Financial Times

Stay away from wage issue, Chamber tells government

A top Sri Lankan chamber this week urged the government to ‘lay-off’ and not intervene in the wage issues of the private sector. ‘Private sector employees should be compensated but at the same time we reiterate that the private sector itself be allowed to look after (their workers) without the intervention of the government,” A.K. Ratnarajah, Chairman of the Ceylon National Chamber of Industries (CNCI) said in a letter sent to Minister of Labour Relations and Manpower Athauda Seneviratne.

Mr Ratnarajah, referring to media reports where the Minister has asked the private sector to raise salaries of employees, said the private sector recognizes that wage levels of its employees are commensurate with the escalating cost of living and high inflation.

“Almost all companies review their employees’ benefits at least annually and compensate them taking into consideration inflation, market forces, their performances etc. We therefore fail to understand the need for the government to intervene and thereby create imbalances in the system,” the chamber chief said in a hard-hitting letter, released to the media.

He said there are various ways the private sector compensates its employees through production incentives, attendance bonus, traveling allowances, traveling facilities, meals at work places, shift allowances, welfare facilities, medical/health facilities, ex-gratia payments, etc in addition to the basic wage.

“These various allowances and benefits are balanced in such a way as to achieve the desired results. Thus raising the basic salary upsets these balances and rewards the inefficient and efficient equally,” he said adding that the principle of government intervention itself acts as a deterrent for the private sector to increase various forms of remuneration as those increases will be disregarded when government intervenes to increase the basic salary.

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