In Nepal, the process of employment termination is governed by the Labour Act 2074 BS (2017) and the Labour Rule 2075 BS (2018). These legal frameworks ensure fairness and transparency in the termination of employment. The key points of the termination process are outlined below:

• Reasonable grounds for termination: Employment cannot be terminated under any circumstances unless it complies with the provisions of the Labour Act and the rules or bye-laws framed under it. The employer must provide proper and valid reasons for terminating the employment.

• Notice to be given:  Except in cases of misconduct, both the employer and employee must provide notice to each other before terminating the employment contract. The notice period varies depending on the duration of employment:
  • At least one day’s notice for employment of up to four weeks.
  • At least seven days’ notice for employment between four weeks and one year.
  • At least thirty days’ notice for employment exceeding one year.

• Failure to provide notice: If the employer fails to provide the required notice, they must compensate the employee with an amount equal to the remuneration for the notice period. Conversely, if the employee fails to provide notice, the employer may deduct an amount equal to the remuneration for the notice period.

• Opportunity for clarification in case of Misconduct: In cases of employee misconduct, the employer must provide a notice to the employee, allowing them to submit clarification within seven days before any punishment is imposed. The notice must specify the alleged misconduct and the potential consequences if the misconduct is proven.

• Issuance of Certificate of Employment: Upon termination, the employer must issue a certificate of employment upon request. This certificate should detail the employee’s period of service and the position held.

Hence, These provisions are designed to protect the rights of employees while ensuring a structured and fair process for terminating employment relationships. Both employers and employees must adhere to these legal requirements to ensure that the termination process is just and transparent.

Disclaimer: This note is provided solely for general information and does not constitute legal opinion. For specific legal query, please seek professional counsel.