13 December, 2019

Blog

SriLankan Airlines EPF/ETF Bungle: Government Summoned To ‘Show Cause’ Before ILO Governing Body In Geneva

The government of Sri Lanka has been summoned by the International Labour Organization to provide show cause and explain reasons for the non-compliance and execution of a valid statutory order made by the Ministry of Labour regarding the payment of mandatory retirement benefit fund contributions by the SriLankan Airlines to its Flight Attendants Union, at the upcoming convention in Geneva, scheduled to be held between the 25th October and 8th November 2018.

The Ministry of Labour of Sri Lanka had earlier on the 16th December 2017 made a landmark decision ruling in favour of the Flight Attendants Union of SriLankan Airlines, when they filed a complaint against its employer for the violation made by the airline against the country’s EPF Act.

However with SriLankan Airlines not adhering to the Commissioner General of the Ministry of Labour’s ruling, the Flight Attendants Union sought further relief by sending their complaint initially to the Ministry of Labour on the 10th January 2018.

The letter of complaint was sent after inquiries were made by the FAU pertaining to the non-compliance of the valid statutory order provided on the 16th of December 2017. The then (ACL) Colombo South Ms. Iresha Udayangani Gamage informed the FAU representative that the Commissioner General of the Ministry of Labour R.P.A. Wimalaweera had instructed her office not to proceed with the matter despite the ruling being made.

However on the 15th and 16th of March 2018 the FAU received two letters from the Ministry of Labour to attend a meeting on the 21st of March 2018 with the Commissioner General R.P.A.Wimalaweera based on the statutory ruling made by the Ministry of Labour of Sri Lanka on the 16th of December 2017.

Strangely the first letter dated 15th March 2018 with reference number IR/COM/05/2018/55 was signed by K.D. Manoj Priyantha of Commissioner Industrial Relations and the letter dated 16th March 2018 bearing reference CS/COA/D/2/349/17 was signed by Ms.P.W.M.Gamage the Assistant Commissioner General.

Prior to attending the requested meeting the FAU wrote to the Assistant Commissioner Ms.P.W.M.Gamage on the 19th March 2018, with copies to the Minister of Labour, Secretary to the Ministry and the Commissioner General of Labour (CGL), stating that it is very clear the Department of Labour has failed to implement its 16.12.2017 order and if the said 21.03.2018 meeting is used as an attempt to procrastinate and/or reopen a further inquiry when an official and evidence based final order has been made, the union will be compelled to deem the said meeting as material evidence for all intents and purposes of the law, as a conscious attempt by the Department of Labour to willfully avoid enforcing the law.

Whilst attending the meeting on the 21st March 2018, the FAU demanded to know as to why two separate letters were sent bearing two separate reference numbers.

The Commissioner General Wimalaweera tendered an apology stating that it was an error on the part of the Ministry of Labour.

Thereafter the Commissioner facilitated a discussion stating that he wishes to review the statutory ruling that was given on the 16th of December 2017.

The FAU made it extremely clear to the Commissioner General Wimalaweera and queried if he could inform them as to how he could draw such a conclusion without going into any formal evidence or submissions from both parties.

Being unable to provide an answer the Commissioner General Wimalaweera then immediately called off the meeting and directed the parties to leave the premises.

However the Commissioner General of Labour has at the end of the meeting directed his officials to implement the 16.12.2017 order.

The audio recording of this directive is now in the possession of the International Labour Organisation.

The Commissioner General R.P.A Wimalaweera thereafter submitted a letter to the Attorney General seeking his opinion.

Several legal sources when conducted claimed that once such a final statutory order is made and dispatched to parties under registered cover, setting out specific dates for compliance; the law does not provide provisions for the Attorney General to reverse such statutory directives.

Strangely, a reputed former Commissioner and another Assistant Commissioner of the EPF division of the Department of Labour and the Employees Trust Fund on three different previous occasions have officially held in writing that the allowance concerned is statutorily liable for EPF deductions.

