Are trade unions necessary?

The employer's federation of Ceylon The flagship organisation which has most of the leading firms under its umbrella which safeguarding the interests of its members has always sought to act fairly in matters affecting the welfare of the employers.

In an interview given to Deepal V.Perera , the Director Genral of the federation Mr. Franklyn Amarasinghe had candid answers to many questions put to him.

Excerpts.

Q. How important is the human resources management to an organisation.?

It is now seen as the most important issue world wide. Because unlike in the old days labour was treated as a commodity, it has become the practice to value the worker's knowledge more than labour itself. Now the people in employment are looked at as a resource, which should be involved in day to day management. So from the point of view of the management the focus has changed from the hierarchical structure, where the decisions are taken from bottom upwards with the involvement of employees. Now there is more discussion moreteam work and small group activities. We see this as something of a challenge to get employees to think more in terms of employee involvement than having hierarchical structure.

Q Being a member of the EFC, what are the benefits that an employer can get?

First of all they are kept up to date, with regard to labour regulations of the country. We also send out circular publications and we have professional staff here to give them advice. So they are kept best of all developments in the labour laws and practices which are required to have industrial peace. Secondly we represent our member companies when there is a labour dispute. Whether it is a labour tribunal or arbitrator matter we give representation. Thirdly we do lobbying with the government and the Department of Labour on issues regarding employment and changes in labour legislation and changes in practices . We also represent our members at international level. Because ours is the only employer's organisation recognised by the International Labour Organisation.(ILO). We are also part of the international organisation of employers. Therefore we are in a position to get the latest information regarding any employment issues. We also get assistance from developed countries like Japan, Australia and Denmark.

Q. How do you advice your members for keeping the institution free from industrial disputes.?

What we do is , we tell them to stick to the best practices. So in that way they can avoid a dispute. For example we have given our members a manual of procedure and a hand book showing them how to react when there is a dispute.

And also they come to us for our advice Then we try to take preventive action. By advising members to watch out for danger signals.

In the event of signals being seen we give suggestions to overcome the dispute. So in that way we really assist them to avoid confrontation or a situation where workers would take trade union action.

QWhat is the relationship that the Federation has with the trade unions.?

We have a good working relationship with the trade unions. It has been built on the basis that trade unions knows that our members follow the labour laws of the country.

They also know that we are interested in collective bargaining and dialogue, in the sense we are prepared to sit down and discuss the issues.

Over the years they have found that we deal with them purely on merit and that we don't have any political backings etc.

So because of that we have a good relationship with the trade unions.

Q What requirements should an employer have if he wished to become a member of the EFC.?

There is one requirement. That is we want every employer to follow the labour laws of the country.

Because we don't want to have employers who are seen by the employees as being exploiting them. We generally interview the people who want to join us on the basis that they must comply with the labour laws.

In some instances we had new members who were having problems due to ignorance or had violated some labour laws. So the first thing we do is to help them sort out these problems.

Q Is it always necessary to have a trade union in an organisation.?

I wouldn't say it is necessary. Because trade unions usually are formed in the work place because there are grievances of the workers which are not addressed by the management.

If you take our own membership of the federation it is only a very small percentage that have trade unions in their organisation.

Q How do you advice your members on providing good welfare facilities to the employees.?

We help our members with advice, if they want to find out what we should do in relation with canteen facilities , lockers or bathing facilities or even meeting funeral expenses.

We advice them case by case and we don't have any printed guide lines for them. We always go on the basis that, what the Ceylon Tobacco Company can afford is not what a small company can afford.

So the welfare measures need to be tailormade to the size of the company.

Q. In what light do you see the current labour laws in the country.?

We need drastic changes. There are some labour laws which are over 100 years old. But they are still on our statutory books.

In fact the ILO has a project to codify the labour laws here. And our suggestion was, that we should sit and look at laws which are outdated and try to form a simple body of law.

One of the major problems we have here is neither the investors nor the workers understand the labour laws.

