Connect with us

Features

Wage increase makes mockery of collective bargaining

Published

on

by J. A. A. S. Ranasinghe

Productivity Specialist and Management Consultant.

This addendum to the topic is based on the incisive analysis of the plantation wages: Collective Bargaining or otherwise by Gotabaya Dasanayaka (GD) in The Island of 01st March 2021. The eminent labour legislation specialist, former Director General of the Employers Federation of Ceylon (EFC) has most undoubtedly hit the nail on the head drawing the attention of the readers to more sensitive aspects revolving round the importance of the time-tested collective bargaining systems prevailed in the determination of wages of the plantation workers for over three decades in particular as well as to the possible economic consequences, the new wage structure gives rise to the survival of the plantation industry in general.

 

Industrial Dispute Act No 43 of 1950 (ID Act)

The ID Act quite explicitly deals with the functions of the Commissioner of Labour (CL) under part 11 of the Act which says when an industrial dispute arose, it shall be the duty of the CL to refer such disputes for settlement by conciliation or by arbitration or by an Industrial Court including that of a District Court. It should be noted here that neither the Minister in charge of Labour nor the Commissioner of Labour (CL) nor the Deputy Commissioner of Labour (Industrial Relations) nor any other authorized person seems to have the gumption to abide by aforesaid conciliatory methods as envisaged in the ID Act, when the collective bargaining process of the plantation workers came to a deadlock a few weeks ago.

The most sensible course of action what the Minister or the CL should have done was to have recourse the dispute in question to a compulsory arbitration as per the provisions of the ID Act for a just and equitable award as articulated by GD. The reluctance on the part of the Minister to refer this sensitive issue to the compulsory arbitration is a moot point. Probably, he may have thought that the decision of the arbitration would not be favourable to the trade union demands. On the other hand, he may have thought that the reference to the arbitration is a time-consuming affair and the trade unions agitation is too severe to be ignored. However, it is crystal clear that the Minister had totally condemned the gist of the ID Act in toto by referring it to the Wages Board by circumventing all the bottlenecks in the pipeline for the first time in the history by creating a new precedent. It must be stated here that nowhere in the ID Act that an unfettered latitude is granted for the Minister to refer this labour dispute to the Wages Board. It is highly questionable as to why the Regional Plantation Companies did not challenge the Labour Minister’s arbitrary decision by way of a writ before the court and finally bore the brunt of the unconscious increase of the wages, which has far-reaching ramifications over the plantation industry and the smallholder sector.

 

Wages Board Ordinance (WBO)

Under section 8 of the WBO, the minister is empowered to establish Wages Board (WB) for any trade. It is a tripartite constituency representing the officials of the Labour Department, employers and employees of a particular trade. At present, there are 45 wages boards for different trades including that of plantation, agriculture and manufacturing industries and they receive minimum wages protection under this WBO. As regards the plantation sector, employees of rubber plantations 25 acres and above, coconut plantations 10 acres and above and tea plantations-no limit on acreage, are protected by the WBO. Though WB has been in existence for the last seven decades, the collective bargaining process initiated by the ID Act and the WBO functioned in tandem without interfering in each other’s territory.

As a matter of fact, collective bargaining process is more instrumental among the more organized sector where collective agreements are in force. By and large, the wage structure in the organized sector where collective bargaining operate is far superior to that of the establishments covered by the Wages Board. The minimum wages paid to employees covered by the WBO are conspicuously lower than the wages paid under the collective agreements. The Wages Boards are considered to be subsistence level wages as referred to above and in sectors where the trade unions are virtually non-existent. Hence, it is unprecedented that a matter which is subject to collective agreement was referred to wages board by the Minister of Labour in the annals of the labour movement of this country without realizing the repercussions that could arise. It is true that the plantation workers were covered by a Collective Agreement and periodically it has been renewed after collective bargaining. In a matter covered by Collective Agreement, if any dispute arose, the matter should have been referred to compulsory arbitration under the ID Act. However, in this instance, it is surprising that the issue was referred to the relevant wages board at the instance of the Minister of Labour.

