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“Despite all our pleading for change in labour laws, nothing has changed for the better”


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Former EFC Director General and Employers' Senior Specialist Franklyn Amarasinghe 

Panellists former EFC DG, International Labour Organization Employers’ Organisations in East Asia Senior Specialist and Department of Labour Chief Legal Officer Franklyn Amarasinghe, Institute of Chartered Accountants of Sri Lanka President Jagath Perera, Employers’ Federation of Ceylon Director General Kanishka Weerasinghe, Sri Lanka Free Workers’ Union General Secretary Lesley Devendra, Sri Lanka Apparel Exporters Association Chairman Felix Fernando, International Labour Organization Chief Technical Advisor Thomas Kring and employment specialist and Executive Search Managing Director Fayaz Saleem and moderator ICC Sri Lanka Chairman Dinesh Weerakkody – Pix by Lasantha Kumara

 

  • Veteran Franklyn Amerasinghe calls for political will to ensure a healthy industrial relations climate
  • Asserts any reforms should be in line with national interests and political and social realities
  • Emphasises reforms should not disadvantage any group of citizens

 

Franklyn Amerasinghe, a former Director General of the Employers’ Federation, last week lamented that despite pleading by all for proper labour reforms, nothing had changed for the better. 

Delivering the keynote at the seminar titled ‘Making Employment Laws Conducive for Investment in Sri Lanka’ organised by the National Human Resources Development Council, ICC Sri Lanka, CA Sri Lanka and Daily FT,  he emphasised that there was no point in discussing reforms without the political will to change despite all manifestos of leading political parties having promised labour reforms. 

"We need a plan that would be politically sellable in a country where the average politician does not have any sympathy for the private sector," he noted, adding that any reforms should be in line with national interests and political and social realities and capable of being implemented without any group of citizens being disadvantaged.

Following is the full text of the speech by Amerasinghe who is a former Senior Specialist for Employers’ Activities of the ILO and a former Director of several blue-chip companies and currently a member of the Arbitration Board of the Institute for Commercial Law and Practice and a Social Dialogue, Mediation and Conflict Management Trainer:

I have been associated with issues of labour reforms since 1974. I wish I was Rip Van Winkle. I wish that after a long sleep, I got up in the 21st century to find everything changed in Sri Lanka. On the contrary I find that despite all our pleading for change, nothing has changed for the better. 

When I was in the EFC there was this Secretary of Labour who when someone mentioned the need for change, was heard to say, ‘why change what has been there for 50 years?’ He refused to see the difference between stagnation and progress. 

In the 1980s I was the Secretary of a Ministry of Justice Initiative on Labour Law Reforms which was really a part of a broader discussion on laws delays. There is an obvious nexus between laws delays, proper employment relations regimes, and the development of commerce and trade on the one hand; and the wellbeing of the nation as a whole on the other. 

We worked in a tripartite committee and one matter on which there was consensus was that appeals from labour tribunals should be minimised by a law which compelled an appellant to make a deposit to cover the legal expenses incurred in the labour tribunal, similar to what happens in a civil case. This was to discourage frivolous appeals. 

When it went to Parliament one Trade Unionist MP removed the requirement in respect of a worker appellant and what remains now is that an employer has to deposit a sum of money to appeal but not a union or worker whose application was dismissed. This is an example of what happens to efforts by employers and we need to be wary about what we propose as the cure could be worse than the disease!

 

No real political will to change

The 1994 UPFA Manifesto entitled an ‘Agenda for Action – Sri Lanka’ in the year 2000 and the ‘Regaining Sri Lanka’ plan of the UNP Government gave priority to modifying labour laws to enhance our competitiveness. The ‘Mahinda Chintana’ also unequivocally states that: “Labour Regulations restrict the competitiveness of the local industry” (See page 50). I am quoting from the Government Publication in English. 

In the 1990s the World Bank commissioned a study and I had the privilege of preparing a report which was submitted by the then Minister of Industries Wickremesinghe to the World Bank. This document recognised that any reforms that we introduce must be in line with national interests and political and social realities and capable of being implemented without any group of citizens being disadvantaged. 

