Private sector uneasy about growing role of Govt. in wage issues

Wednesday, 5 April 2017 01:52 - - {{hitsCtrl.values.hits}}

By Chathuri Dissanayake

The private sector is apprehensive about State intervention in wage-related matters and wants the Government to adopt a more consultative approach, a survey conducted by the Employers’ Federation of Ceylon (EFC) revealed.

However, employers accept the obligatory role played by the State in the wage matters of both the private and public sectors.

Placing more emphasis on a more consultative process to be adapted by the State in dealing with wage-related matters, Employers’ Federation Director General and Chief Executive Officer Kanishka Weerasinghe said that the current ad-hoc policy and regulations of the Government had burdened the private sector.

Discussing the impact of Budgetary Relief Allowance on Workers Act (BRAWA) Act no. 4 of 2016, the survey also highlighted that the regulation had an adverse impact on private sector industries, stressing that it eroded export competitiveness while also distorting firm specific productivity enhancement schemes.

“The private sector does not get handouts. It has to work and earn. Sudden policy changes by the Government, like in 2015 when the private sector was asked to increase wages by Rs. 2,500, burdened the private sector,” Weerasinghe said.

“The Government should try to avoid making legislation of such nature. They should engage in discussions and negotiations with us to lessen the impact of such policies to the industries. Sadly, although there were negotiations before BRAWA was introduced, the representations were not incorporated,” Weerasinghe lamented.

Acknowledging that the majority of the policies introduced by the State had increasingly become political, the EFC also welcomed the recommendation by the International Labour Organization to engage in collective negotiations with employees instead of Government intervention.

“We need to have a more professional approach in wage fixation based on information. We don’t need to have adequate information which is currently missing. We should have a rational basis,” ILO Senior Employer Specialist Ravi Peiris stated.

However, discussions that followed the research findings which recommended a consultative process were unable to determine who should be engaged in the exercise as only 10% of workers are unionised in the country, while the majority of employers were also not affiliated to organisations. According to Weerasighe, however, over 650 employers are members of the EFC while larger numbers of business organisations are networked through affiliations.