Wage Impact on the industry

Mr. GD in his well-articulated article made a comparison between the wage structure of the different Wages Board in selected trades and the proposed daily minimum wage for the Tea and Rubber Growing and Manufacturing Trades and pointed out the huge disparity, if the proposed daily minimum wage of Rs. 1,000/= is paid across the board. Both the tea and rubber sectors are owned 70% by the smallholders, definitely the proposed increase will have a deleterious impact on the productivity of the tea and rubber sectors and the smallholders can ill-afford to bear the increased wage at this juncture. Right at the moment, a large number of rubber small holders in Kegalle, Kalutara and Ratnapura districts have abandoned their plots in the face of the exsisting wages and the dearth of labour. Right at the moment, Regional Plantation Companies (RPCs) make a desperate attempt to contain the high cost of production and there will be an inevitable impact-detrimental to the well-being of the industry, in the face of the enhanced wages approved by the Wages Board.

GD in his article had incorporated the minimum wages applicable to selected eight trades to pinpoint the irrational disparity of wages and I would go further to highlight the inadvisability of enhancing wages through the wages board mechanism.

The Collective Bargaining process stipulated in the ID Act provided a reasonable effective mechanism to maintain healthy industrial relations and a healthy industrial peace and harmony for the last 30 years. Moreover, the sustainability of the industry and the commercial viability on the basis of labour productivity, profitability and the efficiency of operations were some of the key prime-movers at the collective bargaining table, which both parties took cognizance of seriously. Every Dick, Tom and Harry knew quite well that the government made a solemn pledge at the Presidential Election as well as the last Parliamentary election that the daily wage of the estate workers would be enhanced to Rs. 1,000/= as per the election manifesto (Chapter 10 of the Vistas of Prosperity and Splendour). It is this pledge that the government had to initiate at the last Annual Budget at the instigation of the labour trade unions in the estate sector.

Obviously, there are many obstacles both statutory and bureaucratic in the implementation of this pledge. The Commissioner of Labour (CL) who was well versed in the sustainability of the estate sector and the procedural initiatives involved as per the ID Act and Collective Bargaining Process was seen as a stumbling block and he had to be booted out by installing a provincial bureaucratic who was absolutely unaware of the commercial viability of the plantation sector, which is associated with many operational and financial ills.

It must be stated here in fairness to the former Commissioners of Labour in the calibre of Mr. G.Weerakoon and Mr. Mahinda Madihahewa who had served the Labour Department with distinction adroitly and they did not succumb to the political pressure and had the capacity to appraise both sides when critical labour issues arose in fairness to both parties but they relied heavily on the sustainability of the industry on a more priority basis in solving labour disputes. The Government realized that the collective bargaining process outlined in the ID Act was an impediment to the smooth implementation of the proposed wage structure. So, the government insidiously shifted from the time-tested mechanism of collective bargaining process to Wages Board to expedite the process. According to the grapevine circulating in the Labour Secretariat that three strong party acolytes were brought in as nominated members of the Minister to the Wages Board in order to ensure the easy passage of wage increment of Rs. 1,000/=.

Future Trends of the Labour Movement.

