Workers' rights and organized labor were in transition in mid1991 . During the late 1940s and early 1950s, some labor disputes led to strikes and lockouts and labor unions sprang up in various factories. In 1957 the government announced the Industrial Policy of Nepal, under which it undertook the responsibility of promoting, assisting, and regulating industries.

The Factories and Factory Workers' Act of 1959 established rules and regulations to govern labor-management relationships and working conditions in factories. The 1977 amended version of the act provided for a six-day, forty-eight-hour work week, thirty days annually for holidays and fifteen days annually for sick leave, and some health and safety standards and benefits. Implementation of the act, a responsibility of the Ministry of Labor and Social Services, was not always forthcoming, however, and was only somewhat affected by the success of the prodemocracy movement.

A revision of the body of labor laws was pending in mid-1991; it was to include a code that defined and regulated workers' rights. Labor unions, restricted prior to the July 1991 repeal of the Organization and Control Act of 1963, still were limited. Estimates suggested that only approximately 3 percent of the economically active population, or 30 percent of nonagricultural workers, were union members.

Because of limited industrialization, unemployment and particularly underemployment were quite high. In 1977 the National Planning Commission undertook a survey, which determined unemployment to be 5.6 percent in rural areas and almost 6 percent in urban areas. Underemployment was estimated to be about 63 percent in rural areas and about 45 percent in urban areas. In 1981 the Asian Regional Team for Employment Production estimated the unemployment and underemployment rates to range from 21 to 28 percent in the Tarai Region and from 37 to 47 percent in the Hill Region. The availability of nonagricultural employment opportunities in the labor force was reported at approximately 600,000 positions in 1981. Underemployment for all of Nepal was reported to range from 25 to 40 percent in 1987; unemployment nationally stood at 5 percent.

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Source: U.S. Library of Congress