ECONOMYNEXT – Private sector representatives in the service and manufacturing industries highlighted the importance of labour reforms at a forum organized by The Shippers Academy of Colombo, the American Chamber of Commerce (AmCham) and The Joint Apparel Association Forum (JAAF).
The forum’s focus was on the need to prioritise Sri Lanka’s labour law reforms to develop competitive industries and services.
‘If we are to develop quickly, we need to generate USD 15 billion per annum. To do this, we need to attract FDIs,” advisor to the ministry of labour and foreign employment Shan Yahampath said.
A priority of ongoing labour reforms was to attract investments through high-skill job creation and spur entrepreneurship and innovation Yahampath said.
“Adopting efficient labor laws are pivotal to this, as we need to focus on job creation and understand the role SMEs play.”
The minister of labour and foreign employment has prepared a concept paper for the formulation of a new Employment Act, in consultation with trade unions, employers and relevant parties.
Sri Lanka’s Cabinet this week said it had advised the Legal Draftsman to prepare a bill based on the concept paper, and the recommendations from a tripartite committee representing employers, employees and the government, functioning under the prime minister’s office.
The Ministry has given a seven-week window of consultation where any individual, association or union could make representation of issues in the current law that needed addressing.
“Sri Lanka cannot be a competitive business hub without adhering to current international labour practices,” CEO of the Shippers Academy Rohan Masukorala said at the forum.
The 8-hour work week initiated in 1926 is not conducive to the modern world, Masukorala added.
Labor reforms should formalize administrative relaxations on the flexibility over a five-day week, which will encourage more people, especially women, to enter the workforce, Secretary General of JAAF Yohan Lawrence said at the same event.
“Improving flexibility in terms of work hours is advantageous not only for employees but also employers,” Lawrence pointed out.
Lawrence added that under the current law, termination and the cost of restructuring were detrimental to companies.
“If a manufacturing plant is located in a region that doesn’t make the economies of scale worthwhile, the cost-effective ability to relocate and restructure is essential. The law should allow this.”
President of AmCham Shirendra Lawrence pointed out the potential of encouraging the 51% female population to enter the labour force via more flexible labour laws, as an impetus to attract and retain investors.
“The textile, security, catering and other sectors are governed by a separate set of laws. Unifying this will certainly be more attractive to investors,” he said.
The free trade zones collective also expressed concerns about existing labour laws, claiming that the current legal framework does not prepare workers to enter or stay competitive in the changing world of work.
“The number of jobs that will be created in ten years’ time is unknown to us. Sri Lanka must prepare its workforce for that future while keeping investments in mind,” Chairman of the Free Trade Zone Manufacturers Association Dhammika Fernando said.
“The Board of Investment was given an FDI target of USD 1.5 billion to be met for this year. However, it’s October and the country is struggling to bring in USD 750 million.
“Regional peers like Bangladesh have already gained the infusion of USD 2 billion and even countries like Myanmar has attracted USD one billion,” Fernando said. (Colombo/Nov3/2023)