Thereafter with no further progress being made, the FAU then filed a 30 page formal complaint before the International Labour Organization (ILO) under Article 24 Representation procedures of its Constitution on the 10th of August 2018. The FAU also cited the letter sent by the Commissioner General Wimalaweera to the Attorney General’s Department.

Their complaint stated that the Commissioner General Wimalaweera had surreptitiously and unscrupulously suppressed certain facts to mislead the Attorney General when seeking his opinion.

Colombo Telegraph has a copy of the complaint made by the FAU to the ILO and Commissioner General Wimalaweera’s letter to the Attorney General in its possession.

The FAU has now officially raised the willful suppression and misrepresentation of facts by the Commissioner General of Labour with President Maithripala Sirisena.

The stance of President Sirisena on the conduct of the Commissioner General will now become a key determining factor before the international inquiry and an acid test on his commitment to principles of good governance.

The complaint also deals with a willful failure by the Department of Labour of Sri Lanka to enforce a valid statutory order for the payment of mandatory retirement benefit fund (Employees Provident Fund) contributions of the employer (SriLankan Airlines).

A Legal source conversant on the matter contacted by Colombo Telegraph stated the following:

“It is now officially confirmed that the Article 24 case is listed to be taken up at the 334th Session of the ILO Governing Body in October-November 2018. ILO officials are submitting a report to the governing body on the receivability of the case and the SL govt. has been asked to show cause and explain matters before it in Oct-Nov. This is the first time SL is going through an Art.24 procedure.

Once receivability is cleared a tripartite committee of the governing body will be appointed to examine the case. Then it will become a full blown international inquiry and proceedings & findings of which will become material before the US and EU GSP monitoring and review mechanisms. This can certainly jeopardize our tariff free exports to the US and EU markets. All due to the blunder of the Commissioner General of Labour. If exports are hurt it will further send the ailing Rupee down the precipice.

These are highly technical procedures of the ILO that involve a fair amount of expertise and experience to handle. It appears that local labour officials neither know how to handle this nor what’s in store. Now there’s not much space left to play around. It’s just a matter of time when the onslaught begins.

In 2010 the US trade department conducted a US GSP inquiry against Sri Lanka and it was settled on the condition that provisions contained in ILO Convention No.81 Labour Inspection will be addressed and complied with. Around 5 million USD were provided by the US Department of Labour for this purpose to the government directly and through the Colombo office of the ILO to fix the problem. Funds were sent down the drain and now the problem has resurfaced again in a big way.

The call is now with the President. Whether to safeguard the Commissioner General of Labour who willfully suppressed facts and misled the AG to serve his political masters or look at the problem from the greater interest of the nation and do what is right!”

With the ruling made by the Department of Labour on the 16th December 2017, SriLankan Airlines has been has to pay approximately over US$ 50 million to its Cabin Crew for the non-payment of EPF on overseas meal allowances since the airline’s inception since 1979.

This sum is approximately 50% of what the former CEO Suren Ratwatte paid for the cancellation of the Airbus aircraft deal recently.

SriLankan Airlines’ cabin crew in 2016 offered in writing to the management to deduct their share of EPF dues from their earnings. The failure in due diligence by the management has now resulted in the Airline having to contribute the workers share as well and pay up a statutory surcharge for the wrongful default. Had the former CEO and the board of directors accepted the offer of the cabin crew the ballooning statutory liability could have been mitigated and brought under control. (By Janaka Ranaweera)

Print Friendly, PDF & Email

Latest comments

  • 7
    0

    When the nuts go bad all hell breaks loose – Mr. President now where is your zeal when RULE OF LAW is sent down the drain and the EPF Act unscrupulously defied with you tacit blessings?

  • 5
    18

    This is a crazy ruling.

    These waiters and waitresses are reimbursed their meals expenses when they are overseas. Why should EPF be paid on an actual reimbursement? They are not fixed allowances.

    Already these waiters and waitresses are on Rs 500,000 per month with all kinds of allowances and time to close down the bloody airline which is bleeding the country and the economy.

