Financial Times

Govt approves new labour laws
By Suren Gnanaraj
The Cabinet has approved four new labour laws that would help make the country's work force more competitive, Minister of Employment and Labour Mahinda Samarasinghe said. Some of the labour laws are archaic and needed to be amended to suit the global demands and competition, he said.

Among the four laws that have been presented to the Legal Draftsman's Department, the first has been drafted to double employee compensation from Rs. 250,000 to Rs. 500,000. Benefits such as funeral expenses have also been revised.

The second law aims to provide an incentive for outsourcing, by introducing EPF and ETF benefits for those employees who were not previously considered as part of the principal company. The third law allows employees who have been made redundant as a result of a company re-structuring process, to withdraw their EPF and ETF benefits if they wish, in addition to their compensation.

The final law has been designed to provide a boost to the IT sector, by allowing female workers to work on 24-hour shifts, which is prohibited under the present law.
Since the government has focused its attention on developing the IT industry, this new law would help IT enabling ventures to hire female employees on 24-hour shifts, especially because of the international time difference.

This law has also set in place certain safeguards such as the requirement of rest rooms, transport and security. Samarasinghe said that in a short period of 18 months he had introduced five legislative enactments including the ratification of certain ILO provisions.

"Before I assumed office as the Minister of Labour, there was a lot of rhetorical positions which had been created by the previous government, including the draft of a labour charter which never saw the light of day," the minister said.

Depositors hope to revive Pramuka Bank
By Quintus Perera
Pramuka Bank depositors and Janashakthi Capital said they hoped the Central Bank would take a fresh look at their proposal to revive the troubled bank following last week's Appeal Court decision quashing the cancellation of Pramuka's licence by the Monetary Board.

Palitha Gamage, President of the Pramuka Depositors' Association, called for a new board of directors to be appointed to Pramuka with the concurrence of the Central Bank. In a statement on behalf of the 15,000 depositors, he said that they would, under no circumstances, be prepared to reopen the bank under its previous management and board of directors as they had been accused of irregular practices that put Pramuka in trouble.

A spokesman for Janashakthi Capital, which had earlier expressed interest in taking over Pramuka, said they were prepared to support the proposal the depositors had submitted to the Central Bank, which they too had helped prepare.

Meanwhile, the Supreme Court put off till tomorrow a Central Bank appeal for interim relief to stay the Appeal Court ruling when the matter was taken up on Friday.
The three-bench Supreme Court observed that the Central Bank was trying to have the implementation of the Court of Appeal judgement stayed without having made any attempt at all to inform even one of the depositors or even their instructing attorneys.

In the circumstances, the Supreme Court has refused to grant interim relief sought by the Central Bank. By that time, if the Central Bank sought to canvass the staying of the Court of Appeal judgement, it should take diligent steps to inform the depositors and instructing attorneys, it said.

Meanwhile, several employees of the Pramuka Bank confirmed that they have been receiving their salaries every month without a break and that the June salary was paid on July 1. The monthly salary bill of Pramuka has been about Rs. 4 million. This means that from December 2002, when the bank was closed, till June 2003 the amount spent on salaries would have been around Rs. 28 million.

In its July 2 ruling, the Appeal Court, which heard the petition of 225 Pramuka depositors, made order issuing a writ of certiorari quashing the cancellation of the Pramuka Bank's licence by the Monetary Board of the Central Bank. It issued a mandate in the nature of a writ of mandamus on the Monetary Board to consider the several options recommended by the Central Bank Director of Bank Supervision.

The court noted that on November 21, 2002, the Central Bank Director of Bank Supervision had submitted a report to the Monetary Board on the post-suspension examination of the bank, setting out several options available, which would enable the Monetary Board to permit the bank to resume business.

The ruling quoted relevant paragraphs from the report and said the liquidation of Pramuka Bank should have been resorted to only if all other options to revive the bank fail. The report indicated that if the bank is liquidated there will be serious repercussions on the depositors and creditors who stand to lose heavily and may receive only a part of their deposits.

"This court does not dispute that the Monetary Board has a discretion in the matter. However, it is a discretion that has to be exercised reasonably, fairly and justly," the judgement said.

"The valid exercise of a discretion requires a genuine application of the mind and a conscious choice by the Monetary Board. Provided the Monetary Board acts fairly and reasonably within the four corners of its lawful jurisdiction, this court cannot interfere. Accordingly, it follows that the court can examine the exercise of the discretionary power in order to see whether it has been used properly, fairly and according to the rules of reason and justice.

"It is the duty of court to strike a suitable balance between executive/administrative efficiency and legal protection of the citizen." The Appeal Court Case on Pramuka is unique as it was the first time in the banking history of Sri Lanka the Central Bank liquidated a bank.

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