Labour laws in Sri Lanka

by Asif Nazeer on 08-11-2011 in Doing Business

 

Labor laws in Sri Lanka
 
Today, there is a significant change in labor population of Sri Lanka. Starting from 1980 it is gradually shifting in the sectors like agriculture to manufacturing, self employment and service in private or public sectors. Nowadays, in Sri Lanka the labor force is growing at tremendous pace due to the effective education campaigning of the Sri Lankan govt. In early census it was observed that the major workforce of Sri Lanka was involved in fishing, mining and agriculture. But the things are changing now; people are looking to get jobs in IT sector and other sectors due to the solid economic growth of the country.
 
If we compare Sri Lankan workforce from 1953 to 1981, then we will get some interesting data. In 1953 the percentage of workforce involved in agriculture was around 52, which came down to 43% in 1981. In manufacturing sector the percentage of 1953 was only 10 percent. In 1981 it has gone up to 15.7%. Transport, storage, and communications increased from 3.5 percent to 4.8 percent over the same period. All these figures are suggesting a significant shift of work force of Sri Lanka. Apart from the agriculture the other sector are moving rapidly. Free market economic policy also helped to improve these data.
 
After the independence, there was a significant demographic and educational change is observed. The rapid growth in population of the country also increased the level of work force in other sectors like- manufacturing, tourism etc. Due to the high competition in the labor forces, Sri Lankan govt. decided to cut down the service age in the public sector to save the country from the curse of unemployment. To some extent this strategy worked. 
 
Now, we will deeply concentrate on the govt. labor policies of Sri Lanka. During nineteenth century, labor legislation mainly dealt with the agricultural sectors and the general labor laws were passed in the closing of years of the colonial rule. In 1941 the government enacted the Wages Boards Ordinance, the first comprehensive piece of legislation regarding the payment of wages, the regulation of working hours, and sick and annual leave; the ordinance also empowered the government to establish wages boards for any trade. The board appoints equal number of labors from all different large sectors, suggested by the employers and workers. Ordinances of 1942 and 1946 enacts that all manufacturing units should have minimum standards for health and safety for the organization. The law also provides the commissioner the right to send inspection team in any manufacturing plants.
 
The Maternity Benefits Ordinance, as amended in 1957, entitled a woman who worked in a factory, mine, or estate to full compensation for a period of two weeks before her confinement and for six weeks afterward. It is to be noted that the employee must have worked for the employers to be provided with such benefits. The Employees Provident Fund, established in 1958, provided a national retirement program for the private sector. The Employees Provident Fund, established in 1958, to benefit all the retired persons with financial back up. According to this act, employer must contribute 6 percent and employee must contribute at least 4 percent to the provident fund. Participation in this plan is observed very high. In public sector employee’s retired life is secured by the pension plans.
 
 
It was seen that legislation to protect the health and welfare of the labors was very much wide-ranging, but the practical implementation was a bit narrow at the initial stage. Now let’s discuss about the working condition. Working condition varied according to the type and size of the employment. The Factories Ordinance of 1942 established guidelines for industrial safety and sanitation and made each factory liable to government inspection. In 1980 strike and boycotts were taken place in Sri Lanka due to the inadequate meals in the factories. The factories Ordinance prohibited work for women between 9 PM to 6 AM. A 1957 law, for example limited working time for women to nine hours. Other laws prohibited women and children from working time underground, in mines, for example.
 
Unemployment was a problem in Sri Lanka during 1960’s. After the economic liberalization unemployment came down to 12 percent. According to official data, in 1987 the labor force consisted of around 6.2 million persons, of whom 5.4 million, or 87 percent, were gainfully employed, but these figures understated unemployment, which the Ministry of Finance estimated at 18 percent in late 1987. Around 1980 tourism become a huge prospect in Sri Lanka. It also helped to overcome the problem of unemployment. In 1987 observers estimated that 100,000 Sri Lankans worked and lived in the Middle East--particularly in the small oil-rich states of the Arabian Peninsula, where wages for comparable work were much higher than in Sri Lanka.
 
These are the general overview on the labor legislation of Sri Lanka. Hope you enjoyed reading this article.
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