Decent Work in Sri Lanka – a Trade Union assessment
In 2001, at the 13th Asian Regional Meeting of the ILO constituents, Sri Lanka made a commitment to develop a National Policy and National Plan of Action for Decent Work based on the 4 Pillars or Dimensions to the concept of ‘Decent Work’ promoted by the ILO:
1. Opportunity for Work – All those who seek work should be able to find work that is productive and adequately remunerative.
2. Right at Work – No forced labour and workplaces to be free of discrimination child labour and workers free to join organisations of their choice.
3. Social Protection – To safeguard health and safety at work and to provide financial protection in the event of illness, old age, loss of work and livelihood.
4. Social Dialogue – Workers be treated with respect at work, and their voice heard, concerns addressed through opportunities to participate in decision making.
The Labour Ministry developed the Decent Work Country Programme (DWCP) 2013-2017 setting three country priorities.
Priority 1: Promotion of full, decent and productive employment and competitive sustainable enterprise development.
Priority 2: Strengthened democratic governance of the Labour Market.
Priority 3: Social Inclusion and the establishment of a Social Protection Floor.
Decent work is concerned with the right or “conditions of labour (of all those who work) whether organised or not wherever work might occur whether in the formal or the informal economy, whether at home, in the community or in the voluntary sector” (ILO 1999) Decent Work concept implies that rights and economic progress go hand in hand.
We are already half-way through the programme and this paper seeks to highlight the present state of the DWCP from a workers and trade union angle.
1. Promotion of full, decent and productive employment and sustainable enterprise development.
Economic growth has accompanied increase in our income inequality. The development challenge is to ensure rapid economic growth with better equitable income distribution. Taxation can be used as a tool to ensure such income distribution. Governments since 1977 have refused to realise the importance of such a course and as a result tax ratio in Sri Lanka has been declining and remains well short of the average rate of developing countries. A noticeable tendency is to rely more on indirect taxation than on direct taxes. Indirect taxes aggravate equity concerns contained in the development objective. The promotion of full, decent and productive employment and sustainable enterprise development would not be possible to achieve without economic growth being inclusive, people centred, employment friendly and rights- based. Economic growth should entail social equity/ fair income distribution.
Position of Labour
A significant number of the employed are suffering from poverty and lack of income security (working poor). The truth is that more and more people in jobs cannot expect to receive an income on which they can live in decency. The depreciation of the Rupee and the inflation it triggers compound matters.
The inaction of the authorities in publishing the unit value of the cost of living index prepared by the Department of Census and Statistics continue to deny the unions, the opportunity to take up the issue of a cost of living payment in their collective agreement negotiations.
A trend away from regular employment towards casualisation of labour is already to be observed with job insecurity, meager earnings and lack of right to existing social protection. One third of employment is on a casual basis and another one third self-employment. Only about a quarter is in regular employment.
Contract labour is on the increase along with other forms of atypical employment practices. A Tripartite consensual amendment to Sec.59A of the Wages Boards Ordinance in order to discourage the employment of sub-contracted labour in core business of enterprises has been pushed into the limbo of forgotten things. The new employment practices also affect labour relations and have important consequences for unionisation, worker representation, voice and rights at work. The National Workers’ Charter promulgated in 1995 envisaged prohibition of recruitment of casual workers for regular employment and permanent status for such employees after a specific period of probation. In the public service casual employees who have worked for a continuous period of 180 days and of good conduct are entitled for consideration for permanent status.
Wages
Wages are central to enhancing productivity and employability. Real wages and conditions of work are increasingly under pressure with wage rates trailing behind the increase in productivity resulting in shift of gains to capital at the expense of labour. Employers need to realise the long term advantages that would accrue from a short-term advance by way of higher wages. The workers in the private sector have been agitating for a Budgetary Allowance of Rs. 5,000 since 2008 to no avail.
The present statutory minimum wage fixing machinery does not function adequately as it depends on the type of establishment or trade. There is very little uniformity in wage rates determined by different Wages Boards in different trades for workers. What is needed is a wage forming mechanism as envisaged in the National Workers Charter (1995) to review wages fixed by the minimum wage fixing machinery. The urgent need is to design a national minimum living wage. Such a minimum wage shall be a minimum material entitlement to all workers irrespective of work/sector and shall be established as a fundamental right of all working people.
A significant section of our population lives below the poverty line and received Samurdhi and public assistance. In that situation it is only the wage earners who have had some degree of purchasing power. It is this purchasing power that has largely contributed to maintaining our food production, small and medium scale industry and services sector.
It is the workers in the private sector who play a significant role in the local economy and contribute to increase the growth rate. A reduction of their purchasing power is bound to impact on their lives, productivity and development. For our economic development it is absolutely necessary that real wages are maintained at a level that the purchasing power is not eroded.
2. Social Inclusion and Social
Protection
To achieve lasting peace a viable political solution to the ethnic problem needs to be found early.
The need for action, positive action to achieve gender equity and a comprehensive programme for reforms of the laws relating to women, children is stressed.
