'Country's labour laws need overhaul'

Ramani Kangaraarachchi

The labour regulations in the country needs an overhaul, in line with the changes that are taking place in the world of work and business, EFC Director General Ravi Peiris said at a media briefing to launch the survey report, conducted by the Employers Federation of Ceylon (EFC) with the assistance of International Labour Organization (ILO) on 'Impact of labour laws' on employment generation in Sri Lanka last week at Taj Samudra Hotel.

He said over the years EFC members have complied with all labour laws and regulations in the country however, the EFC do not propose to have a 'hire and fire' framework which would be disastrous.

Peiris said the survey report has revealed that labour laws are a constraint on employment generation in Sri Lanka.

He said 91 percent of those who responded to the questionnaire distributed among 525 EFC members and 40 enterprises in the SME sector has said labour laws are a constraint in employment generation. Amongst them, 94 percent of the manufacturing sector respondents, 97 percent from the service sector and 96 percent from the plantation sector respondents have indicated that the Sri Lankan labour laws have a negative impact on employment generation.

Referring to survey findings with regard to Termination of Employment of Workmen (Special Provision)Act No45 of 1971 he said almost half the number of respondents ranked the Termination of Employment act as having the worst impact out of all the existing labour laws. Seventy five percent of the respondents which ranked this law as having the worst impact on employment generation were from the large scale enterprises employing more than 150 employees.

The highest number of respondents which indicated the Industrial Dispute Act had the worst impact on employment generation were from the manufacturing sector.

The Shop and Office Act also has been identified, especially in the manufacturing and service sectors as a piece of legislation having a negative impact on employment generation.

With regard to Week and Spread Over, 87 percent of the respondents have indicated the wages board ordinance negatively impacts on employment generation.

Meanwhile the majority of the respondents in the plantation industry have identified the Gratuity Act also as having the worst impact.

Peris said out of the 206 enterprises responded to the survey, during the 2010-2011 there have been 70,853 recruitments made by 193 enterprises. The majority of the recruitments have been made to the manufacturing sector, which has taken 67.27 percent of the total recruitments. The findings have also revealed that the inability to find skilled and qualified employees is also a significant reason for employers being unable to recruit new employees for new job positions.