Don’t interfere with private sector wages, EFC tells government

by Namini Wijedasa
Employers last week called for a government assurance that they will not be compelled into submission in industrial disputes due to intimidation, thuggery and lawlessness as observed on estates during the past year.

"From the lessons learnt this year in the plantation sector," remarked Ratna Sivaratnam, chairman of the Employers Federation of Ceylon and of Aitken Spence Ltd., "we believe that governments, whosoever should constitute them, will desist from intervention in private sector wages and also assure us all that employers will not be compelled into submission in industrial disputes due to a breakdown in the rule of law and under threats to the security of life and property of management personnel."

Sivaratnam was addressing the 72nd Annual General Meeting of the EFC, held Wednesday at the Institute of Chartered Accountants of Sri Lanka, Colombo. He was elected unanimously to the post of chairman while Vivendra Lintotawela, chairman of John Keells Holdings Ltd, was elected vice chairman and Gotabaya Dasanayaka, director general.

Sivaratnam emphasised that EFC concerns raised at the AGM last year regarding state intervention in private sector wages remained pertinent and warned that such meddling can destroy relations with trade unions built on the basis of collective bargaining.

"The decision of the government, announced in the second week of this month, to grant an interim allowance of Rs. 1,200 per mensem to public servants pending the finalisation of the Salaries Commission report has once again given rise for concern due to requests for the extension of this allowance to the private sector," Sivaratnam said.

To illustrate how government interference hit the private sector, he cited the example of the estate sector where, in February, 2001, the Ceylon Workers Congress sponsored a satyagraha campaign demanding the extension of the Rs. 400 allowance declared by the government under emergency regulations to certain sections of the private sector.

"The satyagraha campaign, which received the blessings of many government politicians, also turned out to be a massive go-slow at work on the plantations and partial strikes in certain estates, coupled with a breakdown of law and order in the plantation areas," he recalled. Estate managers were at the receiving end of "well organised acts of thuggery and intimidation" while the transport of estate produce to Colombo was forcibly obstructed by organised gangs.

"All efforts by us to get the authorities to maintain law and order and have the demand of the trade unions dealt with as an industrial dispute met with little or no positive response," Sivaratnam complained. Finally, employers provided further concessions notwithstanding the collective agreement already signed in July 2000.

Private sector wages should be determined by market forces or through collective bargaining with affordability and productivity as the principal criteria. Minimum wage setting can be left to the tripartite decision-making process under the Wages Boards Ordinance.

Sivaratnam also addressed a pet EFC topic: that of labour law reform to enable greater flexibility, pointing out that the present regime has existed prior to 1977 when the Sri Lankan industry was heavily protected through stringent import substitution measures.

Although the government has identified the need for labour law reform, no tangible steps have been taken. "What we urgently ask for are reforms that will transform our labour law regime to one that would facilitate the growth and stability of Sri Lankan industry, which on the long run, is easily the best guarantee for security of employment," the chairman stressed.

The EFC has 430 members. Eighteen had resigned while nine had been removed for non payment of subscriptions. Both resignation and failure to pay were mainly due to downsizing of operations of such companies or closures. However, despite the unprecedented downturn in economic activity during the current year, 414 members renewed their membership and 16 new members joined.

A significant feature has been the ability of the EFC to attract large public sector establishments to its membership, including two major banks.

The EFC has 18 professional staff, with four assigned full-time to the plantation sector. The annual report said that the secretariat had finalised 72 agreements between member companies and trade unions, most related to wages.

The union has gained recognition as a model employers’ organisation — the International Labour Organisation has chosen it as a body recognised for excellence in its key areas to host a study tour from emnloyer unions of selected developing countries. The tour is scheduled for early next year.

In the EFC committee are the following: Prema Cooray (hotels and tourism group), Mahendra Amarasuriya and Sunil Wijesinha (banking, financial and insurance services group), Raji de Silva and Lalith Obeyesekera (plantation services group), Hemaka Amarasuriya (manufacturing — industrial estates), Kumar Jayasuriya (manufacturing — board of investment), Sri Nagendra (manufacturing — small and medium industries), Mahesh Amalean (manufacturing — garments and textiles), Sriyani Nonis (manufacturing — export), Ranjith Page (manufacturing — food and beverage), Richard Ebell and Eardley Perera (services group), Cuthbert Wijetunge, Jayampathy Bandaranayake, Marise Deckker, Tilak de Zoysa and Nigel Austin (nominated members), Lakshman Fernando and Nirmal Fernando (co-opted members), Chandra Jayaratne from the Ceylon Chamber of Commerce and Dickie Juriansz from the Affiliated Associations Group.