Business Times

More regulation on employment?

By Ravi Peiris

After reading the article written by Mr T M R Rasseedin, President Ceylon Federation of Labour (CFL), in the Business Times of 3rd April 2011, which was entitled “Bring our law in line with National Workers Charter and ILO Conventions”, I was provoked to respond to some of the matters referred to in it.
As both, a practitioner and a student of labour law and industrial relations during the last 20 years, I am firmly convinced that industrial relations in our country is focused very much on having rigid labour frameworks rather than on exploring practical ways of setting up mechanisms to strengthen employer-employee relations at the workplace.

Sri Lanka has always respected ILO Conventions. I believe that we are one country which has ratified most of the Conventions vis-à-vis other developing nations and also introduced legislation in terms of it. In fact, it is relevant to note that a recent volume of the International Labour Review published by the International Labour Office, Geneva under the title “Is Asia adopting flexicurity?” which discusses labour legislation of six Asian countries, recognizes that Sri Lanka has introduced very few reforms into the labour legislation and continues to rely on an ‘older model of employer based security’. It also states that Sri Lankan labour laws are more rigid than the laws in India, especially in relation to termination of employment.

Therefore, from a macro perspective, I think, Sri Lankan industrial relations have been inundated with labour laws and there has been a tendency on the part of decision-makers to introduce legislation whenever they are confronted with an industrial relations issue. On the other hand, as a result of there being more regulation on employment, the working population in Sri Lanka have also been misled to believe that true security of employment can only be obtained through legislation. This has given some of them a ‘comfort zone’ and often misguided them on the realities of the labour market.

The article written by Mr Rasseedin refers to ILO Convention Nos. 87 and 98. The pith and substance of his position set out in the article is that although Sri Lanka has ratified these Conventions and guarantees the right to freedom of association and collective bargaining in terms of the Constitution as well as the labour laws, there are many employers who “find ingenious ways and methods not to tolerate Unions in their establishments”. In other words, these rights need more protection. He is promoting further regulation.

But, on the other hand, there is an implied acceptance and an admission that the laws already in force have not delivered the goods. This is the reality that needs to be accepted by all industrial relations stakeholders. I am not, promoting a “hire and fire” regime. We do need a basic legal framework of labour protection with room for flexibility. But, I am firmly of the view that industrial relations issues cannot always be addressed through legislation.

Especially in the context of recognizing unions and the right to collective bargaining, it is important that we ensure proper and conducive environment and address issues and obstacles that prevent both recognition of unions and collective bargaining, raher than look at more regulation.

The ILO Convention No.98 very clearly refers to “voluntary” collective bargaining between parties. Therefore, the term “voluntary” suggests that parties cannot be forced. Furthermore, it is extremely necessary that one considers the particular industrial relations culture of a country in interpreting labour standards. There cannot be a “one size fits all” approach. Sri Lankan industrial relations have been historically adversarial. Multiplicity of trade unions, inter union rivalry have contributed to this situation. These factors adversely affect healthy collective bargaining.

Therefore, in such a context, it is necessary for us to have mechanisms to ensure that the trade union which seeks to bargain with an employer will have sufficient representative strength to bargain effectively and bring about a collective bargaining agreement which could be sustained throughout the agreed period. On the other hand, we cannot expect an employer to bargain separately with three or four different unions making different demands in respect of the same category of employees. We need to identify the most representative union/unions which are able to bargain on a common understanding.

In relation to recognition of unions for collective bargaining purposes, the bargaining agent should be chosen having regard to the particular circumstances of the case and giving due recognition to the fact that the bargaining agent or agents would represent a significant majority of the workers in respect of whom the bargaining agent bargains.

The EFC promotes collective bargaining and has been involved in it on behalf of employers since 1929, when it signed the first Collective Agreement with the All Ceylon Trade Union Congress led by the late A E Goonesinghe. Ever since then, the EFC has adopted a 40% cut off point for purposes of collective bargaining which has worked quite successfully, even in the absence of any legislation up to 1999. All major representative unions in Sri Lanka have accepted this basis.

