Govt. needs to boost COVID-hit private sector
Employers in the private sector struggling to overcome the crisis brought on by the COVID-19 pandemic want the government to establish labour market-related policies and grant concessions in terms of delayed EPF, ETF payments and tax relief as the country faces mass scale unemployment and tight cash flows.
This was detailed in a survey carried out by the Employers’ Federation of Ceylon (EFC) titled “An Initial Assessment of the Impact of COVID-19 on Employers” with a sample of 100 firms that are members of the EFC and with a total employee base of 125,000 during the period April 15 – May 12, 2020 when businesses were most hit after the government announced a lockdown period.
Firms suggest that the labour market include facilitating promoting work from home; flexi working hours, less government intervention on salary and other payment (especially in the plantation sector). They have also urged to introduce government-sponsored wage payment schemes; setting off the non-working days due to lockdown against employees’ leave entitlements.
Employers have also requested to delay the payment of EPF and ETF by a maximum of three months, EFC Director General Kanishka Weerasinghe said at a media briefing held at the EFC auditorium at Rajagiriya on Thursday to release the findings of the survey.
He noted that employers had requested for a delay in both employers’ and employee contributions and that moratoriums had not been allowed. Though the delay is permitted only for the employers’ contribution some do delay the employee contribution as well.
In addition employers are seeking modifications on laws pertaining to the above concerns that have arisen in the aftermath of the COVID-19 pandemic which has disrupted economic activity since most local labour laws did not address situations of this nature as they were quite archaic having been established “decades” back.
Firms have stated that labour market-related interventions is the most important to enable businesses to minimise cash flow problems and start operations as most have been hit by huge losses in terms of revenue and export earnings resulting in liquidity problems that require remedial monetary and fiscal measures.
Trade-related policy interventions is required in providing relief on tariffs on exports and imports, removal of CESS and other para-tariffs on imported construction material.
Export earnings suffered 100 per cent losses among firms with more than 250 employees as large-scale firms account for about 95 per cent of total export earnings.
The leisure and food services sector recorded the highest economic losses in terms of occupancy, revenue, foreign exchange earnings and 73 per cent of its investments.
In addition more Polymerase Chain Reaction (PCR) testing is a requirement that employers have asked for in a bid to contain the spread of the virus through employees exposed to foreigners and international travellers. In addition it was suggested to treat printing industry as an essential service and expand air freight operations.
Nearly 75 per cent of firms in key economic sectors managed to implement work from home practices. More than half of all firms in the survey were faced with serious cash flow problems in meeting day-to-day expenses. The worst hit was the small and medium scale firms and firms serving both domestic and foreign markets.
Among private sector workers, about 21 per cent in the production for export category of workers are likely to lose jobs. In addition about 9 per cent from the executive and non executive grades will be laid off in addition to 19 per cent from the production for export and domestic sectors.
Labour Department estimates job losses to reach about 14,000 that are likely to increase to 25,000, Mr. Weerasinghe said.
Private sector workers comprise 8 million out of which 2.5 million are in the formal sector.