26 September, 2018

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SriLankan Airlines: Flight Attendants To Get Billions In EPF Back Payments Since 1979

The Labour Commissioner has ruled that all SriLankan Airlines Flight Attendants who traveled overseas whilst on duty ever since the airline was established in 1979, must be paid EPF contributions for all meal allowances received apart from their paid basic salaries.

Last week the Department of Labour wrote to the SriLankan Airlines management asking them to provide all individual details such as names, EPF numbers and paid meal allowances of all affected employees within 14 days of their dated letter.

SriLankan Airlines since its inception in 1979 had maintained a practice of paying Flight Attendants over 80 % of their wages in the form of overseas meal allowances in foreign currencies, despite maintaining low basic salary structures. Whilst the paid overseas foreign meal allowances were not taxed, no EPF contributions were paid by the airline for such allowances.

This improper practice was highlighted by the former Fight Attendant Union President Adrian Cramer in January 2016.

As no action was taken by the current Yahapalanaya led airline management headed by Prime Minister Ranil Wickremesinghe’s appointed Chairman Ajith Dias, CEO Suren Ratwatte and the Board of Directors to rectify this issue, FAU President Cramer then went on to file a case with the Department of Labour.

During the time of filing his case FAU President Cramer established the sum to have been in the range of approximately Rs 4 billion that was due as back payments.

However now it is learnt to be in the range of Rs 6 billion.

Despite having to pay a colossal sum in back payments, the national carrier also stands to have a hefty fine imposed by the Department of Labour for this gross violation.

Those affected by the nonpayment of these EPF at present are only the Flight Attendants who have filed this particular case.

However on the basis of this particular Department of Labour ruling, all other employees of the airline could file their own individual cases to seek relief for their unpaid EPF/ETF dues, a reliable source told Colombo Telegraph.

The re-igniting of this reported violation was first published by Colombo Telegraph in an article titled “SriLankan Airlines’ Fraud Confirmed – Union President Adrian Cramer” on the 26th February 2016. In it the then President FAU Cramer quoted the violations as per the section 47 of the EPF Act and Section 44 of ETF Act, under the title “Earnings”.

The two sections as quoted by Flight Purser Cramer read as follows”

Employees’ Provident Fund Act – incorporating Amendments up to 31st December 1998

47. In this Act, unless the context otherwise requires – “earnings” mean (a) wages, salary or fees; (b) cost of living allowance, special living allowance and other similar allowances; (c) payment in respect of holidays; (d) the cash value of any cooked or uncooked food provided by the employer to employees in prescribed employments and any such commodity used in the preparation or composition of any food as is so provided, such value being assessed by the employer subject to an appeal to the Commissioner whose decision on such appeal shall be final; (e) meal allowances; and (f) such other forms of remuneration as may be prescribed; “employee” means any person who has entered into or works under a contract with an employer in any capacity, whether the contract is expressed or implied, or oral or in writing and whether it is a contract of service or of apprenticeship or a contract personally to execute any work of labour, and includes any person ordinarily employed under any such contract, whether such person is or is not in employment at any particular time; “employer” means any person who employs or on whose behalf any other person employs any workman and includes a body of employers (whether such body is a firm, company, corporation or trade union), and any person who on behalf of any other person employs any workman, and includes the legal heir, successor in law, executor or administrator and liquidator of a company; and in the case of an incorporated body, the President or the Secretary of such body, and in the case of a partnership, the Managing Partner or Manager; “Monetary Board” means the Monetary Board established under the Monetary Law Act; “prescribed” means prescribed by regulation; and “regulation” means a regulation made under this Act.