The Industrial Disputes (Amendment) Act No.56 of 1999 makes collective bargaining mandatory in the event of a union having more than 40%. Making collective bargaining mandatory is inconsistent with the ILO Convention on Collective Bargaining which states that there should be voluntary collective bargaining between parties.

The Industrial Disputes (Amendment) Act No.56 of 1999, on the face of it, is discriminatory against employers. This piece of legislation contravenes ILO Convention Nos.87, 98 and 135. Firstly, it only sets out unfair labour practices on the part of employers without setting out any such instances on the part of trade unions or worker organizations. Secondly, it is also inconsistent with the ILO convention No.87, which states “workers and employers, without distinction, shall have the right to establish….. to join organizations of their own choosing without previous authorization”.

The operative words in this Convention therefore are the workers right to “join organizations of their own choosing”. Accordingly, whether that organization should be a Trade Union, a Workers Association, a Workers Council or an Employee Council is a matter that needs to be decided by the workers. Unfortunately, the Act No.56 of 1999 only envisages trade unions and pre-supposes the fact that a workers organization should necessarily be only a trade union and not any other organizations of his choice. Therefore, it is not consistent with ILO Convention No.87. Thirdly, the Act No.56 of 1999 is also inconsistent with ILO Convention No.135 on workers representatives which clearly identifies worker representatives who may or may not be members of a trade union.

In the circumstances, with all due respect to the trade unions, employers and the government, which are the key stakeholders in employment, we cannot forget the most important element in this equation, which in fact, is the worker. In the context of choosing an organization of the workers, it is important that we ensure that the right of the worker to freely choosing his organization is protected. Neither the State nor the trade union nor the employer nor any international organization should dictate to the worker as to what organization should represent him. The freedom of association lies squarely within the choice of the employee. It is the employee who can choose either to join or not to join an organization of his choice.

Do we have a way forward? I believe we do. However, we need a concerted effort on the part of all stakeholders, including the society at large. We need to acknowledge the reality that issues relating to labour standards can always exist. No country can boast of full compliance of labour standards. The same can be said of our country as well. We also should agree to address these issues.

However, the fundamental principle that we need to accept is that there are certain aspects in relation to industrial relations which cannot be remedied through legislation. Recognition of trade unions is one of them. Collective bargaining is same. We need to have a change of attitudes, both among trade unions and employers, who may perceive unions as destructive organizations. Unions need to demonstrate positively that they are genuinely interested in safeguarding not only the workers but the enterprise as well. They need to ask the question: Why do some employers resist us? Employers need to ask: Why do we not want unions? Answers to these questions cannot be included in the law. The answers need to be given by looking inwardly.

In conclusion, I firmly believe that employers in Sri Lanka, by and large, conform to the labour standards which are set out in the legal framework relating to employment law. However, there is a need to take adequate steps to fill in the gaps that need to be filled which may help in achieving a higher level in relation to labour standards. But, introduction of legislation is not the answer. It is important that all three social partners, the Government, Employers and Trade Unions/workers commit themselves genuinely towards addressing this problem without having any other ancillary interests which could jeopardize such efforts.

Finally, I am reminded of a profound statement made by the founder Chairman of the EFC, the late Mr S P Hayley in the course of his speech made at the inaugural meeting of the EFC, more than 80 years ago which remains valid and pertinent to us even today. Mr Hayleys said:

“Labour nowadays cannot be fought. We still perhaps have a certain number of diehards who think that they can dictate to labour and also refuse to listen to arguments to the contrary, but even they are gradually fading away”.

I believe this is not only true of Sri Lanka. It could be the case in most other countries as well. What is important is to address the issues with a genuine and a positive mind ensuring that employment in our country will not only be sustained but would also be generated This would in turn result in the well-being of our society and our country.

(The writer is an Attorney-at-law and is currently the Director General of the Employers’ Federation of

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