No taxes on EPF withdrawals– John Seneviratne

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By 2017-08-17


Minister of Labour, Labour Relations and Sabaragamuwa Development, John (WDJ) Seneviratne, said yesterday the proposed taxes on EPF withdrawals will not be implemented following his informing Minister of Finance and Media Mangala Samaraweera that there was strong resistance.

He also stressed that the government will take a policy decision to relax laws on the Glyphosate usage in tea estates, which is even having implications on the plantation labour.

Here, he is in conversation with Ceylon Today.

? The EPF has been politicized very heavily due to the Central Bank, which manages its Fund portfolio, making wrong investments in the Colombo Stock Exchange, causing a loss of Rs 889 million according to Central Bank reports. What are the steps you hope to take in increasing Central Bank's accountability on the manner in which investments are made?

A: There is a monitoring Committee appointed by the Central Bank, which does the monitoring of these investments. But, much to our disappointment, there is no representative from either the Ministry of Labour or the Department of Labour in this so called Committee. We have told the government of the dire necessity of the need to have the Labour Ministry representation on that Committee to which the government has agreed. But, the delay is that the EPF Act has to be amended to have the Labour Ministry nominee on the Committee.

? The new Inland Revenue Bill has proposed that there should have been taxes on even EPF withdrawals, which are the lifetime savings of any employee, whether in government or in the private sector. Why do you support such an 'undemocratic' move?

A: No no. It did not happen that way. There was stiff resistance from the trade unions and the Employer representatives as well at the National Labour Advisory Committee (NLAC). I have intimated these sentiments to Finance Minister Mangala Samaraweera that the stakeholders are severely and vehemently opposed to it.

? The Central Bank Annual Report of 2016 in Chapter 4.3 states that there is a Budget Relief Allowance Act, which has increased the nominal wages but the real wages have declined. This has also declined the Parity Power which means that you can buy less goods. Your comments?

A: It is beyond the scope and the aim of the Labour Minister and the ministry to discuss or intervene in the Cost of Living and other matters. All the law has empowered us to do is to announce the salary increases. As to the sorting out of these disparities on the Cost of Living's relationships to the wages and earnings, is a matter for the Wages Boards to decide.

? Employers also say that this is a misnomer and miscalculation on Government policy. How do you see this?

A: What are the mistakes in government policy? It is the Wages Boards which have the legal provisions to consider all that when they sit periodically. They do that often.

? Shouldn't the government get involved only in the setting up of the minimum wages and not the private sector wages?

A: Whether it is the private sector or the Government sector, we have wanted the Rs 2,500 allowance which was given in the Budget, to be allocated to everybody. This is not on the basic salary but given as an allowance. So, that is how it stands and it is unfair to say that we get involved in the private sector salaries as well.

? There is a school of thought by the trade unions that your directives are not followed by the officials. Your thoughts?

A: That might be their conclusions! But all my directives are followed to the letter!

? Sri Lanka is advancing rapidly but it is also said that the archaic labour laws do not meet or match the demands of the current day. What would you do to arrest this trend?

A: Those are matters currently under negotiation. There have been Committees which have been appointed and there will be much headway in this direction. You and the media will get to know these changes very soon.

? There is a school of thought that there should be involvement of all stakeholders in the labour reforms; the government, trade unions, the private sector and civil society, and not a coterie of officials, one of whom is 75, and well past his shelf life! Don't you think that young blood should be infused?

A: You are right. There should be the involvement of all stakeholders, the government, the private sector, the trade unions and others such as the media. The reforms should be matched with the needs of the times. Sometimes, the needs too change. The trade union demands will also vary and the employers' demands are also likely to change with the passage of time. So, all these changes will also have to be matched with the passage of time. This is not easy. Labour laws should be conducive for investment. They must be acceptable and receptive. The reforms should also not be detrimental to the rights of the workers. On the other hand, they also must be participants of the development process of the country.

? It is understood that the labour reforms are not moving as fast as it ought to. How can civil society help?

A: I suppose there are the labour lawyers who are retired and some may be retired company officials who have been Human Resources Development Managers who are very conversant with the needs of the employees, the employers and other stakeholders.