    • 6
      3

      Nimal Perera,
      You are correct.
      We do not need an airline loosing millions daily when citizens are starving.
      This rot commenced long ago when Emirates were removed from management by MR.

    • 9
      6

      Mr Nimal Perera

      Next time when you sitting inside a big iron bird high up in the air hope like hell there wont be a emergency because if that happens while you shi##ng number I & 2 in your underpants and front of your trousers and shaking make sure you “listen very carefully” to those people who you petulantly called waiters and waitresses if you want to get down in one piece smelly with full of C##P.

      • 5
        3

        Mr Lenonard,
        The birds are made of aluminium for your information. Also, the waiters and waitresses will be the first to start s***ting. They are definitely overpaid. Firemen are more skilled but they don’t get a quarter what these guys get.This airline is costing each of us 10,000 bucks a year.

        • 4
          4

          Mr Puk Jayantha
          Thank you for your engineering and metallurgy .information.
          Every time I get on a aluminum plane I rely on the crew from captain down to the ground staff to get me safely to the destination.
          Without diminishing fire fighters they do heroic and important service but they have choice to enter or not to enter a building for rescue so are the life savers.If you are up in the air crew dont have choice to open the door and walk out.
          I dont wont to split hairs with you but if you want to be a expert in aircraft.
          FYI you missed to mention Steel Titanium and composite material then again I’m not expert like you.

          • 4
            4

            Of course you seem such an expert in English too. :
            “I dont wont to split hairs with you but if you want to be a expert in aircraft.”
            Must have been a great advantage at the interview, eh? No need to explain how Sri Lankan got into this mess.

            • 2
              5

              Mr P. U. K. Jayantha
              My comment directed at the way crew was denigrated your problem seems to be envy of what the crew is getting paid. If the crew is getting paid too much and affecting the financial viability your brickbats should be directed at the management.
              FYI
              I left Sri Lanka in early seventies so I apologies for not been the reason Sri Lanka is in this mess or are you suggesting the rationale is it because I left the country?. Oh no!
              By the way I don’t have any affiliation with SA or airline industries what so ever other than been a fare paying passenger. My family and I have used Sri Lankan national carrier as a expat from early days of( DC10 ). In fact my wife and I will be flying with SA coming month to visit friend’s family as a fare paying passenger.
              Working as a cabin crew member is not all peaches and cream and mega salaries it has its draw backs working unsociable hours not been able to get a decent sleep putting up with drunk obnoxious passengers.
              Just imagine passenger likes of your hostility and envy to the cabin crew been in a confined space in a plane for ten hour flight.
              Surely they should be paid lots more.
              So “Don’t knock it till you’ve tried it”

              • 5
                2

                Lenonard,
                Whether you are a cabin crew member or not, you ought to find more logical arguments than: “it has its draw backs working unsociable hours not been able to get a decent sleep putting up with drunk obnoxious passengers.
                Just imagine passenger likes of your hostility and envy to the cabin crew been in a confined space in a plane for ten hour flight.”
                There are many trades that undergo similar conditions (such as supermarket employees working 16 hours ,standing all the time, Last I heard they weren’t being paid 500,000 bucks.
                The cabin crew wages contribute more to losses than management wages, because there are more of them.
                You may be very proud to fly SLA every year, but please remember that EVERY SL citizen (which it seems you are not) , not only those in your plane, are paying 10,000 Rupees EACH for your pleasure.
                Keeping an airline going just for national pride is as kunatic as it can get,