Sometimes even the department of labour don't understand the labour laws. Because it is such a huge mass of laws. There are something like 49 pieces of legislation.

So the number one need is to streamline the labour laws. And the number two is to understand that the law is a living process. If you look at the laws of any country you may find each year they review the system.

In fact in Sri Lanka we have a law commission. It is an ongoing process. Every day you have to look how relevant the laws are to the society. Our legal system , as far as labour laws are concerned totally unrealistic and anarchistic.

It is completely out of tune to meet the modern employment conditions. So we need changes.

We have made lot of suggestions over long periods. But there have been no changes on this regard.

Q Most of the trade unions are supported by politicians. How do you see that?

The fact is that politics do not play any role in the trade unions any longer. It used to be so in the early stages but now you take for example the trade unions like JSS and SLPA or CP, you find the members of trade unions have no political affiliations at all.

And now they are not prepared to be guided by political views or political ideologies any longer. That was a thing of the past. The only area we can see a political intervention, is in the plantation sector.

It is not the political party that runs the trade union , it is the trade unions that run the political party. Right now the members of a trade union belong to that trade union because that particular trade union has formed a branch in that establishment.

They don't have any political links at all. The best example we can take is the Ceylon Federation of trade unions which is affiliated to Communist party.

Now that union has become one of the progressive trade unions you find in this country. There they talk about productivity and always are prepared to discuss and assist the management.

So if you think that they belong to the CP and will be difficult to deal with and that they look at employers as capitalists, it is not so.

But one must mention that without trade unions, there are politicians involved in industrial disputes. That is to build up their own political career.

Q How do you see the human resource management beyond 2000?

The human resource management function has to change to a great extent that, instead of having it centralized in a company. Where you have a HR dept each unit in the workplace will have its own manager who performs the human resource management function.

Every manager must become a human resource manager. You might centralize the personal manager function which is quite different from HR management function. And HR management function is more focussed on employee in development.

For example the personal manager takes disciplinary action against the employee. HR management task is to see how he can reform the employee, and motivate him to perform better.

Therefore the HR management function is something that must be decentralised when every manager understands that he has a challenge to motivate his team under him. In future I think that is what is going to happen.

In fact some years ago in a certain country the HR managers were losing their jobs. Because in that country there was a clear desire to make every manager as a human resource manager.

Therefore there should be a centralised personal management function for the sake of record keeping. The actual task of the HR manager should be performed by the line managers

Emirates the best: UK readers vote

Frequent travellers in the United Kingdom, have once again voted Emirates their Best Airline, in a readership poll conducted by the country's leading London's Sunday Newspaper,'The Observer'.

Emirates emerged overall top carrier in a nation-wide survey of 16,000 readers who completed a questionnaire rating the quality of service for airlines, travel agents, travel companies, ferry companies, brochures and destinations.

'The Observer' has a circulation of 400,000 across Great Britain, an Emirtates news release says.

Sheikh Ahmed bin Saeed Al Maktoum, Emirates Chairman is quoted in the release: "The Observer's annual survey is especially significant as it gathers the opinions of UK's travelling public. We are grateful that our customers have once again, voted for Emirates. As the Best Airline, we intend to stay that way; we will keep working hard to keep our standards high - the same standards that our customers have voted for".

This is the fourth time Emirates has swept the Observer polls. The three previous occasions were in 1994, 1996 and 1997.

Emirates' victory came shortly after the airline won its Second Airline of the Year title in the annual poll by UK's Executive Travel magazine.

The Observer commented on Emirates' win: "Far-sighted investment in the latest aircraft and equipment has been translated into a winning formula. The key to Emirates' success could be that economy passengers are not overlooked. They enjoy reasonable leg-room, are served five-course meals with good wines and watch the same 16-channel airshow on their seatback screens as do business passengers".