Section 44 of the Employee Trust Fund states as follows:

Employees’ Trust Fund Act (No. 46 of 1980) – Sect 44

Interpretation

44.In this Act, unless the context otherwise requires ” earnings” shall have the same meaning as in the Employees” Provident Fund Act, No. 15 of 1958 ; “employee” includes any apprentice or learner who is paid a remuneration ; “employer” means any person who employs, or on whose behalf any other person employs, any workman and includes a body of employers (whether such body is a firm, company, corporation or trade union) and any person, who on behalf of any other person, employs any workman, and includes the legal heir, successor in law. executor or administrator and liquidator of a company and in the case of an unincorporated body, the President or the Secretary of such body, and in the case of a partnership, the managing partner or manager ; ” prescribed” means prescribed by regulation ; ” private sector undertaking” means any undertaking carried on by an employer in the private sector and includes any undertaking carried on by a self-employed person ; ” public corporation” means any corporation, board or other body, which was or is established under any written law, other than the Companies Ordinance,. with funds or capital wholly or partly provided by the Government by way of grant, loan or otherwise; ” registered medical practitioner” means a medical practitioner registered under the Medical Ordinance or an ayurvedic practitioner registered under the Ayurvedic Act, No, 31 of 1961; and ” State undertaking ” means any public corporation or any business undertaking vested in the Government under any written law, or any branch or section of such corporation or business undertaking.

A member of the current Flight Attendants Union speaking to Colombo Telephone on condition of anonymity as he is not permitted to provide official statements said “This has been bad management practice that was implemented and carried out over the years. The tendency to pay nearly 80% of our wages in the form of allowances whilst maintaining low basic salaries had been practiced by the airline to avoid paying taxes. Now after 38 years this has come back to bite them really bad. At present even all our allowances paid for round trips where we depart Colombo and arrive the same day is paid in a separate salary slip simply to avoid paying such taxes. Long serving staff members stand to be paid approximately Rs 10 million each. I believe those ex-employees who also served the airline for 25 to 30 years before retirement are also eligible to receive their rightful dues. Whilst cheating the state and employees of their dues, Chairman Dias made a galling proposal to make a payment of Rs 10 million to CEO Ratwatte as a performance bonus. Only time will tell whether Prime Minister Ranil Wickremesighe will save his buddies Chairman Dias, CEO Ratwatte and the Board of Directors he appointed from having their assets frozen, which is provided for in the EPF /ETF Act. ”

However soon after filing his case FAU President Adrian Cramer’s Secretary Lanka Kamalgoda and Vice Presidents Elseworth Weerasinghe and Dion Jansz convinced him to withdraw the case. This was after Chairman Dias promised the FAU that the management would re-instate certain flight layovers that had been taken away from the Flight Attendants. Soon after FAU President Cramer withdrew the case Chairman Dias went against his word.

Meanwhile Colombo Telegraph investigating this fraud can further reveal that over the years, multiple Executive Committees of the Flight Attendants Union have used these non-payments of EPF/ETF as a bargaining chip to strike deals with the management of the national carrier.

For instance Primal De Silva the current General Manager of the airline’s Aviation Academy used it to negotiate a deal and seek a promotion for himself. Despite not conducting a single training programme in his career, he was promoted to the post of Manager Safety Training, after he along with his union membership successfully grounded the entire fleet of the airline in a union strike.

Later on in December 2014 when signing of the ‘Collective Bargaining Agreement’, the then President of the FAU Sidath Dedigama struck a further deal with the management to ensure that a payment of Rs 50 million was paid and distributed equally amongst all Cabin Crew. The membership benefited by receiving Rs 49,900 each.

Subsequently Flight Purser Dinesh Fernando who took over from Cramer as FAU President in 2016, thereafter re-filed the claim.

With election and appointment of the current Executive Committee, the present Secretary Jenaly Jansz set in motion what President Dinesh Fernando had re-filed in 2016. This has now resulted in the Department of Labour coming to such conclusion.

However with a history of deals being struck by the management of the airline and the FAU, the rest of the membership are once again concerned if the current President and Secretary will have their arms twisted by the management into helping them nullify this ruling provided by the Department of Labour.