                • 3
                  4

                  P U K Jayantha
                  Question? You seems to jump to conclusions again how do you know that I’m not a Sri Lankan citizen?
                  And bit of back ground info:
                  FYI
                  I been employed in a industry that that operates 24/7 day and night. The safety rating and standards by law of the land are equivalent to the same specification as of a nuclear plant because of the volatile chemical’s and LPG and machinery work hours are 6.00 to 18.00 & 18 to 6.00 rotating shifts changing every two days from day to night. Employed in the same company going on 33 years last 26 years on shift. I know this may be news to you.
                  Its my choice and decision to work. I do this because I get paid good money if not I will leave that will be my choice as well.
                  If I were to jump in to conclusion as you see fit can I assume you are one of the so called supermarket employees working sixteen hours standing all the time without A tea or launch brake for Rs. 10.000. Would you be happy cabin crew to be paid the same or less.
                  By the way its a choice don’t try to paly the victim.
                  Been proud got nothing to do with my choice of airline its the service plus cost & benefit drives my choice in the market. If really want to fly to Sri Lanka cheep I can get a cut price ticket from Malaysian or South China Air lines.
                  I feel like perennial bluagr now flying SA to rip off hard working supermarket workers of $50 each time If and when I t fly SA. If I were to do this 15 times continuously things stayed the same I will be able to get a free ticket providing price stayed the same. This could be the deal of the century 6.5 % saving over 15 trips. This all for out lay of poultry $12000.

                  • 4
                    3

                    Leonard,
                    “If I were to jump in to conclusion as you see fit can I assume you are one of the so called supermarket employees working sixteen hours standing all the time without A tea or launch brake for Rs. 10.000. “
                    You are free to jump to any conclusion you like, but I marvel at your amazing English after being “Employed in the same company going on 33 years last 26 years on shift.” in USA no less. A launch brake? What the hell is that? Come off it, old man, you are a frog pretending to be a prince, and not a very smart frog at that. If I were you, I would keep quiet about your marvellous qualifications.
                    All I am saying is that I and most citizens of this country are NOT willing to keep paying 10,000 bucks a year each to keep a loss-making airline flying . Is that so difficult to understand?

                    • 2
                      4

                      PUK Jayantha
                      I pledge to spend $50 while in Sri Lanka as a payback. Hell I’ll up that to $ 100.
                      Advantage been old is I don’t have to pretend to impress if the life goin to be been kind you may get to old age. As for now I can make a pretty informed guess by reading your comments that you are what we oldies called angry Snow flake Millennial.
                      FYI
                      What you’re supposed to do when you don’t like a thing is change it. If you can’t change it, change the way you think about it. Don’t complain
                      Maya Angelou
                      And for you this quote.
                      “You are not special. You are not a unique snowflake. You are the same organic and decaying matter as everyone else.”
                      By the way I live in the southern hemisphere.This is my final comment. I got a trip coming up shortly flying Sri Lankan Airlines.

                    • 4
                      2

                      Leonard,
                      Your spending $50 is not going to take the burden off 26 million real citizens.
                      I do hope your launch brake works when you land here from Oz.

                    • 1
                      0

                      PUK,
                      I do believe you are wasting your time. Your friend Leonard seems too thick to understand the compliments on his “superb” English.

  • 9
    1

    Those who gave the wrong legal advise to the airline and encouraged the airline to defended it fraudulently should be summoned to COPE. The FPF default should be recovered from these schemers and from the former CEO and board members who let the issue balloon out of proportion!

  • 20
    1

    Nimali Son – Just because you are not flying or can not affford to fly or due to your immaturity you can’t fly or whatever the reason don’t call Cabin Crew – using terms waiters and waitresses. They do a job that is governed by the Civil Aviation Authority of Sri Lanka, European Aviation Safety Agency and finally last but not least International Civil Aviation Authority. So your so called wife style waitress job is a no more definition for them. Respect each and every job. The country’s failure to do something to this airlines should not be taken personally by you. Instead work hard and earn more OT migrate from this country rather than being a father of sarcasm to you and your family.

    • 6
      2

      Rabbada Ayya
      Couldn’t have agreed with you more.

  • 1
    0

    There doesn’t seem toa single aspect of the Yahapaalanaya a governance which is not in a pathetic MESS despite all that jazz about the mastery of CHESS possessed by the Yahapaalans?

