Workers’ benefits

Friday, 3 August 2012 00:01 -     - {{hitsCtrl.values.hits}}

A country could be considered as prosperous only when its artistes and working class are leading a satisfactory life. It is the duty of the Government and the Opposition to ensure that workers rights are safeguarded. From time to time, benefits should be revised and proper relief measures be taken at times of distress.

At present the following matters need immediate attention.

 a)EPF and ETF benefits

EPF benefit should be considered as compulsory savings and the Government should bring strict laws for due compliance. It is regrettable to state that EPF and ETF benefits are not enjoyed by all.

1. EPF is not deducted from all  liable income (reduction in savings)

2. EPF deducted is not paid together with employer’s contribution.   

3.EPF and ETF dues are not settled on time (medical benefits, etc. are not enjoyed on time). According to the records only 45% of employers in Sri Lanka comply with rules and regulations. In the event of a company being liquidated, EPF and ETF dues cannot be recovered even from the directors in full.

4.Several employees, especially those from the estate sector, are not aware of the correct procedure to obtain EPF and ETF refunds. It should be remembered that it was late Dr. N.M. Perera who won EPF benefits for the estate sector.

Even additional benefits such as medical grants, loans, etc. are not enjoyed by all. Normally management does not show much interest in this matter.

5.Unions do not show interest to check as to whether EPF and ETF contributions are settled on time. They do not assist their members to receive refunds on time.

6.It is high time the Government appoints a team of investigators to check as to whether EPF and ETF regulations are complied by all.  Unemployed graduates could be offered employment to update this file.  The present 45% compliance should reach 100% early.

b)Retiring gratuity

This was introduced with effect from 31 March 1983.  The qualifying period of five years should be reduced to two-and-a-half years early.  Further at present, if the number of employees is less than 15, no retiring gratuity is payable. However, employees could appeal to Labour Tribunal. This exemption also should be removed to avoid delay in receiving Retiring Gratuity.

c)Service Charge to hotel employees

At present service charges paid to hotel employees do not qualify for EPF and ETF benefits (reduction in savings). However they are liable for PAYE Tax.  Commissions received by sales representatives qualify for EPF and ETF benefits.

Therefore it is possible to accommodate EPF and ETF benefits on Service Charges also.  It may be argued that EPF and ETF payments will increase overheads; it is only 1.5% of turnover, which is negligible.


At present normal overtime rate is 1-1/2 times the normal rate.  This was fixed about 60 years ago and needs revision.  It is better to pay EPF and ETF benefits on overtime. At least partial benefit (say 50% of the overtime) should be accommodated with EPF and ETF benefits.

e)Lieu leave –

(Executive) Overtime or leave pay or both are paid to employees.  When its work on Poya days, weekends and statutory holidays, executives are not paid overtime. However lieu leave could be granted when they work on weekends.  A person who works for five-and-a-half days needs some rest and should be allowed one-and-a-half days’ holiday for health reasons.  This is acceptable by the labour laws though not protested by employers.

Due consideration should be given to grant lieu leave to executive and others when they work on weekends, Poya days and statutory holidays.  This is a human approach.

f)Domestic employees

At present Sri Lanka has fair percentage of domestic employees (servants, drivers, etc.)

They do not enjoy:

1.Minimum fixed salary and annual increment

2.EPF and ETF benefits

3.Eight hours work – It is unlimited.

4.Leave facilities

5.Maternity leave

6.Insurance cover for workman’s compensation

7.Retiring gratuity

The Labour Department is not expected to interfere in the appointment termination of domestic employees.

At least the EPF and ETF benefits and retiring gratuity should be paid to domestic employees as they do not have any savings.  It may be difficult to monitor EPF and ETF contribution and settlement as the present commercial compliance is only 45%.

It is better to introduce a Post Office savings book for the EPF and ETF payments to be deposited by the employer every month.

The employee should retain the Pass Book.  Retiring gratuity paid on leaving could be acknowledged by the domestic employees on their salary acknowledgement record book maintained by the employer

This is also a human approach. After all, the talk about housemaids working abroad is not worth if local domestic employees in are not looked after in the proper manner.

S.R. Balachandran

BSc/FCA, FCMA (Sri Lanka)