Employers, unions and Govt. confirm social dialogue essential for national wage fixation

In the world of work, wages are best set through sound evidence and social dialogue. This was the key message from an ILO-supported workshop on minimum wage setting in Sri Lanka.  

The workshop hosted by the Employers Federation of Ceylon (EFC) with support from the ILO Bureau for Employers’ Activities provided an opportunity for a frank and productive discussion on how best to determine wage policy, bringing together actors in the private sector, unions, and Government. 

A recent study commissioned by EFC informed the deliberations, concluding that social dialogue is an essential mechanism when setting appropriate wage levels in the country. The study analysed the impact of the Budgetary Relief Allowance of Workers Act (BRAWA) on firm level operations and labour market efficiency as perceived by the private sector. 

Social dialogue includes all types of negotiation, consultation and exchange of information between, or among, representatives of governments, employers and workers, on issues of common interest relating to economic and social policy.

Simrin Singh, the ILO Country Director for Sri Lanka and the Maldives, noted that social dialogue is especially crucial today given the added complexities that globalisation presents to workers, employers and governments. Singh noted that ILO’s near century old engagement around the world has time and again proven that social dialogue is key in both mitigating and resolving old and emerging labour issues.

ILO South Asia Specialist on Wages, Xavier Estupiñan, emphasised that minimum wage setting informed through social dialogue and collective bargaining are best practices and in line with the recommendations of ILO Convention 131 on Minimum Wage Fixing, ratified by Sri Lanka as far back as 1975. He added that economically contextualised statistical and qualitative data are essential in devising and implementing adequate wage policy. Indeed, effective dialogue is underpinned by sound evidence.

A. Wimalaweera, Senior Assistant Secretary, Ministry of Labour and Trade Union Relations, appreciated the insights the EFC study provided and encouraged further data and analysis, as crucial to informing policy. Recognising the rapidly changing patterns of employment in Sri Lanka, he reaffirmed the values of the Ministry of Labour to ensure that the rights of all workers are protected and a conducive environment for productivity and employment is set.

EFC Director General Kanishka Weerasinghe, was of the view that the EFC was pleased to undertake this study to ascertain the impact of the BRAWA 2016 with the ILO. “Whilst we recognise that it is obligatory for the Government to take policy decisions with regard to the fixing of the national minimum wage as well as the industry-based minimum wages, fixing wages beyond that should be left to the market forces and processes such as performance linked wage systems and collective bargaining.”

General Secretary of Sri Lanka Nidahas Sevaka Sangamaya Leslie Devendra welcomed a stronger participation of social partners in determining wages. In particular, he emphasised the need to strengthen collective bargaining processes across at all sectors of employment and acknowledged ILO’s role in supporting the Government in promoting collective bargaining at enterprise levels.

In keeping with the spirit of social dialogue, the workshop provided a space for divergent yet constructive viewpoints to be shared. Rich panel perspectives on the way forward for Sri Lankan wage policy were provided by Ravi Peiris, ILO Senior Specialist on Employers Activities, Magnus Berge, ILO Senior Specialist on Workers’ Activities, and Alistair Smith, ILO Senior Specialist on Social Dialogue and Labour Administration. Amongst these was a call for initiatives to revamp and strengthen Sri Lanka’s labour administration system, including existing tripartite mechanisms like the National Labour Advisory Council (NLAC) and the various wages boards and a call for better data that can provide a rational basis on which to set wages.

As an immediate follow up, the ILO will work with the partners to develop a road-map on sound wage setting mechanisms, with social dialogue and evidence at its heart.