|
|
 |
 |
| Sunday, 22 February 2004 |
 |
|
 |
Features |  |
| News Business Features Editorial
|
Labouring under an illusion? The Termination of Employment of Workmen (Special Provisions) (Amendment) Act No. 12 of 2003, passed by the House in early January 2003, offered workers whose services are terminated involuntarily, a compensation formula based on the number of years worked and age of termination. The maximum compensation a worker receives under this formula is the salary for 20 months - for a workman with 10 years of service and under 50 years at the date of termination from service. It allows the employer to serve a copy of the application for termination to the employee at the same time the employer seeks approval from the Commissioner General of Labour whereas under previous act Termination of Employment of Workmen (Special Provisions) Act, No. 45 of 1971, the employer had to seek the approval of the Commissioner prior to termination and compensation was determined by the Commissioner on a case by case basis, taking into consideration an employees years of service, age at termination, cause for termination and the employer's capacity to pay compensation. Further, the amendment reduces the time period from the date of termination to settlement of the case with compensation, from six months to three months. The Ministry of Labour also proposes a 'safety net' for the workers by way of an unemployment benefit scheme, where the employee will receive half a month salary for a period of 12 to 18 months depending on years of service, and a scheme for re-training for those who wish to avail themselves the services. [ like the by line ] The new Termination of Employment Act has been introduced by government with a view to making Sri Lanka more competitive in the labour market. But many workers' groups and unions are up in arms against the amendments, which they say usher in a "hire and fire" era for employers. Are the proposed benefits merely illusory? Vimukthi Fernando tries to find out. Labour law in Sri Lanka like many other laws, are a remnant of the British Colonial era. During the time of the British empire and even in the post independence period, labour regulations were fashioned by the country's thriving trade unionism. However, in a more open global economy, some of the rigid trade union acts had become more hostile than conducive to the work atmosphere and had given investors the upper hand in the labour market. Experts say Sri Lanka's labour laws, and labour courts needed restructuring not only in the new millennium, but ever since they were established as quasi-judicial tribunals in the 1950s. The backlog, or the cases pending in these tribunals amounted to more than 6,000 in the early 60s. The rate fluctuated with time but has now come up to over 16,000 accumulated cases according to officials of the labour department. It is hoped that recent amendments to Sri Lanka's labour laws will bring about "expeditious disposal" of these cases. Introducing the amendments, that would fundamentally change employer-employee relations in Sri Lanka, the Minister of Employment and Labour Mahinda Samarasinghe said in Parliament that they would increase Sri Lanka's competitiveness in the international labour market. "Though we have delayed we have to compete with these countries and attract foreign investors in order to create employment opportunities in the country and be competitive internationally" the Ceylon Daily News of January 6, 2003 reported. Speaking of the amendments again at the 91st session of the International Labour Conference last June, the Minister said that "The recent amendments effected to the Industrial Disputes Act and the Termination of Employment of Workmen's Act were essential to strengthen the dispute settlement machinery by introducing new procedures for expeditious disposal of settlement of disputes at Labour Tribunals, Arbitration and Termination of Employment inquiries" as reported in the Ceylon Daily News of June 16, 2003. The argument is that the previous legislation vested arbitrary powers on the Commissioner General of Labour, for the decisions of approval of termination and the amount of compensation. While minimizing the powers vested on the Commissioner, the new scheme regulates compensation, stipulates specific costs and time limits. Therefore, it is more attractive to the investors and would increase Sri Lanka's competitiveness in the international labour market. However, the amendment came under heavy attack of the trade unions. Their outcry is that the legislation in itself is partial to the employers and lessens the benefits meted out to workers. The amendments make it so much easier for the employers to follow a "hire and fire" policy, say the unionists. Even at the moment of writing, picket action against the amendments goes on in front of the Ministry of Employment and Labour, organized by a trade unions alliance. The Sunday Observer spoke to leaders and representatives of workers unions and Labour officials to find out about the amendments. Bala Tampoe - General Secretary Ceylon Mercantile, Industrial and General Workers' Union (CMU) was vehemently against the amendments. "We are opposed to any amendment that entirely suit the wishes of the employers. The employers do not want any restrictions in hiring and firing," he said. The real issue is not the gazette notification, but the amendments to the Industrial Disputes (Hearing and Determination of Proceedings) (Special Provisions) Act No. 13 of 2003 and the TEW Act No. 12 of 2003, said Tampoe. He alleged that the minister of Employment