From the pattern of the signals hitherto displayed by the government that came into power in 2019, it appears that every vibrant sector would be confronted with insurmountable labour agitations. Firstly, the industry has been agitating to do away with the obnoxious requirement of paying Rs, 200,000/= in case of terminations under the Employment of Termination Act. The employers pointed out over a decade of time that it was difficult to bring in foreign investment with such a legislation. The government did a U Turn by enhancing the payment of compensation to Rs. 400,000/= instead of scrapping this piece of legislation. Secondly, the amount of workmen compensation in the event of a death of an employee due to a fatal accident was increased almost double, placing more financial burden to the employers at the instigation of the trade unions. The third scenario was the manner in which it deviated from the time-tested collective bargaining mechanism and imposed unbearable financial constraints by way of enhanced wages to the employees of the plantation industry. The industry is unaware of any other ill-logical motives to be moved in the pipe-line against the well-being of the industry in the foreseeable future. What would happen if the rest of the Wages Boards request enhanced wages quoting the unprecedented mechanism adopted by the government and the resultant chaos would be inevitable. Unlike those days, the trade unions have become more aggressive with their political affiliations with the government and the civil society too have extended their support to trade unions to win over their demands, as can be seen from the Colombo Port ECT deal. There is obviously writing on the wall that the country would be inundated with heaps of labour unrest issues with the wrong signals given by the government.

 

Financial assistance to RPCs

It is factually correct that Regional Plantation Companies (RPCs) and smallholders were resisting the wage increase proposal on the ground that the financial resources do not permit them to incur this heavy expenditure. If this is the truth, nothing but the truth and the whole truth, the government has an inalienable duty to provide some financial assistance to RPCs by resorting to unorthodox avenues to alleviate its financial suffering even on short time basis. In this regard, Dr.Janaka Ratnasiri, a regular writer to The Island newspaper has made a pragmatic proposal in his feature dated 16th February 2021. He contends that export of tea is subject to a CESS levied at Rs. 10/- per Kg which works out to LKR 2.9 billion. Out of this, Rs. One billion is collected as tea promotion levy by Sri Lanka Tea Board from the exporters. Another 1% or 2.4 billion has to be paid to Brokers for conducting the auctions and carrying out quality control checks and certifying on samples received. These brokers comprising 8 Companies deserve it because they ensure that quality tea is exported. After paying taxes, the exporters are still left with a profit marginof about 65 billion annually. Dr. Janaka Ratnasiri argues that would be more prudent to share this profit among this plantation workers. Otherwise, it could be proportionately be distributed among the RPCs so that heavy financial implications arising out of this wage commitment could be mitigated.

 

Crises in the plantation industry

Consequent to the announcement of the new wage increase given to the plantation employees, there has not been any knee-jerk reaction from the plantation companies for the last one week. Their studious silence will have to be observed with much circumspection. Both the tea and rubber industries are on the verge of collapse owing to heavy financial implications and it is not clear as to how they absorb this unforeseen expenditure. It is certain that the Regional Plantation Companies (RPCs) would continue to incur heavy losses with this wage commitment. It could be reasonably assumed that the production and its quality will be the immediate casualties and this trend, if any, does not auger well for the sustainability of the plantation industry.

It would have been the ideal opportunity for the Labour Ministry to harp on productivity-based wage model as a bargaining tool, which the ministry has pathetically failed to convince, given the sizable salary package. The word “productivity” is anathema to trade unions in Sri Lanka including that of the plantation trade unions. The ramifications arising out of this wage increase are far-reaching in character and it is advisable for the Employers Federation of Ceylon to educate the members of its broader ill effects by way of a public seminar and convey its dissatisfaction to the government.

The biggest casualty in the aforesaid wage episode is the gradual demise of the collective bargaining process that led to Collective Agreements and plantation companies will have to think twice whether there is any rationale in entering into Collective Agreements by giving enhanced wages and other perks, if ill-conceived mechanisms are adopted by the government to give enhanced wages through Wages Boards by ignoring time-tested collective bargaining mechanism.

 

(The views contained in this article are the professional views of the writer and he could be contacted on athularanasinghe88@yahoo.com)



Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Features

Ranking public services with AI — A roadmap to reviving institutions like SriLankan Airlines

Published

on

Efficacy measures an organisation’s capacity to achieve its mission and intended outcomes under planned or optimal conditions. It differs from efficiency, which focuses on achieving objectives with minimal resources, and effectiveness, which evaluates results in real-world conditions. Today, modern AI tools, using publicly available data, enable objective assessment of the efficacy of Sri Lanka’s government institutions.