They can make their recommendations to the Reforms Committee. Those inputs could be useful and also could be considered for implementation.

? There is rampant youth unemployment. What incentives would you give the private sector to arrest this problem by getting them to create opportunities?

A: The private sector has been very good paymasters over the years, which should be a very good incentive for youth unemployment. The Wages Board should also be able to address the aspect of salaries.

? On another aspect. Women employment is a mere 34%. They are restricted in such aspects as night time employment where in sharp contrast, in countries like India, this is liberalized. Your thoughts?

A: That is true. The 34% female employee representation is applicable only to the private sector. In the public sector, the women outweigh the men. In the private sector, the women are restricted.

However, women could be employed in the night, provided that they are offered sufficient protection as it happens in the western and the so called developing world. However, this is something that is under discussion and there are requirements for women to be employed in the night especially in industrial establishments where production schedules have to be met or needed to be stepped up.

? How would you advocate the shift system?

A: Well, the eight-hour working day has been accepted internationally. That has been cherished and protected. But, that does not mean that it can't be changed. I don't think that any fresh legislation is needed for that. That could be done by mutual consent.

? With the improvement of technology, how do you see people working from home where it would be ideal for working mothers etc?

A: Sadly, that is not a concept which has been developed in this country up to now. This has been developed in other countries. In India, there are certain pharmaceuticals which have been made as a domestic industry. I also visited South Korea which also has much highly advanced labour practices than Sri Lanka.

? What about flexible working hours? The Employers Federation has been lobbying for this for a long time. What is happening?

A: That is something that has to be decided by mutual consent between the employee and the employer. That freedom has been given.

? There is also a severe issue in relation to labour in the plantation areas and especially the up country tea estates. This is because they are refusing to go to work because of the Glyphosate ban. How do you see this?

A: That is true. This has been a collective decision which has been made. There have been recommendations which have been made to lift/relax the ban, and a decision would be taken by the Government soon. This ban has seen the industry having lots of bad side effects and we cannot let the plantations and workers suffer.

? Now on a personal note and on the flip side, how do you see this, being a tea smallholder yourself?

A: Well, the labour issues are mainly due to the Regional Plantation Companies and not so much the smallholders.

? Now the latest Collective Agreement between the Plantation Trade Unions and the Employers Federation, is tied down to productivity. Don't you think that this is nothing but fair in the light of Sri Lanka's costs of production of tea is the highest in the world with the highest wages?

A: That is true. Wages should be tied to productivity. That is a fair part of the bargain. The workers also should realize that they also need to keep to their part of the bargain.

? Now, on your other portfolio as Minister of Sabaragamuwa Development. Don't you think that this is the biggest issue in the Province with the Ratnapura District and the Kegalle District (which is represented by the UNP General Secretary and your Cabinet Colleague Kabir Hashim) very prone to floods?

A: That is true. Floods are one of the most devastating factors in the Sabaragamuwa Province. The tragedy is that there are no funds which have been allocated for this. We will ask for funds in the next Budget for this.

? There was a school of thought that the diversion of the Kalu Ganga would sort this much vexed issue. Your comments?

A: I hope that the government will take this issue seriously and before the next flood comes.

? Also another issue is illegal gem mining. How would you arrest the issue?

A: This is like fishing in the sea. It is very difficult to catch the people who are in gem mining. We have taken some precautions in that direction, but the problem goes unabated.

? How do you see the social changes in the plantation sector?

A: There seems to be a mass exodus from the plantations where people are leaving and they prefer to come to Colombo for employment in hotels, banks and others. This is a social issue and not an economic issue.

? How do you see the development of the road network in the Province?

A: The main roads are good and they are carpeted but some village roads have to be improved.

? There has been much talk about a Colombo-Ratnapura expressway but there seems to be no headway in this direction. Why?

A: Well, this has been on the drawing boards for the last four years. There have been agreements and discussions which have been going on. But the official construction has not begun yet.

? The latest is that one of the frontline trade unions leaders – General Secretary of the Free Trade General Employees Union Anton Marcus has reportedly resigned from the Labour Reforms Committee due to the funds coming from USAID. Why and how do you see this?

A: No comment.



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