TUs campaign for private sector salary increase

by Surekha Galagoda and Gamini Warushamana

Private sector trade unions have launched a campaign for a salary increase and demand a Rs. 15,000 minimum basic salary for private sector employees.

Secretary of the Inter Company Employees' Union and Janatha Vimukthi Peramuna (JVP) parliamentarian Wasantha Samarasinghe said that with the increasing cost-of-living the workers in the private sector have been compelled to demand a salary increase. Private sector salaries should be increased parallel to the government sector salary increase.

The Government has accepted that the minimum basic salary of the government sector should be increased to Rs. 11,730 to meet the high cost-of-living. In addition, government sector workers receive the Rs.2,100 cost-of-living allowance, he said.

The average minimum basic salary of private sector workers is less than Rs. 5,000. We conducted a survey in 250 private sector companies and of them only seven companies have the minimum basic salary above Rs. 5,000, Samarasinghe said. The estate workers are worse off and they get a daily wage of Rs. 145. The cost-of-living is sky rocketing. Fuel prices increased by Rs. 20 per litre within three months.

Employers are reluctant to increase salaries. This is a serious situation and the government has a responsibility to intervene, he said.

Samarasinghe said that all private sector institutions cannot afford the Rs. 15,000 minimum salary and the government should help them by providing tax concessions and other assistance to increase salaries.

Samarasinghe said that they have started a propaganda campaign to organise workers and will go for trade union action if the authorities do not respond positively.

Economic analysts warn that a stipulated higher minimum salary would create a crisis in the economy. Most of the foreign investments come to the country due to low labour costs. This would also be a burden on SMEs.

Chairman Ceylon National Chamber of Industries (CNCI) Nimal Perera said that the salaries of private sector employees are already higher than the public sector. The private sector, especially exporters were affected due to the strike at the Port which hampered exports severely. In the backdrop of all this if the private sector asks for a salary increase it will be a disaster, he said.

He said that as of now we are losing our competitiveness internationally due to high costs of power and raw materials. If companies have to shoulder an additional burden of a salary increase most of them will have to close down resulting in unemployment as well.

Therefore, before resorting to a strike they will have to think whether they want to safeguard their jobs or not. We are mindful of the fact that the cost-of-living is increasing but before asking for an increase they should put their best foot forward to safeguard their jobs so that they have money for food and shelter.

In the event a strike occurs multinationals will shut down the plants and leave the country. Companies don't wait for a strike to increase salaries as they value their staff and provide all benefits.

Employees are given annual increments and other incentives as well. Therefore we should all work together to increase productivity and bring our nation on par with all other countries who have forged ahead without starting strikes and crippling the economy.

In addition the government also needs to reduce its overheads so that they can reduce the cost-of-living.

Industrial Relations Senior Manager Katunayake EPZ, W.A.S.Jayasiri said that so far no representations have been made for a salary increase. He said that at the end of every year the BOI and the Manufacturers' Association get together and decide on the minimum to be increased based on factors such as the cost-of-living and foreign exchange rate.

Once the minimum is agreed upon each company is free to decide on their annual increments but it cannot be lower than the minimum stipulated. For 2005 and 2006 the minimum increase was Rs 600. All those employed in the zone are paid more than the amount stipulated by the Wages Board. There are 90 companies in the Katunayake Free Trade Zone and 70 companies have Employees Councils while three companies have trade unions recognised by the companies, he said.