Among key public bodies, the Supreme Court of Sri Lanka emerges as the most efficacious, outperforming the Department of Inland Revenue, Sri Lanka Customs, the Election Commission, and Parliament. In the financial and regulatory sector, the Central Bank of Sri Lanka (CBSL) ranks highest, ahead of the Securities and Exchange Commission, the Public Utilities Commission, the Telecommunications Regulatory Commission, the Insurance Regulatory Commission, and the Sri Lanka Standards Institution.

Among state-owned enterprises, the Sri Lanka Ports Authority (SLPA) leads in efficacy, followed by Bank of Ceylon and People’s Bank. Other institutions assessed included the State Pharmaceuticals Corporation, the National Water Supply and Drainage Board, the Ceylon Electricity Board, the Ceylon Petroleum Corporation, and the Sri Lanka Transport Board. At the lower end of the spectrum were Lanka Sathosa and Sri Lankan Airlines, highlighting a critical challenge for the national economy.

Sri Lankan Airlines, consistently ranked at the bottom, has long been a financial drain. Despite successive governments’ reform attempts, sustainable solutions remain elusive.

Globally, the most profitable airlines operate as highly integrated, technology-enabled ecosystems rather than as fragmented departments. Operations, finance, fleet management, route planning, engineering, marketing, and customer service are closely coordinated, sharing real-time data to maximise efficiency, safety, and profitability.

The challenge for Sri Lankan Airlines is structural. Its operations are fragmented, overly hierarchical, and poorly aligned. Simply replacing the CEO or senior leadership will not address these deep-seated weaknesses. What the airline needs is a cohesive, integrated organisational ecosystem that leverages technology for cross-functional planning and real-time decision-making.

The government must urgently consider restructuring Sri Lankan Airlines to encourage:

=Joint planning across operational divisions

=Data-driven, evidence-based decision-making

=Continuous cross-functional consultation

=Collaborative strategic decisions on route rationalisation, fleet renewal, partnerships, and cost management, rather than exclusive top-down mandates

Sustainable reform requires systemic change. Without modernised organisational structures, stronger accountability, and aligned incentives across divisions, financial recovery will remain out of reach. An integrated, performance-oriented model offers the most realistic path to operational efficiency and long-term viability.

Reforming loss-making institutions like Sri Lankan Airlines is not merely a matter of leadership change — it is a structural overhaul essential to ensuring these entities contribute productively to the national economy rather than remain perpetual burdens.

By Chula Goonasekera – Citizen Analyst

Continue Reading

Features

Why Pi Day?

Published

on

International Day of Mathematics falls tomorrow

The approximate value of Pi (π) is 3.14 in mathematics. Therefore, the day 14 March is celebrated as the Pi Day. In 2019, UNESCO proclaimed 14 March as the International Day of Mathematics.

Ancient Babylonians and Egyptians figured out that the circumference of a circle is slightly more than three times its diameter. But they could not come up with an exact value for this ratio although they knew that it is a constant. This constant was later named as π which is a letter in the Greek alphabet.

Archimedes

It was the Greek mathematician Archimedes (250 BC) who was able to find an upper bound and a lower bound for this constant. He drew a circle of diameter one unit and drew hexagons inside and outside the circle such that the sides of each hexagon touch the sides of the circle. In mathematics the circle passing through all vertices of a polygon is called a ‘circumcircle’ and the largest circle that fits inside a polygon tangent to all its sides is called an ‘incircle’. The total length of the smaller hexagon then becomes the lower bound of π and the length of the hexagon outside the circle is the upper bound. He realised that by increasing the number of sides of the polygon can make the bounds get closer to the value of Pi and increased the number of sides to 12,24,48 and 60. He argued that by increasing the number of sides will ultimately result in obtaining the original circle, thereby laying the foundation for the theory of limits. He ended up with the lower bound as 22/7 and the upper bound 223/71. He could not continue his research as his hometown Syracuse was invaded by Romans and was killed by one of the soldiers. His last words were ‘do not disturb my circles’, perhaps a reference to his continuing efforts to find the value of π to a greater accuracy.

