepal’s Labor Act recognises trade unions, collective bargaining mechanisms, and workplace representation—safeguards introduced to maintain industrial peace through negotiation rather than coercion. Any attempt to dissolve unions through administrative action would undermine the rule of law and create uncertainty within the labor market.
The international dimension is equally important. Nepal is a member of the International Labor Organization and has ratified core conventions safeguarding freedom of association and collective bargaining, including Convention No. 87 and Convention No. 98. These instruments not only prevent governments from suppressing unions, but impose a positive obligation to create conditions in which workers can organise without fear of retaliation. Measures that hinder independent union formation could constitute a breach of Nepal’s international commitments and weaken its standing in the international community. Any perception that Nepal is retreating from these obligations may carry wider consequences for its reputation and diplomatic relationships.
There are also significant economic implications. Countries seeking foreign investment, export expansion, and integration into global supply chains are increasingly assessed on the quality of their labor governance. International buyers and responsible investors routinely consider whether states respect worker representation, due process, and social dialogue. A government perceived as dismantling unions may signal instability and regulatory uncertainty rather than credible reform.
That said, defenders of the status quo should also be cautious. Nepal’s current union structure does need change. Too often, workers’ institutions have become vehicles for political patronage. Strikes are sometimes called without exhausting dialogue. Leadership can grow unaccountable. In parts of the public sector, union influence has been linked to resistance against performance management and administrative reform. These are legitimate governance concerns.
But law-based reform is different from abolition. Nepal should adopt a balanced approach: depoliticizing trade unions while preserving constitutionally protected labor rights. First, legislation could prohibit formal affiliations between registered trade unions and political parties. Unions should represent workers’ interests, not function as auxiliary branches of partisan organisations. Second, stronger financial transparency requirements, including audited accounts, disclosure of funding sources, and regular democratic internal elections, would improve accountability. Third, sectoral consolidation could be encouraged to address fragmentation, for instance through representative bargaining councils in place of competing workplace-level unions.
Fourth, strike regulation could be modernised in a manner consistent with international labor standards. In essential public services, this might include minimum service requirements, cooling-off periods, structured mediation, and advance notice obligations—measures that balance the right to industrial action with continuity of essential services. Fifth, institutional dispute resolution mechanisms, particularly labor courts and mediation bodies, should be strengthened so that employment conflicts are resolved through formal legal channels rather than public confrontation.
Most importantly, any meaningful reform must be built on genuine social dialogue. Reforms imposed unilaterally are more likely to generate resistance and mistrust; those developed through consultation with workers, employers, and civil society are more likely to achieve legitimacy and durable implementation.
As labor relations scholarship has consistently shown, progress occurs when institutions move beyond symbolic commitments and take meaningful action. Nepal would do well to embrace this lesson. If unions are dysfunctional, the response should be to redesign incentives and improve governance structures. If partisan capture is the central concern, mechanisms should be introduced to sever political control. If public services are disrupted, conduct should be regulated through proportionate legal measures. What should not be discarded is the constitutional right itself.
History demonstrates that suppressing worker voice does not eliminate grievances—it often drives them into informal channels, where they become more volatile and harder to manage. Democratic systems require organised mechanisms through which labor concerns can be expressed and addressed. Independent, accountable trade unions remain among the most important of those mechanisms.
Nepal’s deeper problem is not too much democratic participation within institutions, but too little institutional discipline. Removing unions while leaving patronage networks intact would simply shift power from one informal actor to another.
Nepal today stands at a crossroads between frustration-driven shortcuts and principled reform. Dissolving trade unions may appear decisive, but it would likely trigger constitutional litigation, labor unrest, and international criticism. Reforming unions through law, transparency, and democratic accountability would be harder—but considerably wiser.
The real question is what kind of trade unions Nepal wants: ones that serve the interests of powerful politicians, or ones that genuinely represent the needs of workers and the broader public. In a country that values democracy, the answer ought to be clear. A mature democracy puts the needs of its people first
The author is a section officer at the supreme court of Nepal