Despite trying to take the management of the airline head on, President Abeywickrema and Secretary Jasnz have also exposed their own vulnerability of retaining employment in the airline. This is as President Abeywickrema had his underage son recruited to the post of Flight Attendant with the blessings of HHR Pradeepa Kekulawela and with Secretary Jenaly Jansz being the accused in a hit and run accident resulting in the death of a homeless man whilst not being licensed to drive. (By Jacqueline Senanayake)

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Latest comments

  • 11
    1

    It is good for people who worked day and nights .
    Consider this may apply for many other department .
    I too need to claim back my one for 10 years and I have not done it .

    • 10
      3

      LOL teaches Yahapalanaya robbers a lesson. RK will now have to sell his penthouse palace to make up for the goverment losses. All moneys in the country belong to the nation/crown, each person can only keep them as passing tender.

  • 14
    15

    I have flown with several airlines, including some top airlines. Recently, I flew with Sri Lankan airlines for the first time and while flying I decided it would be the last time too. One of my worst airlines experiences. Those Sri Lankan people who boost about and are too proud of their hospitality should see the world not being too proud rather than boosting about yourself or else live as frogs in the well.

    • 16
      2

      @People, yours is an opinion based on your experience. I live in Canada and our national airline ‘Air Canada – AC’ is a national disgrace. I was in Sri Lanka this year and the first leg was flown by AC and the 2nd leg was flown by Sri Lankan – SL. AC was a disaster, service was not just poor, it was absolutely disgraceful, the seats felt like bus seats, then I hopped onto SL, it was heaven. What a relief. Service was 5 star and the seats were fantastic. So it is not that we Sri Lankans are blowing our horns, people have different experiences. Anyone I speak to in Canada about AC economy seats share the same opinion. So you are entitled to your opinion but don’t make it a standard opinion for all!!! Absolutely SL overall is a classy airline but monkeys in the ground administration have ruined it. The crew was amazing.

      • 4
        8

        Another too proud lankan beating the drums about his/her own burnt out tail. You are blaming the Air Canada seats? The seats in my return Sri Lankan flight is worst than bus seats. The seats were not stable, and I almost asked the crews why it is like that. You can’t even sit and move your body, the seats made huge noise–which definitely disturb the neighbouring fellow passengers. The flight crews also didn’t know how to manage the passengers boarding the plane (they completely seemed not trained). But, the problem with most of the Sri Lankans is that you people don’t like criticism for improvement.

        • 9
          1

          @People, have you ever flown Air Canada? I have flown Air Canada, Sri Lankan, American Airlines, Thomas Cook, West Jet, Qantas, Malaysian, British Airways, etc. The worst was Air Canada. They crew was nasty, the seats were horrible, food was tasteless. The only good thing about AC, it will land for sure. Out of the above listed ones, Qantas was the best. Yes, I agree maybe the plane you flew may have had numerous issues, but what I am saying is do not make it a standard comment for all. I can understand AC gives you crap for a short haul, but giving garbage on a long haul is unacceptable. The friends who took me to the airport told me, if you are flying AC (B787 dream liner), you better get up and walk. If you don’t you are going to have problems when you land. We were packed in there like sardines. I will never ever fly AC on a long haul ever again. The beautiful stewardesses on SL, made my day with their lovely smile and politeness. When you talk to AC stewardesses, it felt like I was dealing with nuns from the Catholic church. They were too busy thinking about retirement.

        • 0
          0

          @ People, I feel no good about your credibility. I have traveled using most of the regional airlines SQ, MH, UL , TG and UL was fairly good always. I don’t think you have used UL for your travelling.

