Is it the unkindest cut of all for Sri Lanka’s labour market? This appears to be the case for thousands of employees who are finding themselves in a vulnerable position as big and small scale companies cut wages, delay monthly salaries and, worst of all, sack workers as these organisations struggle to recover from the [...]

Business Times

Concerns of Sri Lanka’s workforce


Is it the unkindest cut of all for Sri Lanka’s labour market?

This appears to be the case for thousands of employees who are finding themselves in a vulnerable position as big and small scale companies cut wages, delay monthly salaries and, worst of all, sack workers as these organisations struggle to recover from the situation created by the COVID-19 pandemic.

In April, the International Labour Organisation (ILO) said that rapidly intensifying economic effects of COVID-19 on the world of work will result in nearly 200 million full-time workers losing their jobs in the next three months alone.

According to the agency, “the latest dire assessment reflects the full or partial lockdown measures affecting almost 2.7 billion workers – four in five of the world’s workforce”.

Closer home, reports are filtering in of hundreds of workers finding themselves out of work, particularly in garment factories, their salaries not being paid or being subject to reduced wages. While in most cases, this is not a deliberate attempt to stifle the workforce but arises out of circumstances where companies have lost job orders, the process of sacking workers hasn’t followed the normal government regulations which are stringent when it comes to laying-off workers.

As I reflected on these developments, I heard Kussi Amma Sera telling her two friends under the margosa tree: “Mama danna goda denekta angalum hal wala prashna raashiyak (Many people I know are facing numerous difficulties in garment factories).”

Mage yaluwangeth rakshawal nethi wela (My friends too have lost their jobs),” noted Serapina while Mabel Rasthiyadu chipped in with: “Meka loku prashnayak. Harihaman visadumak avashyayi (This is a very serious problem and needs a proper solution).”

A Labour Department electronic survey in which a total of 2,764 private sector establishments had responded found that 53 per cent of the organisations had their businesses ‘closed’ during the survey period (April-May). The total employment in these establishments in February was 596,022, with 64.26 per cent of the employees without work during this period. More than 1,000 establishments had indicated that they were unable to pay salaries to their employees.

While workers are somewhat able to overcome a temporary reduction in wages, a phenomenon across most companies in Sri Lanka as they battle to resuscitate their businesses in the face of poor demand, the unkindest cut is in losing a job and not being able to find a new one in a depressed labour market. If a health survey is to be conducted among the workforce, depression and anxiety are sure to score high in the list of problems.

As I continued to listen to the trio and their woes about how friends and relatives were being forced out of work owing to the economic crisis, the phone rang. It was ‘Seeni bola’, my retired banker friend (so named by friends after he once boasted that other banks were handling ‘seeni bola’ deposits compared to his bank).

“I say, the economic situation is precarious and companies, big and small, are struggling to survive,” he said. “In addition to that people are losing jobs, while others are facing severe pay-cuts while retaining their jobs. It’s a real struggle for wage earners,” I said.

“The government’s bail-out package is also not working out according to expectations. In particular, many small businesses have not been able to access working capital loans or get a moratorium on loan repayments. On the other hand, the amount set aside by the Central Bank for this package is far less than the total urgent requirements of the banking sector,” he said.

“I recently heard an online discussion where a founder CEO of a small consultancy lambasted CEOs of some companies for laying off workers, saying they talk big about much publicized CSR projects and how they are helping society but have no qualms about sacking workers and causing misery in those families,” he continued to say.

The discussion then shifted to the political situation, the forthcoming general elections and the management of the COVID-19 pandemic.

The crisis is a catch-22 situation for both companies and workers. Heart of hearts, it is unlikely that Sri Lankan companies are deliberately cutting jobs and using COVID-19 as an excuse. Job cuts are essentially because companies are struggling to secure orders – particularly in the garment sector.

Having said that, unions argue that a consensus had been reached by the Tri-parte Task Force – which includes workers, companies and unions – established under the patronage of the Labour Minister on how to manage jobs and prevent dismissals and this agreement was being blatantly violated. This committee needs to get a bigger mandate on resolving the issue of employment uncertainties.

Four unions in a recent letter to the Commissioner General of Labour, R.P.A. Wimalaweera, raised the many problems faced by workers in factories in and outside free trade zones.

Citing the situation in 35 companies, the letter states that workers have been sacked, not asked to report to work, salary reductions enforced arbitrarily, transport facilities to the workplace suspended, and the employment of those over 50 years of age discontinued, among a host of concerns leading to many workers being out of work or getting sharply reduced wages.

Unions also accused companies of transferring employees of certain factories to other factories of the same company which are about 50 km away from their present workplace without providing transport facilities. In the event of the employees failing to report to work in this situation, they are removed from service, being treated as vacation of post, the unions claimed.

Admittedly, the COVID-19 pandemic has affected companies across the board and these institutions are facing a major crisis in reviving their businesses, retaining workers while there is little work and paying salaries when there is no revenue coming in. However, unions argue that garment factories are slowly getting orders for COVID-19 related material production (personal protective gear, etc) and thus have to run their factories and hence need to retain staff.

Another problem faced by workers is that during the crisis period, individual workers were multi-tasking and doing the jobs of many workers as movement was restricted and only a few were allowed into the workplace. In such a situation, there are reports that some companies are rightsizing by giving multiple tasks to individual workers which would have been handled by two or three other workers earlier and thus reducing the numbers employed, which helps to cut production costs and increase profit.

These developments don’t take into account the sufferings of Sri Lankan workers abroad who have either lost their jobs, faced wage cuts or have not been paid for several months, while also being vulnerable to COVID-19 infections. Many are desperate to return to Sri Lanka but the government has now said that bringing back Sri Lankan students from abroad is a bigger priority than repatriating migrant workers, which is a very unfair move.

Finally, sipping my second cup of tea brought by Kussi Amma Sera, I reflected on the future of Sri Lanka’s worst-ever economic recession and the bigger, emerging problems in store for the working class.


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