29 October, 2020

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“Yahapālana” Government To Attack Labor Rights

By Sumanasiri Liyanage

Sumanasiri Liyanage

Sumanasiri Liyanage

Independent Trade Union Organization consisting 16 trade unions had a protest in front of the Colombo ILO office on October 26 against its support to the government to amend labor laws to make hiring and firing easier. I understand that in response to this protest, a seminar is planned by the Ministry of Labor to outline the planned labor market reforms. Former Supreme Court Judge, Ms Shiranee Tilakawardane is named in the agenda of the seminar as the key presenter and it shows she is the one who drafts new labor market reforms. It is a known fact that the previous government also tried to amend existing labor laws with regard to hiring and firing, wage determination and many other subjects claiming that new laws were required to face the new situation, globally as well as locally. It is also interesting to note that labor market reforms are one of the essential components of the neoliberal agenda that proposes all out marketization of the economy. To understand the real nature of the efforts to change labor relations, the reform agenda has to be situated in the global and local context. Finance Minister of the new ‘yaha palanaya’ government has emphasized recently that many sectors would be in the future opened for the private sector. Similarly, the present government seems to consider direct private investment as the main source of economic development in the country. Since, as we have witnessed, DFI and local private investment are slow to respond to government’s appeal to invest, it can be surmised that the government would ask for substantial loan from the World Bank and the International Monetary Fund to face dwindling foreign exchange reserves and to finance the fiscal deficit in 2016 budget. Private sector employers’ associations have repeatedly stressed that main obstacle for private sector investment is the existing labor laws that are, according to them, more favorable to employees. If I put it into simple language, the existing labor laws have made it difficult to fire workers when the employer needs to do so. As we all aware that Sri Lankan labor laws that were drafted and amended during the 1950s- 1970s were very much concerned over the security of the service of the employees. The famous verdict by three judges, Canekaratne, Schokman and Coomaraswamy, had reiterated this aspect of the labor regulations. (Ceylon Government Gazette –extraordinary– July 26, 1956)

DSCN2107The security of service and social contract in determination of wages and terms of work were accepted as basic norms in labor relations in many democratic countries during the period of late capitalism that adopted social democratic principles and policies. Social democratic policies promoted and was based on some kind of alliance between the state and the trade unions. It is interesting to note the following words of Franklin Roosevelt. He said: “It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By “business” I mean the whole of commerce as well as the whole of industry; by workers I mean all workers, the white collar class as well as the men in overalls; and by living wages I mean more than a bare subsistence level-I mean the wages of decent living.”

However, with the invent of neoliberalism in the late 1980s, the bourgeoisie openly expressed their desire that they should be allowed to exploit workers more and more. Hence workers should not be paid a living wage, but a wage that is equal to the product of the marginal worker. Roosevelt’s principle, “The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little” was inverted.

Washington Consensus and Labor Market Reforms

In 1990, John Williamson listed ten principles to be followed by developing countries. These principles was later called “Washington Consensus”. Although WC in its original form called for deregulation of all markets it does not specifically proposed to deregulate the labor market. However, later in augmented Washington Consensus (AWC) flexible labor markets was included as one of the key elements of neoliberal development prescriptions. It is also interesting to note that it has been proposed that these 20 principles of WC and AWC should also be adopted by developed countries as well. Hence the World Bank, International Monetary Fund and other international financial agencies wants the aid-receiving countries to implement these principles as a conditionality for receiving financial assistance. When it comes to labor laws, it is expected that ILO should look after that aspect. ILO being a UN organization needs to add flavors to labor market reforms while keeping the basic norms of the WC and AWC.

So the fresh attempt of labor market reforms in Sri Lanka should be viewed and analyzed in this global context. This so called market fundamentalist views are based on several myths and simple relationships. It has been argued by the advocates of labor market reforms that the lower wages will increase employment, flexible labor laws would increase investments. Many studies have shown that the relationship between wages and employment and wages and investment are more complex than the arguments advanced by neoliberal fundamentalists. A famous 1990 study, by David Card and Alan Krueger, compared fast food employment in New Jersey and Pennsylvania after one state increased its minimum wage and the other didn’t. They didn’t find a significant effect on employment. If need arise, I may cite many more studies showing that the relationship between labor market condition and investment and employment are not that simple.