and Labour had brought in these amendments without prior discussion or consent of the trade unions. The TEW Act No. 45 of 1971 was drafted with the objective of dealing with unfair dismissals, primarily retrenchments - a way to make a balance and to give the state, the right to decide whether to grant the employer permission for dismissal, he said. The CMU had been instrumental in bringing in the act, for the benefit of workers who participated in union activities and their strikes at the time. Though the TEW Act 45 of 1971 even as it was before was of limited value to deter the employer from trying to retrench, the benefits it offered are now being undermined or broken down entirely, he claimed. Under the Termination of Employment Act it is mandatory to have the prior consent of the employee, or the prior approval of the Labour Commissioner to dismiss an employee on grounds other than disciplinary action. Compensation varied, on a case by case basis depending on the capacity of the employer to pay compensation and the grounds which he was seeking approval. Under the Industrial Disputes Act, the employers are bound by a collective agreement to provide employment security for the worker, until the age of retirement. If an employee is to be dismissed before retirement, for reasons other than disciplinary action then the employer had to make out a case. This in fact deterred the employers from termination of employees, and promoted benefit packages such as voluntary retirement schemes to seek employee approval, said Tampoe. But, present amendments annul all of the above. They restrict the rights of the Labour Commissioner to hold a due enquiry and the rights of the workers and employers to present a case, he said. The compensation scheme is only a meagre representation of the previous scheme. It limits compensation for a maximum of 15 months whereas under the earlier scheme this could go on up to about 60 months. Comparatively, workers benefits under the present scheme are insignificant, he claimed. He claimed that the much talked about unemployment benefit scheme, introduced as a 'safety net' is not only a fraud but proves that the present termination procedure is a threat and poses danger to workers. The need of a safety net itself proves that this places the worker in a dangerous situation. The scheme offers employees, with a work period up to four years, half month salary for a period of 18 months and those who worked over five years, half month salary up to 12 months. And the scheme is still under discussion, said Tampoe. He questioned the feasibility of the proposal. "It is unrealistic. Who is going to monitor each worker whether he or she has obtained other employment? It is also a procedure that leads to corruption - bribes, political and other favouritism," he alleged. The re-training component of the scheme, is "a big farce", he added. Employees of an older generation with more social responsibility will be competing with a younger generation of employees without social responsibilities and willing to be employed at a lower salary rate. This is a scheme which is completely socially irresponsible, introduced to get rid of workers in employment and replace them with those on casual or fixed term contract basis, he said. Both the Employer's Federation of Ceylon and the Board of Investment had come up with the proposal to the minister to take off the present discretion vested on the Labour Commissioner as well, he alleged. It ultimately boils down to a scheme favouring employers and allowing them to retrench with minimum or no compensation at all, he said. Kalyananda Tiranagama - A well-known human rights activist and Executive Director, Lawyers for Human Rights and Development opined that the amendment has removed the protection afforded hitherto, to working people by law against arbitrary and illegal termination of employment and enables the employers to adapt a policy of "hire and fire" to the greater disadvantage and injustice to working people. The amendment contravenes the very objective of the Act's introduction in 1971, to secure employment and to prevent unreasonable termination. It also violates the fundamental rights stipulated in the Constitution of Sri Lanka - the right to engage in a lawful occupation of his choice and the right to equal protection of the law, he added. The TEWA of 1971 was drafted on the basis that the employer has no right to terminate the workers arbitrarily. However, the amendment is based on the acceptance of employers right to terminate, he said. Previously, either the prior consent of the worker in writing or prior approval of the Commissioner of Labour was mandatory for termination. If not, the case could have been taken up at courts. And there was no need of the involvement of the worker in the inquiry for the Commissioner of Labour was vested with the responsibility of conducting an impartial and independent inquiry. But, in the present situation though it is seemingly democratic (for the workman is given an opportunity of being heard), he or she is given only seven days to submit a response, which is impossible with the prevailing conditions of this country, he said. Earlier, workers as well as employers had ample time to file their cases, now everything needs to be completed within four months, said Piyal Munasinghe-Member of the Movement for the Defence of Democratic Rights. Though it is hoped to achieve this through new Labour Tribunals (LT), it is an impossible task, he claims. The LT workers are new and inexperienced. They take time to record the proceedings and produce