  • 8
    1

    All politicians of all parties robbed the airline. The crooks are continuing to float it only to change the structural mode into five or six version and at many various time period different, different politicians to rob. They feed the Modayas with the opium of “Proud National Carrier”. Lankawe, at this time, if has any proudness it is all falling on Russian, Chinese, American, Indian, EU, South American, Australian, Pakistani, Middle East Countries’ leaders feet to have UN SG Expert Panel Report suppressed and their war crime accusation withdrawn. New King is practicing shameless begging. UNP is implementing shameless impunity.
    Foolishness of the Sinhala elites is they cannot accept the command of an experienced Foreign Manager. But they are waiting only to bring another Emil Mahendran as last resort hide their corruptions of the past, appoint on him/her commissions to inquire for a decade, pay for the uneducated Wimals to sit on the commission for payments, funnel some communal feeling over it and use it also for LG and other election voting, then closed down the Airline.
    If the EPF fund is robbed out, this should not be used as new source to refund it. But whether they worked or not, the only real workers of that airline are the flight attendants. So pay their due under the established law. Close down the airline. Let the carcass eating hyenas who have surrounded the airline to go search another source to suck (, because closing down this airline will not save the country as they will invent another to suck; if no will sell a piece to China or Poison the people to pay to Russia.)

    • 5
      0

      It is good that the EPF was not paid earlier. If it was contributed earlier,that too would have been ended up in the Bond Scam. It is hoped that arrears of EPF will be paid and benefit the flight attendants. Even if they are out of Job this arrears will mitigate their sufferings.

    • 8
      2

      Sri Lankan Airlines used to run profitably when it was managed by Emirates until Mahinda Rajapakse started using as his own plane. He used to unload advanced booked passengers just to make sure he and his entourage of his families and corrupted political friends are given a free flight at the expense of ordinary masses. International flights are highly competitive and usual SLAL passengers walked with their feet to other airlines to make sure they are allowed to fly as scheduled.
      Rajapakse and hi family must be made to pay the billions of mossed incurred solely due to his authoritative attitude towards commercial enterprises. His family can pay off those losses with billions hoarded in Dubai and in other islands that they bought with looted money and commissions got illegally from contractors building of road and express ways.

      • 0
        1

        Saro,

        “Sri Lankan Airlines….used to run profitably …when it was managed by Emirates until Mahinda Rajapaksa started using his as his own plane.”…. instead of managing it as the country’s plane.

        Sri Lanka, the Land of Native Veddah Aethho, occupied by the Paras ( Sinhala, Tamil, Muslims etc)…..ran generally better with protection for all its Para- inhabitants ..when it was managed by the British until Para-Sinhala and later Para-Tamils started using it as their own Para-country,

        The mean IQ of the Paras is 79.

  • 11
    0

    I guess the Inland revenue department will be immediately collecting taxes and penalties on the allowances that were paid to the staff, and not declared? After all its the duty of the person receiving the funds to declare and pay the taxes isnt it?

    • 5
      0

      Yes, the GOSL will collect taxes with arrears!

  • 8
    0

    Why is the EPF thingy raised at this point in time? Why not in 1979?
    We, the silent majority of Lankans can clearly see that Lankan politics revolves around “The group that holds the rein of power owns the treasury”.
    The language/religion-divide is a clever device to distract. Unfortunately it still works!

    • 8
      1

      Watching the way the previous and this government worked/s is an eye opener. The way they (the buggers running these governments and local joints) have been scamming their own people over the last 8-years, I can completely understand the complaints of the minority ethnic groups. What destructive and unjust practices the Presidents, PMs and Ministers have done to Sinhala people, I am sure they have done multifold to the minorities. Nothing to do with religion; their actions were outside the boundaries of Buddhism, Christianity, Hindu or Islam faiths. Just mere cussedness and personal greed, PD.

  • 1
    3

    I do not whether this article is true, because, I heard, the estimated worth of the EPF is Rs 30,000 billions. but only Rs 2000 billions are left. At least one, or the only top ranker, he is probably an accountant of the use car sales lot had escaped from the airport. govt is silent did not hold passports of anyone.
    On the other hand pilot guild is asking when we are killing ourselves to make the air line profitable, is it wrong to ask the management who make millions.