Archimedes can be considered as the father of geometry. His contributions revolutionised geometry and his methods anticipated integral calculus. He invented the pulley and the hydraulic screw for drawing water from a well. He also discovered the law of hydrostatics. He formulated the law of levers which states that a smaller weight placed farther from a pivot can balance a much heavier weight closer to it. He famously said “Give me a lever long enough and a place to stand and I will move the earth”.

Mathematicians have found many expressions for π as a sum of infinite series that converge to its value. One such famous series is the Leibniz Series found in 1674 by the German mathematician Gottfried Leibniz, which is given below.

π = 4 ( 1 – 1/3 + 1/5 – 1/7 + 1/9 – ………….)

The Indian mathematical genius Ramanujan came up with a magnificent formula in 1910. The short form of the formula is as follows.

π = 9801/(1103 √8)

For practical applications an approximation is sufficient. Even NASA uses only the approximation 3.141592653589793 for its interplanetary navigation calculations.

It is not just an interesting and curious number. It is used for calculations in navigation, encryption, space exploration, video game development and even in medicine. As π is fundamental to spherical geometry, it is at the heart of positioning systems in GPS navigations. It also contributes significantly to cybersecurity. As it is an irrational number it is an excellent foundation for generating randomness required in encryption and securing communications. In the medical field, it helps to calculate blood flow rates and pressure differentials. In diagnostic tools such as CT scans and MRI, pi is an important component in mathematical algorithms and signal processing techniques.

This elegant, never-ending number demonstrates how mathematics transforms into practical applications that shape our world. The possibilities of what it can do are infinite as the number itself. It has become a symbol of beauty and complexity in mathematics. “It matters little who first arrives at an idea, rather what is significant is how far that idea can go.” said Sophie Germain.

Mathematics fans are intrigued by this irrational number and attempt to calculate it as far as they can. In March 2022, Emma Haruka Iwao of Japan calculated it to 100 trillion decimal places in Google Cloud. It had taken 157 days. The Guinness World Record for reciting the number from memory is held by Rajveer Meena of India for 70000 decimal places over 10 hours.

Happy Pi Day!

The author is a senior examiner of the International Baccalaureate in the UK and an educational consultant at the Overseas School of Colombo.

by R N A de Silva

Continue Reading

Features

Sheer rise of Realpolitik making the world see the brink

Published

on

A combined US-Israel attack on Iran.(BBC)

The recent humanly costly torpedoing of an Iranian naval vessel in Sri Lanka’s Exclusive Economic Zone by a US submarine has raised a number of issues of great importance to international political discourse and law that call for elucidation. It is best that enlightened commentary is brought to bear in such discussions because at present misleading and uninformed speculation on questions arising from the incident are being aired by particularly jingoistic politicians of Sri Lanka’s South which could prove deleterious.

As matters stand, there seems to be no credible evidence that the Indian state was aware of the impending torpedoing of the Iranian vessel but these acerbic-tongued politicians of Sri Lanka’s South would have the local public believe that the tragedy was triggered with India’s connivance. Likewise, India is accused of ‘embroiling’ Sri Lanka in the incident on account of seemingly having prior knowledge of it and not warning Sri Lanka about the impending disaster.

It is plain that a process is once again afoot to raise anti-India hysteria in Sri Lanka. An obligation is cast on the Sri Lankan government to ensure that incendiary speculation of the above kind is defeated and India-Sri Lanka relations are prevented from being in any way harmed. Proactive measures are needed by the Sri Lankan government and well meaning quarters to ensure that public discourse in such matters have a factual and rational basis. ‘Knowledge gaps’ could prove hazardous.