In Sri Lanka, in the past ten years or so we have seen the security of the labor force had been adversely affected because of the government policies. I mentioned some time back in this column the contagion of man power agencies. Through manpower agencies, the flexiblization of labor market is practiced with the cooperation of the government. Labor ministry is jokingly but correctly called employer ministry as it rarely comes for the benefit of workers. Today we do not find judges like Canekaratne, Schokman and Coomaraswamy. Some of the steps have already been taken without changing labor laws by the previous governments. Employers need more. It was revealed by the new program of recovery by the Ceylon Chamber of Commerce. All want workers to pay.

The present so-called “yaha palana’ government is now preparing to legalize everything that had happened so far adding some more draconian laws supporting and ensuring super exploitation of the working class in Sri Lanka. In this backdrop, the protest organized by the 16 trade unions should be welcome and we should expect more direct and active involvement of organized as well as yet to be organized workers of all grades to defeat the attempt to create ‘flexible labor markets”.

*The writer is the Dean/ Faculty of Management and Finance, SANASA Campus. e-mail: sumane_l@yahoo.com

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Latest comments

  • 10
    0

    Let’s be honest. We are 20 years late on labour reforms.

    Our state sector could be reduced by may be 50%. CTB has 8 employees for every one bus. In the private sector 10 employees for 4 buses.

    Our military has too many and even the two state banks BoC and PB are over staffed. No politician has had the spine to do labour reforms because they could be politically suicidal.

    Hope Ranil cn do this. This is our last chance.

    • 0
      0

      Sumane, good one!

      The TUs should get together and demand a decent miniumum wage for all those who work 40 hours a week – as in South Africa and USA.

      Increasingly, globally, the poor work in service sector (fast food restrunts, security guards, transport sector etc) and work 40 plus days a week but remain poor and are part of the urban PRECARIATE.

      There should a national movement for a LIVING WAGE of 10$ a day for all who work in the service sector in urban areas – following South African labour rights aggitations..

    • 1
      1

      Sumane, good one! On the one hand savers and workers are being hit and forced to subsidize the rich scammers who play the stock markets and on the other wages are losing value due to depreciating rupee.

      The corrupt insider trader, Arjuna Mahendran at the CB is issuing BONDS and doing Greek style borrowing from unscrupulous German and other Banks which also lent to the Greek crisis and default while the IMF turned a blind eye to the coming crisis..

      In Lanka The rupee is crashing and the national debt expanding and the capitalists are being subsidized on borrowed funds while workers are being squeezed on all sides as their purchasing power depreciates with the crashing rupee..

      The TUs should get together and demand a decent miniumum wage for all those who work 40 hours a week – as in South Africa and USA.

      Increasingly, globally, the poor work in service sector (fast food restrunts, security guards, transport sector etc) and work 40 plus days a week but remain poor and are part of the urban PRECARIATE.

      There should a national movement for a LIVING WAGE of 10$ a day for all who work in the service sector in urban areas – following South African labour rights aggitations..

      • 0
        0

        Good Idea! A decent living wage of 250 USD at current exchange rates to stop the INEQUALITY GAP exploding in Sri Lanka, as the rich get richer and the poor poorer while the CB is run by a rent seeker and insider trader!

  • 4
    0

    Labour laws need to be changed, specially laws dealing with EPF and ETF. EPF regulations are utterly lop-sided and makes it such a head-ache for a small time employer to prepare the meaninglessly long and tedious applications, fill out the forms and submit on schedule. As a result, most small-time employers who run small farms and businesses avoid paying EPF. On the other hand, if the model operated by the United Kingdom, United States and other developed countries are considered, these formats need only a few minutes and is straight forward. I recall that even the Private Sector Pensions Funds that we had till about 1972 was a very simple system. These are things to look for and implement. It is also imperative to give some incentive to investors and employers to engage labour and staff. As things are, even if I have several million rupees or even dollars to invest in Sri Lanka, I will not simply because of these lop-sided requirements. Finally, after all these things are done, the EMPLOYEE will be lucky to retrieve even HIS contribution when he retires !!

