Age of new employment

The Employers’ Federation of Ceylon (EFC) has come up with an interesting suggestion – the formulation of a new job contract in the new age of employment and jobs. The idea makes sense particularly since Sri Lanka is moving rapidly towards the age of technology.

Furthermore new developments in the Nano technological field at the Nano park outside Colombo and before that – at the nano research lab at the Biyagama Investment zone - positions Sri Lanka at an exciting stage in the development highway.

The new working contract argument of the EFC is based on the premise that across the world the growth of jobs is linked to more flexible working hours and a more flexible wage policy.

Employers have been demanding for awhile that labour policies should be linked to productivity, cost of production and profit.

Labour unions are in favour of a working environment in line with global development trends but argue, reasonably in fact, that Sri Lanka is still not ready for a flexible, hireand-fire (as they call it) model.

Sri Lanka needs to move up the ladder of development and a flexible job contract seems the way to go, if not for many issues that need to be addressed first.

EFC Director General Ravi Peiris, in an article published today on the need for a new employment contract, says such a measure is needed as the current framework is not condusive for both employers and workers today. Arising out a recent symposium that discussed these issues, he says a ‘new age job contract’ is what young graduate job aspirants are also looking for.

The recent Commonwealth Business Forum (CBF) which saw many contacts being made between local and foreign businesspersons, some of which could lead to positive investments, could be the springboard for a new investment era. If so, foreign investors would be looking for labour policies that are favourable in terms of exit policies, repatriation of profits and competitive cost of production rates.

Labour unions on the other hand frown on such policies particularly because a percentage of the investors, based on the experience at the free trade zones, are fly-by-night operators who have (overnight) closed shop for reasons linked to a labour dispute or the enterprise being uneconomical.

The debate on flexi hours and young graduates ready for a more progressive contract rather than one that – in the old age – is based on loyalty, commitment to the workplace and your boss, and working in an office environment, doesn’t however go in tandem with the real situation.

The real situation is outside Colombo, in factories, and sweat- shop environments which happens across Sri Lanka. The needs of the large segment of small and medium scale industries and particularly the export industry, a prime driver of Sri Lanka’s economy, should also be taken into account.

The real issue confronting Sri Lanka in being competitive with the rest of the world is the cost of production. Wages are high and energy costs greater than regional competitors. Wages are high primarily due to inflation and the high cost of living, not because of worker demands, while energy costs is due to increasing use of costly imported fuel, power stations as hydropower is insufficient to meet the demand. Until the country develops, rapidly in fact, the use of natural resources like wind power and solar power, the cost of energy will continue to be an issue in growth and development.

The clash between employers and workers is a perennial issue but there has been encouraging signs of a ‘working-together’ environment at the National Labour Advisory Council (NLAC). On some issues, rare in the past, employers and workers (through their representatives-the unions) have seen eye-to- eye and that’s an encouraging sign.

The biggest conflict however has been the demand for worker rights and the establishment of trade unions in the workplaces. Like it or not, worker rights and a ‘friendly’ workplace environment are becoming a sine qua non for development. More and more companies particularly in the western world are driven by consumer interests that centre on workers being provided a decent wage and other benefits. Fair trade and ‘garments without guilt’ are some of the fancy terms now used to promote fair and equitable trade. Consumers are increasingly looking for products that reflect a friendly workplace and global companies are catering to this need by ensuring that their suppliers meet these standards. Worker rights are also a fundamental prerequisite for export industries exporting into the US and Europe among other countries.

But the working class also needs to be practical or they could lose their jobs as costs becoming unbearable for employers. On both sides of the coin (employers and workers), there are issues that need to be understood by the other side. If costs become unbearable and a business uneconomical (not because the directors were ripping off the profits), the business inevitably must close. On the other hand, businesses must understand that workers are people, with real families and rights: they cannot be dumped as and when required. That is why the demand for labour rights and freedom of expression in the workplace is increasing. And too much of the hire-and-fire regime is happening not because businesses have been burdened by external costs, making it unworkable to continue, but due to directors making off with huge pay packets and side benefits, and profits not ploughed back into the business. The real CSR begins the way you run your business, in creating a business model that ensures a comfortable, committed and dignified workplace first; not in the handouts, and brand-building CSR activity that often takes place.

So how does one navigate a new employment order through these turbulent waters? The need is there but how? In the budget on Thursday, the President said he will appoint a Pay Commission to look into a new wage structure for the public sector based on demands for a national wage policy, which has been proposed by unions. Whether this could be packaged into the new job contract that employers are seeking remains to be seen.

Trade unions are often accused of sticking to sometimes, unrealistic demands, because they want to retain their ‘kingdoms’ of power and without that they are nothing. To some extent this is true (not however in the case of dedicated union workers). However the reality is that without unions, workers are often exploited.

Employers and worker representatives need to rise above stated positions and develop a working model that suits both sides and works in tandem with Sri Lanka’s development path. A consultative process perhaps facilitated by the International Labour Organisation (ILO) to come up with a compromise working model could be a way forward.