Nepal foreign employment recruitment disputes

Nepal’s foreign employment sector has faced significant tension regarding recruitment regulations and agency rights. Initially, the Nepal Association of Foreign Employment Agencies (NAFEA) planned protests and recruitment halts to address a 15-point list of demands. These demands included the withdrawal of Department of Foreign Employment actions against certain companies, amendments to the Foreign Employment Act 2007 for cost transparency, and diplomatic intervention to combat recruitment monopolies in countries like Saudi Arabia, the United Arab Emirates, and Malaysia.

Following an agreement with the Ministry of Labour, Employment and Social Security, where the government pledged to address these demands within 45 days, the agencies called off their protests.

However, new challenges emerged when Malaysia implemented the Foreign Worker Centralised Management System (FWCMS). This system limits Nepali worker recruitment to a specific list of 25 approved agencies. Industry representatives have criticized the move, claiming the selection process lacks transparency and creates a “syndicate” that prevents other legally operating companies from competing. In response, the Nepali Ministry of Youth, Labour and Employment has begun consulting with the selected agencies and has engaged with Malaysia’s acting ambassador to discuss the implications of the new system.

Following controversy, the Nepali government has launched an investigation into the recruitment process. The Ministry of Youth, Labour and Employment directed the Department of Foreign Employment to probe the 25 authorized agencies. While Malaysia’s FWCMS recently listed an additional 250 Nepali agencies as sub-agents under the original 25, NAFEA maintains this arrangement creates a syndicate that may violate constitutional principles of free competition. Department Director General Navaraj Dhakal stated the investigation aims to determine if the arrangement obstructs legal competition. The Department may request the Nepali Embassy in Malaysia to suspend document attestation and pre-approval processes until the matter is resolved.