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Current labour laws are not conducive to attract investment and generate employment opportunities. In today's context it is important to reform labour laws to permit greater flexibility in enterprises, attract investment and promote stability in industrial relations, the Director General,

Employers' Federation of Ceylon (EFC), Gotabaya Dasanayaka said. "We have seen fundamental changes in our economy with the emergence of the market economy and emphasis being given to the private sector. But we have not seen a corresponding change in the labour law framework to meet the challenges that are concurrent to the market economy. We have taken it up at different discussions with the Government and also spelt out the areas that need labour reforms," Dasanayaka said.

An attorney-at-law, Dasanayaka joined the Employers' Federation of Ceylon (EFC) as its Secretary General in 1979. On completion of 23 years of service at the EFC, Dasanayaka today serves as its Director General and Chief Executive. Being the Chief Executive of EFC, he is also a member of its Board of Trustees. The EFC council which is a policy making body is led by the Board of Trustees. The Council is chaired by Ratna Sivaratnam, the former Chairman of Aitken Spence and Vivendra Lintotawala is the Vice Chairman.

In today's Meeting Point column Dasanayaka discusses some of the key facts in employer/employee relations and the importance of having reviewed the current labour legislation.

Key areas

EFC has identified three key areas for labour law reform: Labour Relations (Industrial Relations); Termination of Employment and Terms and Conditions of Employment. Labour laws should be consistent with the demands of the open market economy.

The EFC has repeatedly made submissions to successive governments in Sri Lanka to review and amend the labour law regulatory framework to give it greater flexibility and consistency with the current open economic environment. Submissions were made to the present Government in December 2001.

"Our current labour law regime is essentially what existed prior to 1977 when our industry was heavily protected through stringent import substitution measures. The free market economy that was introduced after 1977 calls for a more dynamic private sector driven national economic growth. Globalisation demands flexibility of enterprises to grow and adjust to an ever-changing market environment. National economic growth and stability also call for massive private sector investment," Dasanayaka said.

Dialogue with TUs

The EFC has already explained this matter to trade union representatives. "We believe that a dialogue with the unions is necessary to take this forward. TUs should also understand that there is a need for certain changes in labour legislation. This needs to be looked at from the point of view of foreign direct investment which we need badly. Most importantly, having considered our level of unemployment, we need labour-intensive industries. It is no secret that our labour law framework is a disincentive to investment. We need to draw a distinction between protecting those in employment and protection of employment," Dasanayaka said.

The best way to protect employment is to generate employment. Unfortunately our labour laws tend to protect those in employment - to such a degree that investors are scared to invest in labour intensive industries.

It is important that all stakeholders identify this need and review the current environment from this point of view and see how we could work out a system which is sufficiently flexible," he said.

EFC services

EFC consists of 440 members representing different industries and trade sectors. It also represents Regional Plantation Companies (RPCs) of which 23 are in tea and rubber and two in tea and coconut. EFC is a registered trade union - a trade union of employers - as it looks after the interests of employers.

Established in 1929 during British rule to face the challenges of industrial relations, EFC's responsibilities include: Advisory services on Labour Law, Industrial Relations and Human Resource Management. It provides legal representation services in Labour Courts and before Arbitrators, Department of Labour and in Collective Bargaining negotiations with Trade Unions. It helps draft Collective Agreements and employment related documents such as Contracts of Service and Letters of Termination. It advises employers in disputes settlement through negotiations with Trade Unions and offers consultancies on labour issues in enterprise re-structuring and the drafting of employee manuals of procedure.

While maintaining its prime duties, EFC has also diversified its services to areas such as training, HR development, publications and skill development activities.Some of its endeavours are duly supported by the International Labour Organisation (ILO).

Why is it important?

"Following globalisation, the competitiveness of organisations has become more important than ever before. It is only through enterprise competitiveness, that a higher growth of national competitiveness can be achieved. We subscribe to the view that HR development plays a major role in sustaining the competitiveness of any enterprise. Therefore, the enterprises should focus more on developing HR skills of their employees," Dasanayaka said.

"We started research and publication units in the 80s. At present we publish a large number of booklets to educate both employers and employees on various industry related issues. This will also help develop the capacity of our members and their managers to face the challenges they have to encounter in a highly competitive market environment," Dasayanaka said.

The EFC is a member of the International Organisation of Employers (IOE) which has consultative status in ILO. "We as an organisation are committed to respecting fundamental labour standards. We believe in freedom of association and in collective bargaining," the EFC chief said.

Many of our member institutions seek our advice in restructuring employment, rationalising cadre levels, re-assigning work arrangements and negotiating with the trade unions on these. In fact we've had a very positive experience in discussing restructuring with TUs and facilitating the restructuring of companies as an adjustment to meet their demands," Dasanayaka said.

"We participate in a lot of activities with the ILO. We represent one of the principle constituents of the ILO, which acts on behalf of governments, employers and workers. We have a professional team of 20 people, mainly lawyers. They get opportunities to get trained internationally. We have forged close links with other employers' organisations particularly in Japan, Ireland, New Zealand, Singapore and Malaysia," Dasanayaka said.

The EFC is a self-funded organisation through membership fees. It also generates funds through training programs, subscriptions, seminars and publications. "All services the EFC provides to its members are based on subscriptions. But for labour court appearance we charge a subsidised fee," he said.

Aid to the disabled

"Last year, the EFC embarked on setting up a network for the disabled. The objective is two-fold: to play a positive role in bringing every section of the population into the labour force, including those who are regarded as marginalised. By doing so, we also demonstrate EFC's social responsibility towards the disabled.

We hope to build a link between the disabled and employers in order to support the disabled with employment opportunities and vocational training.

We are still in the initial stage of this project. The International Labour Organisation has pledged its fullest support to this worthy activity," Dasanayaka said.

Settling disputes

"Both through its initiative and with the assistance of USAID and now Asia foundation EFC has set up an Employment Mediation Centre.

We look upon mediation as a very effective form of settling disputes. Mediation facilitates both parties to identify their interests and look to a point of resolution.

The centre encourages parties to seek their services in settling dispute as there is a well-trained panel of mediators in it. The centre offers training programs on mediation and there has been a great demand for training."

"We believe that if the message of mediation and interest based problem solving techniques are spread through training programs, that in itself, will be an incentive to look for mediation rather than taking the ardous route of taking an adversarial procedure to settle problems," the EFC chief said. "Our industrial relations in general continue to be adversarial due to historical and ideological reasons.

There are problems connected with trade unions and certain deep-seated perceptions on the part of employers.

But even within this adversarial system there are many success stories of healthy industrial relations in companies.

Things have been done with understanding through what I would call social dialogue. If there is any impasse, if one is to break that impasse, there should be a dialogue. We have done a lot to facilitate this dialogue - we are glad about it," Dasanayaka said.

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