  • 2
    0

    Quote –>The stance of President Sirisena on the conduct of the Commissioner General will now become a key determining factor before the international inquiry and “an acid test on his commitment to principles of good governance”…..unquote – .seems the devil is in the detail, the matter is blown out of proportion, looks like RW and his cohorts are cooking something to fix My3. Since 1979, after almost 4 decades did ILO suddenly wake up from a deep slumber to call for an inquiry. Why there is no IMF/WB affiliated UN watchdog to apprehend and punish those robbing EPF/ETF & a nation’s Central Bank lock stock & barrel? the irony of the situation is, these criminals still fool the masses of an imaginary economic outlook in 2025, while the country’s Rupee value keeps falling by the day – and unfortunately though majority of the people still believe these scoundrels.

  • 1
    0

    It is very interesting note how some commentators speak high of Emirate Management period of this airline while crying loud to close it down for not performing well and has become, in fact, a burden on the country and the tax payer. We have seen one “Product” baring fruits, while in the hands of a “Skillful Managers” and yet the same “Product” being made a “Burden” while in the hands of “Unskilled; Incompetent Managers”. So where does the WRONG lays? Is it the “Product” or the “Management”? It would certainly be the “Management”. International Airline Transportation is GOOD BUSINESS and so many countries who are engaged in that “Business” have proven it to be a Very Successful Business Venture , as well as a “National Pride” respective to those countries. So why not address the problems and the issues and make MAXIMUM benefits by making USE of the Product instead of “Destroying” it? Please go through what is being UNEARTHED by the presently sitting Presidential Commission, relating to the management of this airline, after it was taken over from Emirates This President must seriously consider introducing the “Capital Punishment” or more favorably use the “Madu Valigaya” in public , on each and every one “Responsible” and “Accountable” for the collapse of this “Business Venture”. of this country. So instead of demanding the destruction of the “Product”, please demand that “Product” be put to good use; but CRY to bring all the “Crooks” to book and send them behind bars for life. They NEED to live there ONLY.

  • 1
    0

    All is well. Panic over for a few more months.
    Public Enterprises Development Minister Lakshman Kiriella announced yesterday, “The government decided to create a Special Purpose Vehicle (SPV) under Treasury to absorb the total liabilities of SriLankan Airlines after writing them off its balance sheets”.
    Earlier, the Cabinet had granted approval for the government to absorb the total liabilities of the national career amounting to Rs.461 billion.
    The SPV will cost EVERY Sri Lankan Rs 22,000/- This will be a good chunk of the annual household earning. Never mind. We will forgo few meals every week. How else can our Ministers accompanied by several advisers travel overseas? By the way how many schools can built for Rs 461 Billions?
    Someone please tell us: Why is the meal allowance paid to Cabin Crew considered earning?

    • 2
      0

      See Section 47 of the EPF Act.

      It applies to everyone. Not just the Cabin Crew.

      Why should the law be different only to the Cabin Crew?

  • 4
    0

    The mindset now is to bring all the emirates time do gooders who sold the family silver and showed a cash flow and profit. These are new ceo, new cto, pretty soon aas licking captain will get a promotion by lying to chairman and using his RW links. Sadly all these will ruin the airline. Poor staff will be void of EPF etc

  • 0
    0

    With our experience on the type of governance of President and Prime minister it is unlikely that they will act according to rule of law. As in the case of defence personnel, the vested interests of Labour commissioner will take precedence over the employees’
    rights. We have seen this in the affairs of the entire SL. Air Lines under previous regime and the present is no better. “What cannot be cured must be endured”. The irony is that this dictum does not apply to the politicians and their cohort.

  • 7
    3

    Mr. Perera you display the classic symptom of suffering from a case of extreme ignorance and jealousy. So let me educate you. You do not seem to understand what the job of a cabin crew member entails. Their primary function on the aircraft is to ensure the safety of all the passengers on the aircraft. They go through rigorous training in saftey and first aid to be qualified to act in case of an emergency to save the lives of the passengers on the aircraft and in case of a medical emergency to be able to administer first aid until medical help can be sort. In case you had the privilage of flying and there was an emergency, Who do you think is going to risk their lives and get you and the rest of the passengers out of the aircraft within 90 seconds, so you and the rest of the passengers can go back home safely to your loved ones. They leave their loved ones at home most times missing birthday’s and special occasions of their loved ones, missing spending festive seasons with their loved ones so that the passengers that fly with them are able to make it home safely to be with their loved to celebrate with their loved ones these occasions. They fly through the night, suffering the jet lag and time changes to do their job and the stress they go through only they know and suffer in silence. Cabin crew members are professionals that sacrifice a lot in doing their job so appreciate them. As for the airline making losses is due to bad management and not their fault. Blame those in power and in management

