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EFC to take up critical issues on labour laws with ministry today

The Employers’ Federation of Ceylon (EFC) will push for critical reforms to labour laws when the National Labour Advisory Committee meets today.

Director General of the EFC Ravi Peiris told the Island Financial Review that the federation had for a long time been asking for reforms to the archaic labour laws so that the legal framework will encourage productivity. (Also see EFC calls for national employment policy on http://www.island.lk/2008/11/04/business1.html)

"We have written to the President and he has told us that he sees the importance of reforming current labour laws and if nothing tangible comes out of today’s meeting with the labour ministry we may have to appeal to him," he said.

Peiris highlighted an example of how existing laws seem unreasonable.

Companies used to make a gratuity payment to employees retiring after long years of loyal service. This payment was left to the discretion of each company and was determined by their individual capacities to make such a payment.

But, this became law in 1983 and employees completing five years of service are now entitled to this payment.

At present, plantation companies struggling to cope with the global financial crisis pay gratuity to workers who do not even work for more than 150 days on the plantations.

"Some workers just work for about 2 days of the week on the field and then engage in other work outside the plantations. As their names cannot be removed from the lists, when they retire they are entitled to gratuity for the number of years they have been in service.

"We are asking that a year be defined as having completed 180 working days and this is a fair request," Peiris said.

As reported earlier in the Island Financial Review a Presidential Report on Regional Plantation Companies said wage increments that had been carried out in the plantation sector were politically motivated and had no bearing on productivity, which has hurt the financial positions of plantations.

It suggests that the definition of the "year" in the Gratuity Act should be amended as "a year shall mean a completed period of 12 consecutive months during which a worker has worked not less than 180 days.

We quote Dr. Saman Kelegama, Executive Director of the Institute of Policy Studies, a member of the committee responsible for the report.

"Another issue that could threaten the very existence of the plantations industry is the shortage of labour with the younger generations opting to move into urban areas in search of more ‘white-collar’ jobs.

"It is paramount that workers in the plantations sector are given adequate housing facilities and a decent work environment. The industry has to come up with a wage structure and incentive schemes tied to productivity which will enable workers to lead decent, fairly comfortable lives," Dr. Kelegama said.

Back to Peiris, he said the proposed reforms are for all sectors and that the EFC was conscious of building a win-win situation for all.

"Some time ago when the government decided to increase the minimum wage to Rs. 5000 a few exporters approached the EFC and vehemently opposed the increment and wanted the EFC to take the matter to courts and prevent the increment from seeing the light of day.

"The EFC told them it would not do such a thing and in fact supported the Rs. 5000 minimum wage. We do not oppose for the sake of opposing, we are a responsible employer organization. W e have to strike a balance between equity and efficiency," Peiris said.

He said the relationship between unions was cordial and that the unions too need to look at productivity as a positive thing.

With the global financial crisis expected to take a heavy toll on the manufacturing industry, Peiris last week suggested that if terminations and temporary layoffs were necessary the legal framework must be prepared for such an eventuality and suggested that the top led the way.

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