Meanwhile, there could be no doubt that Sri Lanka’s sovereignty was violated by the US because the sinking of the Iranian vessel took place in Sri Lanka’s Exclusive Economic Zone. While there is no international decrying of the incident, and this is to be regretted, Sri Lanka’s helplessness and small player status would enable the US to ‘get away with it’.

Could anything be done by the international community to hold the US to account over the act of lawlessness in question? None is the answer at present. This is because in the current ‘Global Disorder’ major powers could commit the gravest international irregularities with impunity. As the threadbare cliché declares, ‘Might is Right’….. or so it seems.

Unfortunately, the UN could only merely verbally denounce any violations of International Law by the world’s foremost powers. It cannot use countervailing force against violators of the law, for example, on account of the divided nature of the UN Security Council, whose permanent members have shown incapability of seeing eye-to-eye on grave matters relating to International Law and order over the decades.

The foregoing considerations could force the conclusion on uncritical sections that Political Realism or Realpolitik has won out in the end. A basic premise of the school of thought known as Political Realism is that power or force wielded by states and international actors determine the shape, direction and substance of international relations. This school stands in marked contrast to political idealists who essentially proclaim that moral norms and values determine the nature of local and international politics.

While, British political scientist Thomas Hobbes, for instance, was a proponent of Political Realism, political idealism has its roots in the teachings of Socrates, Plato and latterly Friedrich Hegel of Germany, to name just few such notables.

On the face of it, therefore, there is no getting way from the conclusion that coercive force is the deciding factor in international politics. If this were not so, US President Donald Trump in collaboration with Israeli Rightist Premier Benjamin Natanyahu could not have wielded the ‘big stick’, so to speak, on Iran, killed its Supreme Head of State, terrorized the Iranian public and gone ‘scot-free’. That is, currently, the US’ impunity seems to be limitless.

Moreover, the evidence is that the Western bloc is reuniting in the face of Iran’s threats to stymie the flow of oil from West Asia to the rest of the world. The recent G7 summit witnessed a coming together of the foremost powers of the global North to ensure that the West does not suffer grave negative consequences from any future blocking of western oil supplies.

Meanwhile, Israel is having a ‘free run’ of the Middle East, so to speak, picking out perceived adversarial powers, such as Lebanon, and militarily neutralizing them; once again with impunity. On the other hand, Iran has been bringing under assault, with no questions asked, Gulf states that are seen as allying with the US and Israel. West Asia is facing a compounded crisis and International Law seems to be helplessly silent.

Wittingly or unwittingly, matters at the heart of International Law and peace are being obfuscated by some pro-Trump administration commentators meanwhile. For example, retired US Navy Captain Brent Sadler has cited Article 51 of the UN Charter, which provides for the right to self or collective self-defence of UN member states in the face of armed attacks, as justifying the US sinking of the Iranian vessel (See page 2 of The Island of March 10, 2026). But the Article makes it clear that such measures could be resorted to by UN members only ‘ if an armed attack occurs’ against them and under no other circumstances. But no such thing happened in the incident in question and the US acted under a sheer threat perception.

Clearly, the US has violated the Article through its action and has once again demonstrated its tendency to arbitrarily use military might. The general drift of Sadler’s thinking is that in the face of pressing national priorities, obligations of a state under International Law could be side-stepped. This is a sure recipe for international anarchy because in such a policy environment states could pursue their national interests, irrespective of their merits, disregarding in the process their obligations towards the international community.

Moreover, Article 51 repeatedly reiterates the authority of the UN Security Council and the obligation of those states that act in self-defence to report to the Council and be guided by it. Sadler, therefore, could be said to have cited the Article very selectively, whereas, right along member states’ commitments to the UNSC are stressed.

However, it is beyond doubt that international anarchy has strengthened its grip over the world. While the US set destabilizing precedents after the crumbling of the Cold War that paved the way for the current anarchic situation, Russia further aggravated these degenerative trends through its invasion of Ukraine. Stepping back from anarchy has thus emerged as the prime challenge for the world community.

Continue Reading

Trending