Colombo Telegraph

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


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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