The proposed private sector wage increase will not be an ad hoc increase, but will be implemented through the tripartite Wages Board mechanism, the Minister of Labour says after the private sector complained about the arbitrary hike.
“There is a procedure set down by law in this country for wage increases. We will follow that. We have a tripartite, wages setting mechanism with government, employers and worker representatives. So the wage increase will be through the wages board, not outside that. Any wage increase will also be agreed by all three parties,” the Minister Athauda Seneviratne, told the Business Times.
450,000 BOI workers to get 15% wage hike from January
Some 450,000 workers at Sri Lanka’s Free Trade Zones are in for a bonanza after the government on Tuesday announced that wages would be increased by 15 % with effect from January 2010, trade union officials said.
The announcement was made by Board of Investment (BOI) Chairman Dhammika Perera to a delegation from ALARM (an apparel industry labour movement) led by officials Palitha Athukorala and Anton Marcus at a meeting at the BOI. The meeting had been arranged by Senior Presidential Advisor Basil Rajapaksa whom the delegation met on Monday evening at Temple Trees.
“We approached both main candidates – President Mahinda Rajapaksa and General Sarath Fonseka – to improve on the wages of the workers and other issues,” said Mr Athukorala. ALARM is a collective of trade unions and civil society groups working in the apparel industry.
The BOI is charged with setting wages and last month announced that workers will get a Rs 500 increment for 2010, an annual announcement.
The 15% increase is on top of the Rs 500 and accordingly new entrants and experienced workers would get an increase from this month of between Rs 1,500 to Rs 2,000. New entrants at the BOI start on a salary of Rs 6,750 while a worker with some experience gets around Rs 10,000. More experienced workers get more. |
Officials at the Labour Commissioners’ office also confirmed that their instructions are to follow the Wage Board mechanism in formulating a wage increase for private sector workers in the country. Officials also said there was no ruling to increase wages by exactly Rs 2,500 per month, across all sectors.
“The wage increase will be through the Wages Board, which means the actual amounts will be decided by employers as well as the trade unions sitting in the different Wages Board. There is no rule saying the increase has to be exactly Rs 2,500 for everyone. It can be even more than that if they can agree to it,” said an official at the Department of Labour.
Sri Lanka’s private sector currently has 43 tripartite Wages Board. Around 7 are for the services sector and the balance are other sectors like manufacturing and plantations. The plantation sector that is not covered under the most recent, 2009 Collective Agreement between employers and trade unions, will also be included in the proposed round of wage talks, under their Wages Board.
Trade unions point out that in 2009, Sri Lanka’s private sector employers did not increase wages for their employees because of business difficulties related to the global recession. So this year trade unions are pushing strongly for wage increases across the board.
Meanwhile, the Employers Federation of Ceylon (EFC), the private sector employers’ representative, has written to the national labour authorities suggesting introducing a ‘productivity linked wage mechanism’ for wage increases. The EFC also says it was not informed of the order to summon the Wages Board.
“Several media reports have indicated that your Ministry has ordered the Commissioner General of Labour to summon the Wages Boards of different trades, and increase private sector wages by Rs 2,500,” said the EFC in a letter to the Minister of Labour. “We are indeed surprised to note this news report, as such a proposal was never discussed or debated at the last National Labour Advisory Council meeting, last held in November 2009. In fact, you would recall that what was in the agenda for discussion on that day was a proposal by the Ministry to explore possibilities of introducing a ‘productivity linked wage mechanism’,” said the EFC.
However, worker representatives maintain that private sector workers, that account for the majority workforce in Sri Lanka, are over due for a wage increase. They point out that lower private sector salaries have created a social inequality, where governent workers are seen as privileged, because they earn much higher salaries and enjoy many other perks on top of salaries. |
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