We have to be conscious of the ILO Conventions and other obligations cast on the country as a member of international organisations in relation to trade practices, human and political rights, and such like. We have to remember that the EU and the US give us certain tax concessions based on specific requirements of adherence to fundamental rights. We have also got to understand that trade unions are affiliated internationally and they also have to show their loyalty to international secretariats who see issues through a global lens. So there are many considerations which we need to keep in focus.

There is no point our discussing reforms, as we have done for the past 50 years, without political will to change. We need a plan that would be politically sellable in a country where the average politician does not have any sympathy for the private sector. Especially at the rural level, industrial relations is adversely impacted by selfish political interests. 

My friends in the apparel sector tell me that with every change of government, politicians in the electorates around them wish to see their supporters and backers substituted for those suppliers who are already in place. Some will recall that there was a serious dispute in relation to the taxi service at the airport some years back, and one Minister went to Parliament and made a scathing attack on the two learned Judges of the Supreme Court who did not see why a change of government meant a need to throw aside what was working well, without legal justification. I had prepared a speech based on the Reforms Paper which has been circulated. I dumped it on second thoughts, as I think that the profit we can derive from this short time available to us in this forum, is to focus on how to win political support to achieve change, critical to the economic development of the country utilising the so called engine of growth, the private sector. The Specific Reforms themselves we could thrash out among the social partners.

 

Labour Reforms Paper’s principal goals

What does the Labour Reforms Paper consider as its principal goals? 

I. National competitiveness, which is underpinned quite naturally by the ability to have strong and viable private sector organisations backed by an efficient, motivated public service. It also requires worker and employer organisations committed to this common goal.

II. Productivity and the efficient utilisation of all resources. There seems to be a reluctance of youth to seek regular employment. They also have gaps in their knowledge which will not attract the sophisticated industries and services. Where they specialise and acquire skills they seek employment outside our shores. The physical effort they are prepared to exert abroad they have no inclination to exhibit in their own country. We have to analyse this phenomenon. Perhaps they have too many social distractions back home or is it a change in values brought about by a rebellion against rule based employment? The new paradigm for youth seems to be, to have more control over their time and job security seems secondary. The shortage of manpower seems to be a concern now especially in the construction industry. The problem does not seem to be the actual shortage of human bodies but a situation of underemployment much of which is voluntary.

III. Remuneration schemes geared to the prevailing conditions in the specific workplaces. When Wages Boards are also contaminated by political considerations, industry suffers and investors would be wary about involvement in labour intensive industries, given also that there is difficulty of exiting, thanks to the Termination of Employment (Special Provisions) Act. The fact that there is a ceiling placed on compensation is not really an answer since the Commissioner still has the right to decide whether to give permission to effect a redundancy plan. The weekend’s papers refer to the Minister of Plantation Industries undertaking to top up the wages of the Plantation Workers with a Rs. 50 Budgetary Enhancement, which ostensibly comes from the State coffers. This could very well lead to pressure from other industries for Budgetary Adjustments I am sure and if they do not surface now the parties will try to outbid each other at election time.

IV. Improving the quality of life of all citizens through the implementation of decent work strategies. We need a socially responsible approach to the right of association; a commitment to lifelong education; and remuneration schemes tied to value addition. We need to address issues of dignity and quality of life. In order to attract youth to seek regular employment, we need to remove all the disparities between manual workers and clerical/white collar staff. We should equate minimum terms to be in line with the Shop & Office Act for all categories, subject to special exclusions and modifications for identified services. We also need to carve out career paths for all employees.

V. Giving gender issues due consideration – Female employees must be given an opportunity to speak for themselves and to articulate their requirements. Flexible work arrangements and opportunities to work in their homes could bring more economic benefits to our female population. It is they who should decide what conditions are required to make work more productive for them and their employers. Personal choice should be respected. We read that the participation of women in employment is about 35% but I feel that this excludes those who are in the informal sector and in reality, their participation in the economy is more significant. What we need to ensure is that they also have dignity and recognition. The underlying principle should be the improvement of their quality of life and not a means of exploitation of a dormant resource.