legible copies. Further, the necessity to finish examining one witness at one trial is absolutely impossible. "Generally it takes about two hours to lead the evidence, cross examine and re-examine a witness. That is, provided the case is not complicated. If it is complicated sometimes this may take more than six hours. How can we conclude a case within four months and give a ruling." The first thing that should have been done before introducing the amendments is to have a consultation with LT judges and look for a smooth system of operation, such as allowing additional court houses/ court rooms. New LTs will not help. It is just a waste of public funds, he claims. Though amendments request the completion of the cases within four months, since it is not mandatory ultimately it will come to the same stagnated stage - but, with more expenditure, he said. Palitha Athukorale - Representative from the Jathika Sevaka Sangamaya (JSS) commented that the union is in favour of the amendment. Compensation or termination was purely on the discretion of the Commissioner, who is also human, he pointed out. When there is a standard formula, there is less opportunity for discrepancies. There was tremendous pressure from the business community to know the quantum of compensation, they also insisted on curting the authority of the Commissioner, seeking approval prior to termination. Their argument was that the employers should have the right to hire and fire. The stipulated compensation formula is higher in Sri Lanka, in comparison to that of the region, he said. Athukorale alleged that there is money idling in the Employees Trust (ETF) and Provident (EPF) funds, which is of no benefit to the employee. These present benefit schemes are nothing compared to the benefit scheme proposed, he claimed. Commenting about the implementation of the proposed scheme he said that it would be quite practical and could be effected in a sustainable manner. Mahinda Madihahewa - Commissioner General of Labour and A.P. Wickremasinghe - Assistant Commissioner - Labour Standards Division, commenting on the amendments said that the need for the amendments to the TEWA, arose as a demand from both investors and workers for certainty. While the investors wanted to know how much it would cost them to terminate a worker, workers wanted a guaranteed sum which they would get in case of involuntary termination. There were many discrepancies in the previous law and the present formula offering better forms is comparatively better for the workers. Sri Lanka was lagging behind countries of the region, which carried formula compensation and now, we are in line with other countries, they said. The amendments were not arbitrary. They had continuous consultations with the employers and workers unions and international monetary institutions such as World Bank and IMF, and the International Labour Organisation (ILO). Further, these amendments are in accordance with the rules and regulations stipulated in the Termination of Employment Digest, by the ILO, they said. It also reduces the waiting time from the date of termination. Meanwhile, the employee benefits greatly from the Unemployment Benefit Insurance Fund (UBIF), through the receipt of a dole (50% of the last drawn salary) until such time he or she finds employment, to a maximum of 12 to 18 months. In addition to the dole, the employee will be entitled to the facilities of career guidance, job placement, training and re-training, and self-employment promotion through 17 job-net units island-wide. The amendment offers employers the freedom to restructure a company, reduce staff, retrench and encourages labour mobility, they claimed. This would attract foreign investors for they would know in advance how much it costs, therefore increasing competition in the international labour market. With new investments and industries coming in the economy will naturally get a boost they pointed out. As to adherence of the time limits in the Labour Tribunals (LT) they said that it would not be a problem as the Commissioner General of Labour does not get many cases of termination. It is in the range of less than 100 cases per year. The Commission is well staffed (25 members at the Head Office) to expedite the applications received and they would seek assistance of the district offices if the pressure is high. As of January, 26th, the Commission had received only one application under the present Act. As to the financing of the proposed safety net, they said that the treasury has guaranteed payment, by way of underwriting a loan from the EPF. As alternative methods, a contribution system from the monthly salaries 0.15 percent from the employer and 0.1 percent from the employee is proposed. There is also an understanding from the side of the employers that they would pay the dole. The Sri Lanka Nidahas Sevaka Sangamaga (SLNSS) is totally opposed to the amendments, said its General Secretary Lesley Devendra. The Minister of Labour has completely misled us on this issue, he said. Under the previous law, there was power to negotiate and get compensation based on the company's ability to pay. That has been completely cut off by new legislation - it is according to a standard formula regardless of the number of years worked or the situation of the worker, he said. The minister promised us that this compensation scheme would be a bonanza, but now we see it is almost cut down by 100 percent. It is a very poor termination scheme completely in favour of the employers, he said. |
|
News | Business | Features
| Editorial | Security Produced by Lake House |