The Observer adds: "Other airlines keep watching to see what Emirates will do next". Emirates, which is approaching its 13th anniversary this October, has won more than 160 major international awards. The airline now serves 45 destinations in 37 countries with a fleet of seven Boeing 777s and 15 Airbus aircraft.

MBL workshop on market needs

Market Behaviour Limited (Lanka), one of the leading market research companies in Sri Lanka, recently hosted an exploratory brainstorming workshop seeking to evolve common methodologies and modalities for market research activities in more than 17 countries.

Twelve international market research experts from the MBL network and its Australian Associate CM, representing operating companies in Europe, the Middle East and the Asia Pacific region, attended the three-day conference, which is believed to be the first of its kind to be held in Sri Lanka, a news release says.

"Increasingly, marketing decision makers around the world are demanding a similarity in the parameters, standards and practices of market research in order to compare makets in different countries", Ravi Bamunusinghe, MBL's Managing Director in Sri Lanka, explains in the news release.

"Our objective was to exchange ideas across the MBL network on how to get the best out of the synergy we have as a multinational group."

Mary Goodyear, co-founder of the MBL group, said one of the key purposes of the workshop was to try to anticipate the information requirements of clients in the future, in the context of the rapidly changing markets around the world.

"Research is a problem solving discipline, and the research parameters have to be established as you approach the problem. We are looking for the common threads that can be applied to the methodologies we use in this process," Mrs Goodyear has said.

Delegates to the workshop, who were drawn from senior managment of MBL operating companies, represented Australia, New Zealand, United Kingdom, Hong Kong, Taiwan, Philippines, India and several countries in the Middle East.

Sri Lanka was chosen to host the conference because of its location as a geographical mid-point in the MBl network and because Colombo was a reasonably well connected value-for-money destination, Mrs Goodyear said.

The UK headquartered MBL Group is affiliated with the American research and information giant NFO Research Inc. which is listed in the New York Stock Exchange (NYSE). NFO is rated by Forbes magazine as one of America's 200 best small companies The NFO - MBL group's annual turnover exceeds US $ 190 million (more than Rs 12 billion).In Sri Lanka, the group is represented by Market Behaviour Limited (Lanka), which has been a major player in the local market research industry for more than three years.

Lanka - Pakistan Business Council

At the annual general meeting of the Sri Lanka Pakistan Business Council (SLPBC) recently, Gulam Chatoor was re-elected as President and Sega Nagendra and Michael de Zoysa were re-elected as Vice Presidents for the ensuing year.

The following members were elected to serve on the Committee for 1998/99:

Almar Trading Co. (Pte) Ltd., Eswaran Brothers, Sherman Sons Ltd., Standard Trading Co. (Pvt) Ltd., T.A.J. Noorbhai & Co. Ltd., James Finlay & Co.Ltd., Habib Bank AG Zurich, Muslim Commercial Bank and Habib Bank Ltd.

Aggressive selling takes Eagle to the top

CTC Eagle with turnover of Rs. 723 million, was able to achieve a turnover growth of over 23% in the first half of 1998.

The Company Chairman Gottfried Thoma said in a news release: "There was a 31% growth in Life new business production, a result of the focused strategies adopted this year by the field force and sales management team."

The General Insurance business underwriting profit of Rs. 21 million was 12% above 1997, although claims were 50% above 1997. Investment income was down by Rs. 3.6 million on account of the lower yield on fixed income investment and the fall in the market value of equities. The company adopts the market value basis of accounting and all equity portfolios were written down to the depressed market values. A company spokesman says that "All portfolios outperformed benchmark yield and the adverse impact of the fall in market values was reduced by aggressive selling and reduction of equity exposures, by nearly 50% in all portfolios, in response to the sudden change of stock market outlook after nuclear explosions in India.The share of Eagle NDB Fund Management loss, after adjusting for minority interest is Rs. 2.8 million above 1997. The increased loss in Eagle NDB Fund Management is mainly due to investments made in building brand value of Eagle Mutual Funds. The profit of Rs. 26 million attributable to the company for half year, is marginally below 1997.