VI. Education and skills – In order to attract investors who will stay long and sink roots in the country for mutual benefit we need to focus on revamping secondary and tertiary education and training. We need to influence youth to acquire skills which will build a pool of talent which investors would be attracted to. Charles Handy once described Silicon Valley as a honey pot which attracts everyone to it. The link between education and quality employment does not end there. Behaviour as employees is without doubt impacted by the dignity and suitability of the jobs available. There is no doubt a cultural factor in employment, as youth seek jobs which are socially desirable. To prepare youth for employment it is necessary that they receive instruction as students to acquaint them with their role in improving the image of our country through a service culture.

VII. Dispute prevention and management both in the public and private sectors. Disputes not only have a monetary cost but have a cost in building teams so essential to efficiency. Public sector disputes regrettably have never been properly addressed and apart from creating frustration and apathy, it seriously impacts the performance and growth of the business sector. Mechanisms for dialogue, and dispute settlement processes, need to be hardwired into HR systems. In fact, having handled an ILO project for Dispute Settlement in the Public Sector, I found that arbitrariness on the part of management was the cause of most disputes. This project saw its culmination with a Cabinet Paper formulated in collaboration with the Ministry of Public Administration, the Labour Ministry and trade unions. I have heard that it was rejected because some Ministers boldly proclaimed that defined processes inhibited their right to free decision making – in other words they could no longer be arbitrary! As far as management is concerned all we can pray for is a return to the principles which existed in the earlier years after independence when meritocracy was recognised. 

VIII. An easily understood flexible system of Labour Law which requires a levelling of terms among all those covered by minimum legal requirements now contained in the Wages Board Regulations and the Shop & Office Act, subject to exclusions where a trade or service made it necessary to have special working arrangements. Some of them are the export trades, hospitality, health services and security. I would also include the special protection due to workers in hazardous and difficult industries.

IX. Building a culture of pride in our performance and the ability to match the best anywhere. We need to have a national pride in our products and services. We cannot expect this unless we have an appreciation of how important our industries and services are for the sustenance of our social and economic existence. Meritocracy and rewards for performance would naturally help.

 

Addressing issues

As I said earlier, we need to discuss a strategy to win over all those who oppose change and are more interested in tightening the screws on the existing employers and showing unconcern for new investment. 

What industries do we have now? We have the apparel trade which is the largest employer of female workers. Although providing attractive working conditions it is deemed not socially attractive and we are told that there is a shortage of workers. We have the plantations and farms which cannot attract or retain workers. The supermarkets are full of boys and girls from the hill country. The traditional work is not to their liking as they desire a different lifestyle. This perhaps is the cause of the malaise in the industrial and construction sector as well. 

We also have a stream of skilled workers; and maids going abroad to make quick money away from the prying eyes of our rather narrow-minded society. We need to have a dialogue with educators which results in a better appreciation of regular employment. Education is a means of a higher quality of life and the sharing of gains which we need to target.

Primarily it is my view that we have to stop opposition to change being a political weapon. In the 1990s the EFC and the chambers prepared a 10-point agenda for bipartisan action and had a meeting at the BMICH at which all those present accepted that, enough was enough, and that the issues needed a common page approach by the political forces. We had representatives of the political parties as well as religious dignitaries, trade unionists, NGOs and also international organisations and country representatives. 

Where the process got hijacked was that the US Ambassador, who was there as an observer, said that all the points were valid but that we should merely focus on achieving peace in the country and laying the others on a backburner. I think it is now the time to revive our discussion of what we want for the country and get the parties to agree that there are some common elements which they accept for the good of the nation and they would not oppose change. To come closer home, at least let us discuss this in relation to employment and creating quality work.

 

Why should the political adversaries agree?

Well, it would make them more comfortable at night, for one thing. They need not proclaim that they would do things, which later have to be abandoned because of the adverse consequences which would follow implementation, or worse still, carry on regardless and see disaster happen. 


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