Unions decry ILO initiated labour law amendments

by Rohana Jayalal

The Inter-Company Employees Union (ICEU) concedes that labour statutes need changes with the passage of time, but it should not be at the cost of the workers' interests.

President, ICEU, Wasantha Samarasinghe told Sunday Observer Business that the Union is aware that action is being taken to amend several labour statutes in a manner which is detrimental to the working class as a whole.

He said the Industrial Disputes Act, the Shop and Office Employees Act, the Termination of Services Act, the Trade Unions Ordinance, the Payment of Gratuities Act, the Worker Compensation Act and the Wages Board Ordinance are some of the labour statutes proposed to be amended.This has been initiated at the behest of the ILO and funded by the Swiss International Corporation Agency and the American Labour Department.

"It is incumbent on the government to discuss this vital issue with trade unions and place it before the National Labour Advisory Council and ensure that it meets the aspirations of the working people," Samarasinghe said.

"This hybrid government is determined to suppress the rights of the working class and dilute the important labour statutes at the whims and fancies of the employers," he said.

"The ILO appears to be indifferent to this issue which affects Sri Lanka's working class. We cannot expect the ILO to work in the interests of our people," Samarasinghe said.

Retired Supreme Court Judge Justice R.K. Suresh Chandra said there are two main theories on the role of the State in labour law, the protective theory and economic rationalization (libertarian) theory.

"While both theories aim at an equitable outcome between the employer and employee, protective theory calls for State intervention to negate inequalities in bargaining power through legislation, while economic rationalization seeks to foster private decision-making and market forces, with the State acting merely as a facilitator, without intervening directly. However, the State should act as a regulator and a facilitator," he said.

He said legislation has been enacted on the basis of Sri Lanka's being a social welfare State. Much of Sri Lanka's protective labour laws were passed in the first half of the last century, including the 1935 Trade Unions Ordinance (that defined Trade Unions, and provided their rights and regulations), the 1934 Workmen's Compensation Ordinance and the Wages Board Ordinance of 1941 (that created a minimum wage).

Many of these laws are outdated and irrelevant in a country now heavily affected by globalization and other current issues. "It may be necessary to consider whether these statutes need amendment to facilitate development," Justice Chandra said.

He said that the way forward for Sri Lanka is to make advances in productivity. For this to happen, there needs to be a change in attitude. Unions should recognize that they have responsibilities to the employer and the employees and employers must address the needs of labour, and give employees a sense of responsibility and opportunity to improve their skills.

"It is necessary to improve employee performance to increase productivity," he said, adding that "improved productivity could benefit society with better quality products at competitive prices". Director General, Employers Federation of Ceylon, Ravi Peiris said Sri Lanka's tightly-regulated labour system was due to historical reasons.

"We have had these laws enacted at a time when the labour movement was very strong, and if you look at most of these laws, they have been enacted between 1925 and 1960, when the governments of Sri Lanka relied on the trade unions and the working class to bring them to power," he said.

Peiris said what he saw as an attitude among policy makers, of attempting to 'protect the employee' and a misconception among workers that these laws actually protected their interests and secured their employment.

Peiris criticized this view, claiming that "true security of employment cannot be obtained only through laws," but through a basic relationship between employer and employee. Peiris said that many statutes predate the 1980s, when globalization increased and the economy was opened.

He lamented that forms of employment common in other parts of the world, including fixed term employment, flexible hours and working from home have not been able to fully break into Sri Lanka as employers are stifled with a set of regulations enacted in the 1940s and 1950s.

The overwhelming burden of old legislation has caused many business owners to operate outside the system, he said, creating an imbalance where those who follow the rules have to compete with those who do not. "We have placed emphasis on law, rather than establishing relations. Our attitude has been, whenever, there is a problem, enact a law," he said.

Peiris specifically cited the Industrial Disputes Act of 1950, which he claims created a conciliatory arbitration process with no mechanism to avoid a dispute. General Secretary, CMU, Sylvester Jayakody said the Industrial disputes Act and the Shop and Office Act were the main laws that governed the workers' rights and streamlined working conditions for decades.

There were many shortcomings in the law and employers could evade responsibilities in many ways due to lack of monitoring agencies on the part of the State. However, the laws were there and to a certain extent they benefited workers in many ways irrespective of whether they were members of trade unions or not.