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Regaining Sri Lanka initiative on employment relations By
G.D.G.P. De Soysa It
comes at a time industrial relations practitioners are on the search
for new directions. Labour relations in Sri Lanka originated in
tea and rubber plantations and spread to trade, commerce and manufacturing.
It took form with enactment and enforcement of several labour laws.
Employers and employees were enabled to organize themselves and
register as trade unions; undertake action in furtherance of trade
disputes; engage in acts of withholding labour or "locking"
out labour. Such
parties eventually after testing their strength resolved differences;
reached agreements laying down terms and conditions of employment;
and set patterns of industrial behaviour. The state acted as the
third party holding scales evenly permitting legal effect to agreements
reached by social partners after collective bargaining. In the mid
20th century these practices were accepted as normal patterns of
Industrial Relations. In
the post Independence period labour relations prospered under welfarist
policies pursued by Sri Lanka. With nationalization and expansion
of state sector challenges were imposed on prevailing system of
social relations. The private sector began to decline. A politically
powerful state sector emerged clouding the growth of private initiative.
Opening
up of the economy in 1977 ushered a reverse process. Structural
reforms brought liberalization of the economy. State enterprises
were slowly dismantled. In some instances workers were offered a
predetermined quota of shares in divested state enterprises. With
encouraging macro economic policies pursued by government, the private
sector expanded. New
strategies were undertaken to expand the economy, create more employment
and absorb a large number of women who sought entry to the labour
market. Free Trade Zones were created to encourage Direct Foreign
Investment. State sector declined at the end of the century. The
full impact of globalization and liberalization had settled over
the economy. Desired
Change in Labour Structural changes consequent to liberalization impacted on workers in the short-term in the form of displacement, retrenchment or unemployment. A market-oriented economy demanded a change in worker ethos and attitudes towards labour rights. In some cases it led to worker agitation and industrial unrest. It some ways it led to civil unrest, disruption, social costs as well. Existing labour institutions and instruments came under close scrutiny. Questions
were raised as to the relevance of existing models of employment
relations and whether they will guarantee stable Industrial Relations.
Answers were sought to transform such relations to keep abreast
of socio economic changes induced by globalization. An
area of interest was change in work organization; compatible wage
and compensation payments; workplace governance and employment flexibility.
People of different nationalities were required to operate in three
dimensions - the world economy, regional markets and local markets.
This development posed a challenge to both managers and workers. New
outlook on labour Social
partners were aware of instruments of conflict resolution provided
in labour law, yet in the new context one was expected to go beyond
the borders. Entrepreneurs were compelled to take a global outlook
and view the total environment as a frame of reference. This included
consumers both local and overseas, shareholders; civil society;
bureaucracy, and technocracy; organizations of employers and workers;
international agencies and media. External environment influenced
actors in employment relations. Though
the labour law provided an institutional frame for the conduct of
industrial relations through Mediation, Conciliation, Arbitration
and Adjudication of disputes and thereby helped regulate industrial
behaviour, these measures were time consuming. Labour market regulation
was required to be clear, consistent and timely. Flexible
and well informed labour markets were sought by investors. Worker
support systems like information centres, awareness programmes,
consultation before action and safety nets were in demand. New concerns
came to impact on prevailing labour policy; labour law and labour
market behaviour as well as employment relationships between workers,
unions, and employers. Employers sought flexibility. Workers sought
guaranteeing of worker rights. New
concerns of industrial relations In the new context the urge was to cultivate stable industrial relations. New concerns came to include relationships of workers (and their unions), with employers and the government; labour policy, labour law, and labour market intervention; employment flexibility and redundancy. Changes in work organization and work place governance were some new developments. Fair
Employment Relation
practices came to be identified. Seven unfair labour practices were
identified by an amendment to the Industrial Disputes Act (1999)
to give effect to ILO Convention 87. Employers desired a code of
conduct for employees. Recognition was sought for "de recognition"
wherever a union loses its representative character. Atypical
forms of employment appeared as a movement to use temporary workers,
indulge in "out sourcing", "contracting out"
. These practices took a firm hold on industry. Strategic alliances
with outside organizations appeared. Decentralisation of work enabled
companies to fly out data analysis to countries where unemployment
is high and staff is abundant. Experience tells us that in future
“work” will commute to work places rather than employees
commuting to traditional organizations. In some ways the world is
indeed becoming borderless. The
transformation that the world of work is undergoing has given rise
to a claim that labour laws should be reformed in order to avert
adverse labour outcomes and provide for smooth labour mobility.
