Wage increases in the garment sector and the hotels have been put off due to the economic hardships and uncertainties faced by the two sectors. Minimum salaries of 38 sectors are due to increase from between 15% to 40% starting from July.

“Out of 40 wages boards we have approved wage increases in 38 wages boards. They were due to come into effect from July,” said the Commissioner General of Labour, D. S. Edirisinghe. However, in the textile and garment sector, only companies coming under textiles and hosiery will be immediately impacted. The majority of the local garment sector - that comes under the Garment Sector Wages Board - will not have to increase minimum salaries from July. The hotel sector will also not be affected.

“The salary increases in the garment and hotel sector are yet to be approved. But they will also have to increase salaries sometime this year. We are waiting for the (Labour) Minister to approve them,” said Mr Edirisinghe.

Both the garment and hotel sectors have requested that the wage increase be differed due to various difficulties faced by the two sectors. The garment industry for instance, is facing a situation of uncertainty in EU markets because of the possibility of losing GSP+ duty free concessions. Garment exporters are also expecting increased Chinese competition in US markets from next year, on top of possible loss of business from the US economic slowdown. The industry says it has also been hit by the dollar depreciation against the rupee. Given the future uncertainty, the garment sector has asked that the wage increase be put off.

“The industry agreed to a minimum 15% increase in salaries but wanted to differ the wage increase by 12 months,” said the Secretary General of the Joint Apparel Association Forum, T.G. Ariyaratne.
The hotel sector meanwhile says it is squeezed by reduced incomes and increasing costs and cannot afford salary increases this year.

“We appealed to the government to differ the wage increase because of the drop in business and the difficulties faced by the hotels. So the government agreed to differ the implementation by three months,” said the President of the City Hotels Association, M. Shanthi Kumar. The Labour Department said an implementation date for wage increases in the two sectors, is yet to be announced.