  • 2
    3

    Good to hear at least one Intellectual is standing up for the Dalits.

    Good on you mate.

    Our PM Batalanda Ranil is all about free markets, privatization and Diaspora friendly globalization .. Right.

    He even promised one million assembly jobs for the Dalits in his Election gundu list . Sorry, his manifesto.

    Now VW and Toyota bosses aren’t going to come over and pay our Dalits and protect their rights the way they did in the countries from where they are now withdrawing their assembly plants.

    One question ,

    Are these Red Shirt wearing comrades JVP or Are they UNP trade union members just changed into our proletariet tops for the day.

  • 2
    0

    Only few mints ago this intellectual went to kadey for MR.

    He was not writing similar critical articles when his friend was killing trade unionists when they protested and was robbing you and me left to right.

  • 0
    0

    [Edited out]

  • 1
    0

    both Mahinda Rajapakse and Ranil are for American Type Capitalism which is now proven obsolete. That type of capitalism is making some filth rich individuals and leave most of the population in poverty.

    LAbour rights are another western blunder that makes the country bankrupt. Now, they work against it. If all the people are doing well financially, They will not work, production will go down, and it will be like Europe. Human labour is doing well but the country is bankrupt.

    So called POTHE GURAS too don not want to understand the practical reality, they just preach the book.

    It is the Chinese capitalism that we should grab to. govt is the richest and govt has money to spend on poor people.

    • 0
      1

      Jim softy,

      So correct what you say. Polity should have known before they voted Yahapalanaya in. Rajapaksa and China would have been ideal, but since our Lankans felt that Rajapaksa and China were immoral,……they have to now suffer.

      (good thing maybe, with America hovering around Chinese artificial islands…..let’s face it : China building Port city would have nothing to do with actual worth of Sri Lanka……can’t believe Yahapalanaya is actually considering Port City after all the lies they said about Rajapakse regime).

      With the new regime’s modus operandi, the rich of course won’t suffer, and only get richer. Fat chance that they are going to invest in the economy, when they want to e.g. live the Western dream in Sri Lanka, and send their children to the West to study.

      Therefore, to make it fair for all, hope the rich will be taxed (from the money they saved from paying low wages), and that taxed money is used to reinvest into the economy.

      But it is hoped that that tax money will go to reinvigorate the farming and traditional industry, so we won’t remain mired in the perpetual cyclic capitalistic quandary of curves and dips, meant only for rich countries with oil and other assets.

  • 0
    0

    Mr.Sumanasiri

    Reading books alone is not sufficient to gain access to
    knowledge.You need experience to win a life . Let’s go
    to a simple logic . What’s the history to our “Fish
    bun(Malu Pan)?” Had we ever got any fish in it ? When
    will you people learn that we are not liars and we
    never mean what we say either ! Why don’t these FCID go
    after these bakers who make bun without fish and selling
    it to customers for fish bun ? You know the funny part of
    it ? Customers willingly pay for it ever since it was
    invented and rose to fame !

  • 0
    0

    Sumanasiri is too old to hold these radicalised views. They don’t stand the test

  • 0
    0

    Better skills and pay againts inessienct and corruption.

  • 0
    0

    We have some of the best Labor Laws in Sri Lanka. These laws were achieved after real struggle. Be it the Canakaratna Award, Termination of Employment act or even the collective agreements. The west should learn and follow us and not we turn back.
    The workers charter was formulated with representatives of the Government, Employers and the Trade unions. Now it is time for us to implement it and not find ways to evade.
    In the name of Globalization,Industrialization we can’t succumb to anyone’s will and fancy.

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