Claims are made that comprehensive labour law reforms are necessary
to guarantee economic efficiency of firms. Fair labour practices
are recognized as a safeguard to stable industrial relations whenever
they originate from Consent and Consensus. There
is strong support for the view that labour laws and supporting institutions
and rules should be continually reviewed. "Labour legislation
in many countries in the region reflects an outdated approach based
on minimization of industrial conflict. Greater
priority should be given to how regulations can be used to establish
a framework for Managers Workers and Trade Unions to pursue improved
productivity and flexibility on a participative basis while still
providing appropriate protection for workers and share in the benefits
of growth". How should we proceed? "In many Asian countries
regulations emphasize the role of industrial workers but rural agricultural
workers, workers in domestic service, casual and contract labour,
workers in shops and other small businesses and special groups are
either excluded or their position is ambiguous". We
live in an era when trade unions desire to assert influence over
state policy on wages, pensions, investments and labour markets.
Some unions have divided views on privatization, some are ideologically
committed or politically oriented and exhibit an inclination to
oppose change in established work regimes. The
tenets of labour law in Sri Lanka are claimed to encourage an employee
in the assertion of his rights whatever the circumstances in the
workplace. It enables unions to be over-active and sometimes undertake
precipitate action. The Commissioner of Labour has stated that in
the year 2000 his department conciliated and settled 95% of a total
of 13500 labour disputes received from workers. The Employers Federation of Sri Lanka representing 400 member firms has stated that within the first two months of 2001 there were six strikes in member firms. They had 9 major strikes in 1998, 13 major strikes in year 2000. Labour laws provide for fair labour practices in fixing wages and remuneration, social security and dispute settlement. Social partners have laid down a procedure for dispute handling. It provides for discussion with management, the employer organization and finally the Commissioner of Labour. Functional
flexibility in industrial Employers
push for change in work practices providing for functional flexibility,
integration of quality and productive work; flexible deployment
and continuous improvement and in doing so seek labour's support
and co-operation to build high trust relations. However,
as employment stability becomes the starting point for negotiation
with unions, employers face the dilemma of ensuring that future
changes and trade protection measures will enable continued survival
of harmonious relations between social partners. Gains from globalisation
which appeared in the eighties and nineties were dependent on responses
of producers to changing competitive environment. One
critical area of change found necessary was in organization of production
as competition compels a firm to deliver products of greater quality
and variety with speed. This
compels a firm to reorient its internal organization, change production
layout, introduce new methods of quality assurance and institute
processes to ensure continuous improvements. Changes in plant organization
undertaken in response to these developments have major implications
for the content and organisation of work. Flexible
work, team work and employee involvement desired by employers offer
more skilled and complex work may impose greater discipline and
place more discretion in the hands of management. Review
of All
this means existing patterns of work as well as labour relations
come in for review. Union rights to influence day-to-day running
of factories may be challenged unless the framework of employment
relations are flexible to achieve these purposes with growing confidence.
Responsibility may be passed on to workers to undertake basic inspection
and encourage continuous improvement practices. The
result may be multi tasking, flexible deployment, self-correction
and monitoring correctly first time results by workers with skills
and knowledge. It may call for effective control and motivational
systems. New work practices like JIT or TQM may be installed depending
on prevailing good employment relations within an industry. Non-wage
A
recent development has been the inclusion of several non-wage issues
in the bargaining process enabling social partners to reach an accord
on flexible employment relations, manning a better working environment,
providing safety and health and ensuring productivity gains. Productivity
bargaining has emerged in several recently concluded collective
agreements and several managements have admitted that collective
action has enabled them to gain productivity increases with the
co-operation of their employees. Transformation
of IR Unlike
patterns of industrial relations which we have been used to in the
past, employment relations in future will embrace all aspects which
arise from and are connected to an employment relationship. It
transcends normal industrial relations and includes social relations
of production in formal as well as non-formal sectors of employment;
individual as well as collective aspects of employment; social relations
in industrial and non - industrial settings. Such employment relations
are a much larger area of social influence than industrial relations. Employment
relations approach An
approach with a medium or long term economic survival focus will
have a better chance of balancing socio / economic systems in the
emerging business environment . An employment relations' practitioner
is more than a conflict manager as "hard systems are not enough
to address expectations especially the unspoken ones". This
approach provides for proactive and constructive management of work
place relations and allows for utilization of differences in role
players perception, attitudes and behaviour, through a process of
participation in which so called soft issues are also addressed.
It provides for an opportunity for the trade union to maintain corporatism
in order to balance expectations of working people with reality. The
Regaining Sri Lanka initiative when translated into action involves
a rapid development of the country over the next 10 years with support
to 64 major development projects seeking Infrastructure Development,
Road Networks, Airports and Seaports, Urban settlements, Upgrading
of Cities, Environmental Protection, Development of Mineral and
Water Resources. It promises one million jobs for the unemployed,
creation of modern sector employment in new industries, IT based
services sector, Cultural and Social Re-awakening all on the basis
of the $4.5 billion donor assistance expected from the international
community. In
this scenario a new thrust in employment relations is expected to
support job creation, provide safety nets, restore economic growth,
raise incomes and offer decent work. (The
writer is the Director, Migrant Services Centre and formerly a Senior
Assistant Secretary at the Ministry of Labour. Note - the article was written before parliament was dissolved and fresh elections called by the President.)
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