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| Sunday, 8 May 2005 |
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Business |  |
| News Business Features Editorial
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Trade Union power and economic growth by Lloyd F Yapa Sri Lankan trade unions are in the news again for the wrong reasons. Before examining, what is wrong or right with trade unions, an examination of a definition and their functions is in order. One of the definitions could be that they are "organisations of employees or workers within a trade or profession". The function or objective of such trade unions is primarily to represent the interests of their members for improving their pay and conditions of work, in the face of the tendency on the part of some employers to exploit their employees. Sometimes trade unions would also provide a number of other services for improving the living standards of workers. Politically affiliated In Sri Lanka, most of the unions are industrial unions, where workers of a given plant or firm or a given industry are organised into a union, (whatever their skills), as distinct from craft unions, which are associations of workers with similar skills. A further characteristic, a conspicuous one at that, is they are affiliated to the major political parties. Sometime ago, in this column, it was pointed out, that employees have their rights and they should be treated as assets to be developed for the sustainability of business itself. It cannot be realised without the enthusiastic support, not just the labour and skills, of the workers. However, when trade unions push up wages, using their union power, beyond the market (wage) rate, at which demand for labour meets available supply, unemployment is created. This may happen, when employers stop recruiting, when the higher wage makes their businesses uncompetitive and unprofitable. If the regulations also happen to be rigid so as not to permit a flexible formula for such businesses to seek a legal solution to the problem, employers may resort to other means, which would make unemployment worse than it is. They may resort to capital intensive technology or employ workers on a contractual basis to reduce their costs. They may also surreptitiously resort to recruitment on a casual basis, the worst form of which is withholding letters of appointment and failing to specify details of pay and non payment of EPF and ETF benefits. When corruption is rampant, such violations of human rights may go
'undetected', right under the noses of those concerned. What is more,
employers may also be disinclined to carry out their duties such as
listening to employee grievances and undertaking the rather costly task of
training the workers to improve their skills. |
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