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Private sector gets step-motherly treatment

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This month public sector workers were able to reap the benefits given by the interim budget of 2015 with rupees 5000 being added to their salaries by way of an allowance. However in his budget speech Minister of Finance Ravi Karunanayake merely requested private sector employers to increase salaries by rupees 2500 thereby helping the national program.

However JVP Western Provincial Council Member H.D Lalkantha accused the government of not initiating a proper basis for a salary increase on behalf of private sector workers. The JVP has continuously referred to the direct contribution made by the private sector to establish good governance. As such the party has emphasized that it is not sufficient to make merely a request to increase their salaries from the Interim Budget.

Speaking to The Nation Deputy Minister of Policy Planning and Economic Development Dr. Harsha De Silva said that it is not up to the government to demand that private sector salaries are increased. “We can only suggest an increase or to mandate a minimum salary requirement” the Deputy Minster said adding that he is hopeful that the private sector owners will make note of the cost reductions implemented by the government, thereby giving that benefit to their employees through an increase of salary.

However with the government unable to enforce private sector salary increases employees have been left disgruntled as companies are not bound to provide salary increments suggested by the interim budget.

Wages Boards
The Government has called on the National Labor Council to increase the salaries of workers in the private sector parallel to the salary increase in the public sector which will see the wages boards of each respective sector gathering in order to decide on possible increases. Speaking regarding the issue Cabinet Spokesperson Minister Rajitha Senaratne had said that it has been agreed to increase the private sector salary by 15–35 per cent according to profits and to increase the minimum salary level to rupees 10,000.

Speaking to The Nation Commissioner General of Labour, Herath Yapa revealed that wages boards are currently meeting in order to discuss the matter. Sri Lanka has 43 wages boards and according to him all have been called for discussions in order to increase salaries of each sector.

“We had three meetings today and the respective sectors got a salary increase of 25 – 27 per cent” he said adding that meetings will continue in to the next week as well due to the large number of wages boards in existence.

However many parties, mainly the JVP in recent times have alleged these wages boards are defunct. When questioned, while reluctant to say if these boards were in fact functional in the recent past, Yapa said that these wages boards are now fully operating.

As confirmed by Yapa, the current minimum wage for the private sector is rupees 7900. However it is unlikely  any worker will benefit from the minimum wage increase as minimum wage workers currently are paid higher than the rupees 7900 stipulated by the government. Therefore it can be said that a mere increase by rupees 2,100 is hardly a significant increase taking the economy into consideration.

However Deputy Director General of the Employers’ Federation of Ceylon Kanishka Weerasinghe speaking at a conference recently was critical of the government’s request to increase salaries instantaneously. According him it is the market forces that should determine salary increases in the sector. He also added that the private sector always provides salary increments to its employees in April either way.

“The private sector cannot be compared to the public sector” he said adding that private sector salaries therefore cannot be increased parallel to the salary increase in the public sector. However he was also receptive of the rate of rupees 2500 increase as being an acceptable amount.

Along with the increase of public sector salaries Trade unions affiliated to Sri Lanka’s private sector have threatened to resort to trade union action if the government fails to address the demands of the private employee. On February 17, Workers of two factories at the Katunayake Export Processing Zone (EPZ) conducted a strike demanding an immediate salary hike, in accordance with the new government’s suggestion of the rupees 2500 increase to the private sector.

Inter Company Employees’ Union (ICEU) head, Wasantha Samarasinghe had threated that the private sector working cadre that amounts to around 6.5 million would take to the streets if the government fails to address their demands.

Speaking to The Nation Co- Secretary of the Free Trade Zone Workers Union Asela Dissanayake said employers of the Free Trade Zone (FTZ) have collectively decided to increase workers’ salaries by rupees 1000. “We are not satisfied with this” he said adding that workers of Biyagama and Katunayake did not receive the rupees 500 increase requested by the previous government in 2014 as well. “All these companies have got tax relief so they should increase the salaries of the workers” Dissanaayake said adding that workers are adamant they are given an increase of rupees 2500.

Call for an Act
Due to the government’s inability to enforce salary increments of the private sector there has been a collective call for the benefit to be implanted through an Act in the Parliament. A salary increase was granted to the private sector in the year 2005 through a Parliamentary Act
The JVP had stressed that relief cannot be granted to the Private Sector simply by making appeals by the Government while pointing out that laws should be enacted to pass on the benefits of the interim budget to the sector.

According to Dissnayake trade unions are of the opinion that this is the only way to ensure an increase is given by private sector employers. “It is the government’s responsibility to ensure this” he said adding that however companies’ threats to leave are influencing the decisions by the government.
Wasantha Samarasinghe of the IECU said such legislation should be presented to Parliament and passed within the government’s 100 day program. According to Samarasinghe, the government’s move to increase salaries of the private sector through wages boards has not been beneficial to the private sector workers.
Unfortunately however for the sector Herath Yapa confirmed that currently the government is focusing on increase of salary through wages boards. “It can be done through an Act but we have been instructed to first attempt it through the wages boards” he said admitting however that employers are not bound to make such an increase as suggested.

Despite the many benefits given by the government and decisions by the wages boards it is clear unless such an Act is brought in order to compel employers benefits will not be granted to many private sector employees who will eventually fall through the cracks. Therefore while the public sector may enjoy its salary increment the struggle is to continue for private sector workers.

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