Social Security and Social Protection have not found a place in the country’s constitution.
The need is to adopt a comprehensive Social Protection Policy.
The following measures are
proposed;
1. Unemployment Relief Benefit
2. Pensions for the Elderly
3. A new Pension Scheme for Private Sector Employees
In the interim it is of utmost importance that the savings of workers in the EPF and ETF are protected. Research has found that the returns on these have been negative in real terms due to speculative investments in the stock market. There are serious allegations of malpractices and helping out business friends at the expense of the hard earned savings of workers. It is believed that the EPF has lost a staggering Rs.12 billion at the stock market. Serious management inefficiencies of the Department of Labour have been pointed out by the country’s Auditor General in the area of management of the EPF, its operation and enforcement. In order to stem this dangerous drift the unions have forwarded a proposal to the NLAC to constitute a Tripartite Consultative Committee to provide transparency and accountability in fund management.
Unemployment Relief
In 2002 the unions proposed that an Unemployment Benefit Fund be established to provide a stipulated income support for a prescribed period to eligible employees who are actively seeking employment as a safety net. The authorities need to address this issue on a priority basis as vulnerability of employment to market forces and external trade shocks are bound to continue in the coming period.
Pensions for the Elderly
According to demographic projections, the share of Sri Lanka’s population aged 60 plus is expected to double from 12.7 per cent now to 25 per cent by 2020.
Access to a reliable source of income in old age has to be recognised as it has an important bearing on poverty and standards of living. A universal non-contributory pension paid out of general revenues is feasible and is recommended.
Pension Scheme for Private
Sector Employees;
The need is for an adequate replacement monthly income related to recent earnings, guaranteed for life and protected to a reasonable extent from the effects of inflation and an adequate lump sum at the time of retirement.
At the time of retirement, each member would have a choice either;
(a) To receive his/her entire balance in the EPF as a lump sum in the same way as now, plus any pension benefit built up in the new scheme,
(b) to convert all or part of the EPF balance into periods of pensions insurance in order to increase the entitlement under the new scheme.
3. Democratic governance of the
labour market
There is growing deficit regarding industrial relations, freedom of association and Collective Bargaining particularly in the garment industry with many factories having a strained labour management relationship. The labour authorities’ lackadaisical attitude on these matters has resulted in internationalising industrial disputes so much so buyers threaten boycott of the suppliers. The garment sector is the main source of employment especially for women in the rural districts.
The Supreme Court had held principles of ILO conventions No. 87 and No. 98 on the right to strike are inadmissible in Sri Lanka. It has also held that no enabling laws exist in order to provide for the guaranteeing of principles embodied in these conventions. This vacuum in law needs to be remedied on the lines recommended by the Committee on Freedom of Association of the Governing Body of the ILO and the trade unions have urged the authorities to bring in necessary amendments to the law as the government had earlier indicated to the ILO that it would abide by the recommendations of the ILO-CFA as given in its report (Case No. 2519). The unions have already placed their proposals before the NLAC to assist the authorities to amend of relevant laws in keeping with the ILO recommendations.
We recognise social dialogue and workplace co-operation are important to sustainable enterprise development and, recognition of trade unions and dealing with them by employers hold the key to such development as unions are recognised by the National Human Resource and Employment Policy (NHREP) as the legally recognised social dialogue institution for workers. It is also necessary that the present threshold of 40 per cent union membership for Collective Bargaining purposes be lowered. The NHREP states; “to maintain cordial labour relations and workplace co-operation the employers should encourage collective bargaining even with trade unions with less than 40 per cent membership”. The unions suggest 25 per cent membership as recommended by the ILO.
The law has been amended to increase the number of overtime hours. A good many of the employers tag overtime to shift work resulting in long hours of work resulting in adverse impact on health and social life of female workers in the garment sector a large number of whom are found to be suffering from anemia. Overtime work should be made voluntary in line with international practice. Legislative amendments required to give effect to ILO Convention 103 concerning Maternity Protection need tangible progress.
The new Occupational Safety and Health and Welfare Act which was finalised in 2009 to increase coverage has to be made law and implemented to minimise the social cost to the economy. The proposed Employment Injury Insurance Scheme presently under study sould ensure employer liability.
Amendment to the Wages Board Ordinance is envisaged to allow the operation of a five-day week in all establishments. The unions have expressed their concern over the proposed increase of the 8-hour workday without appropriate compensation. Though Sri Lanka has not ratified ILO Convention No.001 re working hours unions are not prepared to acquiesce in the matter of 8-hour working day won by the international working class. The unions’ attention has also centered round the authorities’ moves to amend the Shop and Employees’ Act to relax existing provisions on night work for women, especially in the IT enabling services without proper study of the implications involved for workers in the long-run.
With the advent of the SLFP-UNP consensual government the employers have mounted a strong campaign for a flexible labour market. In any reform of the present labour laws caution needs to be exercised to ensure that such reform does not result in eroding job opportunities in regulated sectors by encouraging a shift of jobs and work to the unregulated informal sector.