Labour Market Reforms

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Labour Market Reforms Presentation to EFC Council
By Director General
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• Sri Lanka - Major Challenges
• Employment creation (productive
• employment)
• Increased incomes
• Compliance with International Labour
• Standards

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Employment Creation Requires Investment Increas
ed Income Requires enhanced productivity Compl
iance with I L S Requires fundamental legal
framework and implementation
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Investment and Productivity Requires efficient
labour market
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• 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

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

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2003 / 2004 Sri Lanka 57th out of 101 2002 /
2003 Sri Lanka 48th
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Sri Lanka Improving Rural and Urban Investment
climate (WB/ADB Report 2005) Urban Sector
constraints Electricity, Policy uncertainty,
Macro instability, Finance cost, Labour
Regulations
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• 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

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• Job Placement Services
• Accurate collection and dissemination of Labour
  Market Information
• Counselling Placement
• Jobsnet - Expansion

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• 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

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• Effective Speedy dispute settlement mechanisms
• Alternate dispute resolution procedures, eg
  Mediation

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

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• 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 (?)

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• 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

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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.
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Undue regulatory imposition on labour
costs TEWA No further increases in
superannuation/protection benefits No
legislated wage increases
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• Trade Union Concerns
• Freedom of Association and recognition of trade
  unions
• Right to collective bargaining
• Undue restrictions on the right to trade union
  action
• Protection of Worker Rights (Job Security)
• Unemployment insurance Vs. Flexibility in
  termination
• laws
• Consultation on socio economic issues (Social
  Dialogue)

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

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• 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