CTC Eagle has announced that the Controller of Insurance, under advise from the Attorney General's Department is proposing to take action against the insurance broker who failed to honour commitments to the company and that the company is seeking further measures to safeguard the shareholders.

IM president stresses Professional management

The new President of Insitute of Management, M.V. Theagarajah, in his inaugural address said that the British Institute of Management (BIM) which was formed over 50 years ago in 1947, had a distinguished history and subseqeuntly changed their name to the Institute of Management five years ago when they merged with the Institute of Industrial Managers.

With over 80,000 individual members and 600 corporate partners, it is the largest broadly based management institute with over 6500 members in 143 countries outside the UK.

Mr. Theagarajah stressed the need for professional management which is not only required at the highest levels but also at middle and even lower levels of management.

"The private sector has a great role to play in the economic growth of Sri Lanka in the years to come, especially if we are to face the challenges in the next millennium," he said.

"Our institute will do everything possible to channel the resources available in the UK to ensure our contribution in this regard by way of seminars, training courses, etc. which would stimulate the thoughts of our members to better their performance and their effectiveness".

Mr. Theagarajah said that the two most recognized management authorities in the world - Peter Druker and Isao Nakauchi - had stated that the key challenge for Asia is the role of the government, and that they see the business organization developing into a social entity which will marginalise government into a role of decreased regulation, encouraging a free market economy which relies on a personal responsibility for development and progress within the organization.

"How true this is in the context of our country Sri Lanka, where we are seeing this happen before us with divestiture of government owned organizations taking place and privatization the rule of the day," said the new President of the Sri Lanka Chapter.

At this year's AGM the chief guest was Deputy High Commissioner of UK, Peter Gregory Hood -while the guest of honour was the Director of the British Council Ms. Susan Maingay. In his address Mr. Gregory Hood said that the British High Commission would at all times support the activities of the Sri Lanka Chapter.

At the second annual general meeting of the Sri Lanka Chapter of the Institute of Management UK, M. V. Theagarajah was elected President, Bandu Wanigasekera Vice President, Sunil Deheragoda Secretary and Gamini Karunaratne, Treasurer.

SatLink takes in Lanka

BT today announced the expansion of its portfolio of telecommunications services in Asia with the launch of SatLink Asia, a transborder service now available in Sri Lanka and 5 other markets.

SatLink Asia, developed by BT's satellite experts, is the first pan-Asian satellite service offered by BT, and will extend the company's coverage across the region into key markets, a news release said.

Ian McKenzie, Chief Operations Officer, BT Global Strategic Markets, said, "SatLink Asia was developed to meet the increasing demands of multinationals and large regional corporates for dynamic and reliable telecommunications services wherever they do business in Asia.

SatLink Asia offers them connectivity into remote areas where infrastructure is poor or service is unavailable. By providing a reliable, resilient and highly secure solution, SatLink Asia is a real and attractive alternative to current communications available in the region."

'By strengthening our service offerings, SatLink Asia will build the overall portfolio available to business customers through BT and, when the deal closes, our new joint venture with AT&T."

The service will provide sophisticated and reliable telecommunications connectivity for organisations across Asia and enable them to operate at the same level of business efficiency no matter how remote their sites.

SatLink Asia is specifically designed to meet the needs of all sectors for connectivity across Asia, and will especially meet the needs of corporate customers in the sectors of manufacturing, TT and high technology, banking and financial services, and energy and resources .

CMU fights back while political unions lose sting

By Feizal Samath

When a Sri Lankan trade union protested against laying off labour at the local Coca Cola company last year, it lost the battle despite a 80-day strike that hurt production.

But a few weeks later the company negotiated a collective agreement with the union, giving workers a 20 percent rise per year under a three-year deal.

