Government, ILO review wage-setting institutions to align with market conditions

Saturday, 12 September 2026 00:10 - - {{hitsCtrl.values.hits}}

Government, employers and workers are collaborating with the International Labour Organisation (ILO) to strengthen the country’s wage-setting institutions, so they remain responsive to the needs of workers and enterprises as well as to changing economic and labour market conditions.

A three-day workshop organised by the Labour Ministry and the Department of Labour, in partnership with the ILO, reviewed Sri Lanka’s existing wage-setting institutions and practices, according to a statement issued by the ILO.

The workshop also identified practical priorities to strengthen these institutions through evidence-based approaches and social dialogue in line with national circumstances.

Held from 8 to 10 September 2026, the event brought together representatives of Government, employers’ and workers’ organisations, members of the Labour Law Reform Committee, academia and technical experts from the ILO, the statement said.

Opening the workshop, Labour Ministry Secretary S.M. Piyatissa said adequate wages, higher productivity and sustainable enterprises should progress together and reinforce one another as Sri Lanka moves forward. He added that strong labour practices could strengthen the country’s position in global supply chains and support its ambition to attract responsible investment and expand ethical, high-value exports.

ILO Country Office for Sri Lanka and the Maldives Director Joni Simpson said effective wage policies need to be grounded in national circumstances, informed by reliable evidence and shaped through meaningful dialogue among governments, employers and workers. She added that such policies should also be gender-responsive, helping to address pay inequalities and advance equal remuneration for work of equal value, noting that the ILO’s role is to support this nationally owned process.

During the event, participants examined principles contained in the ILO’s international labour standards dealing with minimum wage setting. Discussions addressed the needs of workers and their families, relevant economic factors, wage and labour market trends, collective bargaining, and implementation and compliance. Experiences from India, Indonesia and Malaysia provided international perspectives on evidence-based wage-setting.

The workshop built on the ILO’s 2024 tripartite agreement on living wages and the 2025 High-Level Regional Dialogue on Living Wages held in Colombo.

For Sri Lanka, the discussions were said to be particularly relevant to export-oriented sectors such as tea and ready-made garments, where collective bargaining and social dialogue can help support sustainable wage outcomes while maintaining competitiveness in global supply chains.

The discussions also come as Sri Lanka continues its economic recovery following a period of exceptionally high inflation that significantly affected workers’ purchasing power and placed pressure on enterprises.

ILO Wage Specialist Anoop Satpathy said Sri Lanka’s recent economic experience has demonstrated why wage-setting institutions need to be transparent, predictable and able to respond to changing economic and labour market conditions. He added that reliable data, sound analysis and effective social dialogue are critical to achieving wage outcomes that consider both the needs of workers and their families and relevant economic factors.