Budget relief for security industry

by Nihal de Alwis

The Budget Relief Allowance had been approved for the Private Sector in the form of a Draft Bill calling it “An Act to provide for the payment of Budgetary Relief Allowance” by the employers to workers and for matters connected and with or incidental to. It is learnt that it has been drafted by the Legal Draftsman’s Department on the instructions of the Cabinet. The title of this Act according to the Draft Bill will be (a) “This Act may be cited as the Budgetary Relief Allowance of Workers’ draft Act of 2015. (2) The provisions of this Act shall be deemed for all purposes to have come into operation on May 1, 2015. The Commissioner General shall be the Competent Authority for purposes of this Act according to Section 2. With regard to the Head of the Draft Bill called “Payment” Section 3 (1) states with effect from May 1, 2015, any employer in any industry or service shall in respect of each month pay to every worker employed a Budgetary Relief Allowance (hereinafter referred to as “ the Allowance”) calculated on the following basis:

In the case of a workers whose monthly wages or salary is Rs. 40,000 or below, the allowance payable shall be Rs. 1, 500. This includes the Security Trade.

Section 9 of the Act indicates an Allowance payable to workers under this Act shall be deemed for all purposes to include:

Contributions to Employees’ Provident Fund, Employees’ Trust Fund and pension.

Wages or salary of annual holiday or leave
Overtime remunerations
Maternity benefit payment

Gratuity

The proceeds to pay and shall constitute part of the wages or salary of such worker. Every employer of such worker shall pay such allowance within the period within which such employee is required by any relevant written law to pay the wages or salary of such worker.

Obligation of employer

Under Section 5 (1) the employer of a worker in any industry or service shall from and after the date of the coming into operation of the Act, maintain and keep in the premises in which that industry or service is carried on a register setting out –the name of each worker.

The class of work performed by each worker

The amount paid to each worker as an allowance in accordance with the provisions of the Act. It is imperative that such registers are preserved for a period of six years by the employer and subject to inspection by the Commissioner General of Labour or any other designated person by him.

Emoluments - According to this is a Rs. 1,500 increase –

If a Security Company calculates according to the provisions of the Act including, EPF, ETF, Gratuity, overtime etc., approximately a sum of Rs.5,100 will be the increase for a month per Security Officer and if it is to be from retrospective effect as from 01st May, 2015, for eight months, the cost to be borne by the Security Company will be Rs.40,800 (per Security Officer) and if this Security Company has 100 employees he will have to pay Rs. Four million eight hundred thousand for eight months. A client will definitely refuse to make such payment from retrospective effect due to the following reasons:

Firstly, the contract the security company has had with the client had been for a different fee.

Secondly the client has been invoiced from May till December by the security company for the services and the amount has been already settled by the client.

Thirdly, the client has to be given prior notice of such an increase so that their company could have budgeted their expenses accordingly.

Fourthly, Ii any client is not in the services of ones company as from October 2015, no client will agree to pay as the contract with the Client indicates the Security Company has no more dealings and therefore the security company has no right to claim from an ex Client.

Fifthly, under these circumstances those employees who have already left the services of the Company and whose gratuity has been paid and who have worked till November 2015, will also claim their dues. How does one settle such dues? What a calamity?

There are about one hundred thousand employees involved in Industrial Security in this country, and the Industrial Security Foundation will, I am sure be more than happy including most employees of Security Companies to pay a minimum wage of Rs,.30,000/- to a Security Guard who performs 9 hours with one hour lunch break. Such an increase will certainly help the Security Trade to recruit better personnel and ensure that there is continuity of employment by the Security Officers creating better opportunities and enhancing the quality of Security Services. It is unfortunate that this increase has been created with retrospective effect without enforcing it as from January 2016 or May 2016.

The Security Trade headed by the Industrial Security Foundation incorporated by Act No.51 of 1999 along with its president and some of us have brought this to the notice of the Minister the impediment caused by such impractical salary increase and to the Commissioner of Labour. We are confident consequent to the speech made by the Prime Minister in Parliament on December 14, that sanity will prevail in implementing this Budget Relief Allowance before it is implemented as it is still in draft stage. We certainly hope the Cabinet of Ministers and Members of Parliament will look at this budget review allowance in a sensible manner in its implementation as the Security trade is more than happy about this increase but we are only perturbed about it being brought into effect retrospectively rather than be brought forward so that sufficient time is given to the security companies to negotiate with their clients thus ensuring a smooth and effective increase to the security officer eventually benefitting the trade and the customer alike.

The author is Fellow of the Industrial Security Foundation (Inc. )

Ex President of the ISF