    • 5
      4

      Mr.Parry,
      You say “They go through rigorous training in saftey and first aid to be qualified to act in case of an emergency to save the lives of the passengers “
      Firemen get even more training and actually fight fires risking their lives quite often. Why should cabin crew get 500,000 for looking pretty (they haven’t faced a real emergency in the whole history of the airline) when the firemen don’t?
      Find a better argument please.

      • 2
        4

        PUK
        If this is your best argument?Well in that case this can be put in the category of puke that dribble out of ones mouth when incoherent arguments are the only way to keep going.

    • 2
      2

      MR. Parry
      Did you read my comment or are you struggling with short attention span. All my comments was written in support of Airline cabin crew.
      Try reading it again bit slower.
      Snippet of my reply to PUK
      Working as a cabin crew member is not all peaches and cream and mega salaries it has its draw backs working unsociable hours not been able to get a decent sleep putting up with drunk obnoxious passengers. Hello dose this ring a bell?

    • 2
      1

      Mr. Perry
      I unreservedly apologies for placing a reply under your comment that was to be placed on someone else’s comment..
      For what its worth I totally agree with your thoughtful comment.

      • 3
        2

        Why is it that these 3 gents Parry, Leonard , and Rabbada Aiya sound so uncannily similar? All gone to the same elocution and spelling class?

  • 0
    0

    Srilankan Airlines is like our cricket team. Every attempt they make in flying, in return end up landing with a thud. More than 10 times Asian champions and World champions too, has prematurely returned home even before the real games are about to begin.The athletes returned home EMPTY handed after the recent games in Indonesia. Now just like the politicians the majority citizens are busy in finger pointing and blaming the other. Job well done.

  • 0
    0

    Can some one provide answers to the following;
    1. Crew are paid meal allowances besides meals during flights. According to the
    ruling, the allowance is EPF liable. Does that apply to hotel staff and staff of
    companies provided with company meals?
    2. For the future, will the airline consider providing crew with set menu meals at
    layover hotels ?
    3. Does crew pay PAYE on overnight and meal allowances?

    • 1
      1

      Raj,
      I believe legally the govt is liable to pay. But in the end we citizens will have to fork out EPF on their inflated salaries. These guys make far too much already, but are using a legal loophole to screw the public even further.

      • 2
        0

        Its those drawing fat salaries and employment law advising organisations that landed the airline in this mess. Let’s hold these incompetent HR lowbrows and organisations pay for this mega blunder. They have failed in their assignments after being paid by the public! You cant let these guys go scot free. Who is advising Sri Lankan on employment law?

        Every hotel and other place that provide meal allowance is liable for EPF and they do pay.

        The airline should switch in to a proper employment law service provider and sue the ones that have landed them in the mess.

    • 1
      0

      The PAYE tax on the meal allowance ought to be deducted by the management at the time of paying wages. If the employer has failed to do that, then the management has to pay the workers share together with the surcharge to the Inland Revenue Department. That is what the law says.

      Who are these lowbrow lawyers advising the airline on employment matters…?

      Report these lawyers to COPE/BASL/Supreme Court and sue them for professional negligence for causing the airline a massive financial burden due to their wrong advice.

  • 1
    0

    Can anyone please reveal the name of the lawyer or law firm that gave this wrong EPF advise to Sri Lankan Airline?

    So that we can avoid these crooks the next time.

Leave A Comment

Comments should not exceed 300 words. Embedding external links and writing in capital letters are discouraged. Commenting is automatically shut off on articles after 10 days and approval may take up to 24 hours. Please read our Comments Policy for further details. Your email address will not be published.