  • 0
    2

    I herd this story is true. How ever once they were appointed, freezing accounts bank money etc, came. So, Ranil had asked them to stay as Maangement and delay it or something like that.

    • 2
      3

      Ado Jimba Shitty, one thing we are all sure of is that you are a completely an uneducated buffoon who lacks even the basic language skills. You cannot even spell words in English. You should focus on writing in Sinhala (if you can spell) and giving your comments on some rural Sinhala newspaper………that is if you have one.

  • 3
    1

    high time it was abolished like saitm

  • 5
    1

    Clearly, Sri Lankans are unable to run an airline. Shut the bloody thing down , and let the politicians and their bag carriers run around on other airlines where they will be treated like the rest of us .

    • 3
      1

      Aren’t we now about to close down the “Proud National Flag Carrier” because a foreigner showed a run around for our Royals when they want to return home from London as one single family? Hopefully, when they travel on the other AirLines, won’t show any more bombs and hi-Jack it or (,in dope) kick on the exit door for not opening to pee.

  • 0
    0

    Has the Department of Labour been asleep since 1979. They must enter these large entities at least once a year to ensure such practices do not take place. They need to be punished too as amounts due under the Emirates management will also be recovered now which, the government and in effect, the people have to pay. The Inland Revenue too must be brought in to impose back taxes and penalties on the flight crews as they have received these payments and should not be granted loop holes because it was paid in dollars. After all if EPF AND ETF applies, then logically, tax does too.

  • 0
    0

    I note that there are many Burghers working in SL Airlines which is good as it shows that opportunities are not denied to minority communities. I am not a Burgher but it is good to see that there is some representation of minority communities in employment in the National Airline. It is even better to see them recognised for their abilities by their fellow workers.

  • 0
    0

    The Airline is being bled to death by the present Board who are plundering its coffers to the extent that they are refusing to state how much they are paid, what their perks are, and what agreements they have with other airlines. This is close to the audacity shown by Mahendran in the Bond Scam inquiry. SLAL will fall out of the skies one of these days.
    I last flew SLAL from Singapore to Colombo in 2012 during the Rajapkses days. The Chairman of the airline was a Rajapakses relative a Seneviratne. I wrote a letter to him outlining some concerns but had not even an acknowledgment. I have not flown with them since as I believe it operates at sub standard level. A couple of in flight service issues included (a) reuse of disposable cutlery. Disposable metal cutlery cannot be machine washed properly and in my case although they came in sealed cellophane wrapping, there were obvious “live” curry stains on it. The steward when pointed out brought a new set but I felt so squeamish that I could not eat at all. The wine served was off and I thought that someone had made a packet by buying old stock. There were a few other matters I cannot recall now which I thought I should bring to the notice of the Chairman so included my boarding pass with my letter. No acknowledgment,no response. Kaata kiyandada?

  • 2
    0

    This is fine but the corollary is that the employees must pay Income Tax on the meal allowances. EPF is applicable as a percentage of earned income. Therefore if Meal Allowances are to be considered as earned income for EPF calculation then they must be taxed as earned income.

  • 0
    0

    I have flown by SL in 1981, the fare was fairly good, and to avoid the terrible Mumbai stop and custom’s trials before reaching Trivandrum. From Tennessee flight to NY, NY to Germany, Germany to Colombo, finally Colombo to Trivandrum. One old Boeing 737 was the aircraft to Trivandrum, flight was delayed to change the flat tire. The bags were missed while reached at Trivandrum. The meal serving at Colombo was such terrible service and the food was meant for the refuges like a free meal. This poor service drove away many first time passengers through SL airlines. If SL could develop that route from NY to Trivandrum, it would have been a big win for the airlines. Now, Air India is a terrible story, but the Qatar airways-Ethiad and Emirates have taken full control of the routes to India and Asian countries from the western nations.

  • 0
    0

    When I was a Minister I travelled business class fully drunk, I always had a UL flight attendant on my lap

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