"We may have lost the first battle, but the company, conscious of our strength, negotiated a better deal for workers because it didn't want any more work stoppages that would disrupt production," said Bala Tampoe, veteran trade union activist and General Secretary of the Ceylon Mercantile Union (CMU).

Slowly, trade unions in Sri Lanka, led by the CMU are leading a renaissance in tackling transnational corporations and other foreign investors who abhor trade unions and worker's rights.

Fighting for worker's rights and benefits in the workplace is much more difficult with foreign investors, who are assured by governments of the least amount of interference and who are prepared to move their investments to other countries if labour disrupts production.

While the CMU, Sri Lanka's oldest and most powerful trade union group, has -to some extent - mastered the art of negotiations with multi-nationals through collective bargaining, many other local unions are worried that a growing flight of foreign capital into Third World nations like Sri Lanka would disturb the workplace environment.

Dr. Jayadeva Uyangoda, a lecturer in political science at the University of Colombo, believes that trade unions are facing a series of challenges from open economies and the encouragement of foreign capital in many developing countries. He said many of the regimes were no longer "labour friendly" as in the past; they were "capital friendly". Also under the new forms of industrialization, most of the new labour is non-unionized with the result that the emerging labour force is fragmented, and even atomized as a social group. Quoting from a 1996 study done by the International Union of Food workers (IUF), he says the free market model of globalization has created " unprecedented global competition leading to a downward spiral in wages and working conditions as workers on a global scale are forced to underbid each other to survive."

Tampoe, who completed 50 years in the CMU this year and is Sri Lanka's most strident voice in the union movement, says trade unions have to go global to counter globalization.

"Like transnationals, we must have cross border interaction and contacts with the international trade union movement. As a joint force, we are better equipped to face the challenges of the future,"he said.

In the late 1970's when Sri Lanka moved away from a command economy to a more liberal one, foreign investors were enticed to specially-created free trade zones and told that they would be allowed to operate without hindrance from trade unions and under "absolute peace and quiet" policies. While investment zoomed in the zones, strikes were banned and trade unions not allowed to function. Over the years that has changed following criticism from all quarters.

Most government officials, dealing with investment, and economists believe trade unions must also change with the times and seek consensus and compromise instead of taking a confrontational approach. Lakshman De Mel, a retired trade secretary now working in the private sector, says that the era of confrontation is over.

"If foreign capital is not allowed some peace and quiet, they would go elsewhere and that would create other problems".

He believes the classical role of the trade unions must change by adapting to changing circumstances in globalization where most developing countries are inviting foreign capital to solve a multitude of problems.

"If you want to create jobs, you need foreign capital. So what do we do? There has to be a happy compromise between inviting capital and ensuring labour rights," he said.

Unlike the CMU, much of Sri Lanka's union movements have political motives. Many are offshoots of political parties who want to promote their own interests. There has been competition among unions to inflate membership and very often members move from one union to the other, when governments change.

But in recent years, the government has downsized or sold off ailing state firms under the process of privatisation.The private sector has taken the lead as the engine of growth and has thus become a far bigger employer than the state.

In this scenario, political considerations in job creation has taken a backseat and ruffled the trade union movement, mostly the politically-motivated ones which relied on state enterprises as job banks for their members.

"Productivity is playing an important role nowadays, unlike in the past. Politically motivated unions no longer have an influence and no more is there a massive shift in membership. For the first time trade unions have to rely on collective bargaining than rely on the government or a coterie of political patrons," says G. Dissanayake, Deputy Secretary-general of the Employers Federation of Ceylon.

The CMU, perhaps, understands that position most and has been able to move with the times faster than any other trade union movement. It has been able to enter into agreements, through the collective bargaining process, with many multinationals like Singer, Nestle's, British American Tobacco, Unilevers, Brooke Bonds-Liptons, Reckitt and Colman and now Coca-Cola.

