Labour Market Reforms Presentation to EFC Council By Director General

Sri Lanka - Major Challenges :  Employment creation (productive employment)  Increased incomes  Compliance with International Labour Standards

Employment Creation : Requires Investment Increased Income : Requires enhanced productivity Compliance with I L S : Requires fundamental legal framework and implementation

Investment and Productivity : Requires efficient labour market

Some Key Features in an Efficient Labour Market  Employable Workforce  Job Placement Services  Facilitatory Industrial Relations system including efficient dispute settlement mechanisms  Rational / Streamlined Terms & Conditions of employment  Streamlined termination procedures  Unemployment protection  No undue regulatory imposition on labour costs  Flexibility

World Economic Forum The Global Competitiveness Report 2003/2004 The Business Competitiveness Index Criteria : 1.Sophistication of Company operations and strategy 2.The quality of the national business environment

2003 / 2004 Sri Lanka – 57th out of / 2003 Sri Lanka – 48th

Sri Lanka : Improving Rural and Urban Investment climate (WB/ADB Report – 2005) Urban Sector constraints : Electricity, Policy uncertainty, Macro instability, Finance cost, Labour Regulations

Employable Workforce  Rationalisation of Secondary, Tertiary Educational Policies / Strategies  Greater interaction between private sector and policy makers  Greater emphasis on identified areas vocational education / skills development  Special focus on foreign employment opportunities  Development of Entrepreneurial skills for self employment

Job Placement Services  Accurate collection and dissemination of Labour Market Information  Counselling & Placement  “Jobsnet” - Expansion

Facilitatory Industrial Relations System  Currently, system is adversarial  System needs to facilitate industrial harmony for productivity and competitiveness at enterprise & National Level  Develop enterprise based workplace cooperation mechanisms  Focus on IR culture than Legal Framework

Effective & Speedy dispute settlement mechanisms Effective & Speedy dispute settlement mechanisms Alternate dispute resolution procedures, eg; Mediation Alternate dispute resolution procedures, eg; Mediation

Industrial Relations : Legislative Reforms Focus on, a)Reciprocal obligations between employers and trade unions E.g: Trade Union recognition Collective bargaining Notice of strike / lock out Strike Ballot ?

Rational terms and conditions of employment Streamline working hours / weekly holidays for possible uniform application for uninterrupted production/services Review of holidays Streamline wage fixation mechanisms Restructure Wages Boards - National Wages Council (?)

Unemployment Protection  Matter for social concern  Need for balance between flexibility in termination laws and unemployment protection  National unemployment insurance scheme  Remove / Minimize burden from individual enterprises Role of ETF

Streamline Termination procedures TEWA remains a major issue Impact on employment creation / atypical forms of employment Current legislation needs to be reviewed for greater flexibility Labour Tribunals : Review the right to the relief of reinstatement.

Undue regulatory imposition on labour costs TEWA No further increases in superannuation/protection benefits No legislated wage increases

Trade Union Concerns 1)Freedom of Association and recognition of trade unions 2)Right to collective bargaining 3)Undue restrictions on the right to trade union action 4)Protection of Worker Rights (Job Security) 5)Unemployment insurance Vs. Flexibility in termination laws 6)Consultation on socio economic issues (Social Dialogue)

Political Leadership for change ?Political Leadership for change ? Bipartite Initiative for Change ?Bipartite Initiative for Change ?

Consultation (Dialogue) at National Level  National representative Body (Tripartite)  Efficient Secretariat : Research, Policy papers etc  Identified common objectives  Identified scope of activities / Responsibilities  Form Debating Forum to Constructive Consultation and meaningful outcome