UTE sells vibrator rollers to RDA

United Tractors & Equipment Ltd, (UTE) has successfully won a 60 million Japanese Yen tender for the supply of nine HAMM DV 6.42 Tandem Vibratory Rollers with Double Drum Vibration. Their client the Road Development Authority (RDA) had purchased these HAMM rollers under the Overseas Economic Co-operation Fund (OECF), a news release says.

Each HAMM roller has an operating weight of 7000 kgs and is powered by an air cooled turbo 4-stroke diesel engine with a total compaction force of 45,225 pounds. Its Hydro Static All Wheel Sero Steering offers a choice of three modes of steering - a front, rear as well as analogue, the release adds.Todate UTE has sold over 75 HAMM road rollers and other types of compaction equipment to leading government and private sector companies such as the RDA, SD & CC, the Colombo Municipal Council, the Ports Authority, the Armed Forces, the Southern Group and CML Edwards.

The repeated purchases of HAMM equipment by these customers is ample evidence of the confidence they place in the high quality of HAMM equipment and the after market product support service of UTE which has marketed HAMM equipment for the past 12 years.

HAMM AG Germany, which was one of the first companies to producce a motor driven road roller way back in 1911 during the age of steam, is a leading manufacturer of road construction and compaction equipment in the world.

HAMM offers the full range of road construction and compaction equipment to suit different needs of road builders and contractors. With over a hundred years experience in this field, HAMM products are world renowned for their proven performance, lower maintenance costs and suitability to rugged conditions, the release says.

Ceylinco plans luxury homes in Colombo

Ceylinco Homes International (Lotus Towers) Ltd., and the Board of Investment (BOI) last week signed an investment agreement to build a luxury apartment complex at Barnes Place, Colombo 7.

The project is estimated to cost over Rs. 500 million, a company release said. The apartment complex will be developed on 100 perches of land located in an exclusive residential area. It will consist of 50 apartments in a five storey building which will be provided with comprehensive property management services, the release added.

A spokesman for the company said this is the first project of its kind to be undertaken by Ceylinco Homes International (Lotus Towers) Ltd. A previous project undertaken by Ceylinco Homes International is the popular ''Lotus Grove'' luxury housing complex in Dehiwela, they said.

Com. Bank reports highest profits

The Commercial Bank of Ceylon Ltd. has recorded the highest volume growth in profits in the six months ending June 30, among listed local banks, and also achieved the highest percentage growth in deposits, advances and total assets over the balances as at December 31 1997, a bank release says.

Figures released by the bank last week show that pre-tax profit for the period January-June 1998 totalled Rs 351.8 million, up Rs 73.5 million over the corresponding period last year, while post- tax profit for the same period was up by Rs 70 million to Rs 272.8 million.

Meanwhile, a comparison of percentage growth in deposits, advances and total assets over the balances as at December 31 1997, reveals that the Commercial Bank leads the local banking sector, with deposits up 9.96 percent, advances up 12.11 percent and total assets up 11.81 percent, the release added.

These figures indicate how the bank is likely to perform for the rest of the financial year, a bank spokesman says in the release.

He said a significant feature of the bank's performance in the first half of 1998 was the fact that sector-leading profit growth had been achieved with a marginal increase in turnover, indicating the bank had improved its cost of funds on deposits, and substantantially contained operating costs through productivity gains.

The bank had also reduced its effective tax rate to 22.4 percent from 27.1 percent last year, as a result of the application of the reduced tax rate announced by the government and effective tax planning measures, the spokesman has said.

He added that the bank's performance in the first half of the year was especially noteworthy because the profit figures are computed after making adequate provision of Rs 75 million (about 92.4 percent more than last year) for possible credit losses.

One of the highlights among the Bank's activities during the period under review was the issue of an unsecured, subordinated, redeemable debenture to the value of Rs 250 million. The issue was oversubscirbed by nearly 100 per cent on the day the issue opened, reflecting the confidence of investors in the Bank.

The Commercial Bank has 56 branches countrywide of which 52 are connected through ComNet, the largest computer-linked banking network in Sri Lanka.

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