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 Subject :Sustainable sourcing essential for sustainable enterprises.. 10-11-2017 00:06:45 
Joined: 14-02-2011 06:31:09
Posts: 43
Forum : Employers' Federation of Ceylon
Topic : Sustainable sourcing essential for sustainable enterprises

Sustainable sourcing practices and employee motivation are key factors in ensuring the sustainability of a business venture or enterprise, BASF South Asia Chairman and Managing Director Dr. Raman Ramachandran said yesterday.

Addressing the 2017 Symposium of the Employers’ Federation Ceylon, which kicked off yesterday at the Cinnamon Grand, as the keynote speaker, Ramachandran said: “At a time when resources are being fast depleted around the world, businesses must strive to find sustainable methods of sourcing their resources.”

This, he said would have a ripple effect where it would benefit both society and the environment.

“The youth of today are far more concerned about the environment and the impact humans have on it. These youth are and will be our consumers and we must adapt to meet the demands of the new generations.”

Ramachandran asserted that the Paris Agreement was crucial in combating global climate change and stressed that the private sector played a pivotal role in the transition to the use of renewable energy and reaching sustainable development goals.

He then noted that the conventional thinking of expecting an employee to report to work from 8.00 a.m. to 5.00 p.m. must be left behind.

“Today’s work environment is not that of the past 9 to 5 jobs and reporting to work every day is far less commonplace in today’s world. Around the world we now see that interviews are done over Skype and the internet and work is delegated via email or over the phone while the employee works from home,” he said, stressing that enterprises must learn to adapt to ensure higher productivity of employees.

He went on to note that employee motivation was significant in ensuring a loyal and productive workforce.

“If an employee feels that the company he or she works for is providing a meaningful service that employee would be far more motivated to work. There is a similar effect when employees are shown that they are appreciated by their employer.”

Skills Development and Vocational Training Minister Chandima Weerakkody, who was the Chief Guest at the event, said that the Government would be introducing an online testing mechanism for those who pass out of universities so that they could be ranked.

“In this manner, when a youth has completed his university education, he can take the online test and be graded and ranked. Based on that grading the employer can select and hire the candidate they like while the employee has the opportunity to upgrade their ranking by retaking and faring better in the online test.”

Additionally, the Minister said that a universally acceptable Skills Passport would soon be issued to employees.

“This will give employees the benefit of finding employment anywhere in the world. In this way the employer is intimately aware of the employee’s qualifications and skills.”

The symposium, themed ‘Sustainable Enterprises –creating value’, which will end today at the Cinnamon Grand, seeks to address four main elements that sustainable enterprises have incorporated, namely Governance, Managing Talents, Green Initiatives and Supply Chain, and how enterprises could further improve on them.

Pix by Indraratna Balasuriya


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 Subject :South Asian Forum of Employers (SAFE) 6th meeting - Minutes.. 07-03-2017 04:16:39 
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Forum : South Asian Forum of Employers (SAFE) 6th meeting, 20 and 21 February 2017, Himalaya Hotel, Nepal
Topic : South Asian Forum of Employers (SAFE) 6th meeting - Minutes

1.  Introduction

Introductory statements to this 6th SAFE meeting were made by Messrs. GOLCHHA, Vice-President FNCCI, and CHORUS. Mr. Golchha welcomed all participants, and pointed out that the South Asian countries differ in size but face common problems, such as youth unemployment, labour migration and lack of skills. Nepal in addition has to cope with low growth and political instability. The implementation of the new Constitution should bring stability and an improved business climate. He considers that SAFE is a very useful platform, but our mutual co-operation has to be strengthened at we do not make optimal use of it, sharing more information. Vocational training is an issue in all South Asian countries, and collaborating on this issue inside SAFE is in our common interest.

Mr. Chorus added that this 6th SAFE meeting takes a very good start, thanks to the excellent preparatory work of the hosting FNCCI and ITC/ILO. DECP is pleased to continue its support of SAFE, inter alia by covering the meeting and transport expenses of the participants. He feels that this Forum shows how employers and entrepreneurs can work together where politics sometimes create big barriers. Sharing and pooling information, and discussing common problems will help us all: for this reason SAFE has been set up in 2011.

Regretfully our Afghan colleagues were not able to obtain visas, so that this time five of the six partners in SAFE are attending.

The EO representatives introduced themselves, and expressed their wish to further strengthen SAFE.


2. Skills and Vocational Training

Mr. De Koster made a presentation on ‘EOs and skill policies’. In a first part he explained the importance of effective skills policies for both the global wealth of any country, as for the business climate, growth and employment creation by the private sector. In a second part, he tried to clarify the vastness and the complexity of skills and educational policies, making a distinction between the general education system, bridging the gap between the labour market and education, and life-long learning. In a third part, a short overview was given on the methods of intervention used by employers organisations in order to influence educational and skills policies: lobby with decision makers; use the social dialogue, teaming up with the trade unions, and take direct action by a number of initiatives, such as improving labour market information, supporting vocational training and offering in-company training. He finally formulated some questions on priorities. Information on priorities is also important for DECP in order intervene in function of priority needs of the partners..

After him representatives of the two EOs that had volunteered to present their ideas on the   skills issue, took the floor. Mr. WEERASINGHE presented the Sri Lanka experience, and gave some data on its labour market: male participation is at 74%; female at only 36%; agriculture employs 28%, industry 26% and services 46%. Unemployment is low at 4.5% but youth unemployment stands at 21%. Migration is below 300.000, and decreasing. He mentioned some specific ‘drivers of demand’ on the labour market, like technologic and demographic change, and the problem to match skills that are learned in schools with labour demand. Sri Lanka set up a ‘National Vocational Qualifications Framework (NVQ) that develops standards and curricula, and tests and accredits courses. He argued that EOs should not leave vocational training to the government but actively interfere. The tendency to opt for white collar jobs, in government or the medical or law professions should be redirected towards opting for more technical skills that ensure employment in business. Migrants tend to go overseas for jobs that are below their qualification level: this relates to higher wage offers abroad. Labour market distortions have to be removed as well. Sri Lanka introduced in 2013 a ‘Technology Stream’, promoting engineering, biotechnology and information/communication technology studies. This attracts many students. At the sectoral level courses have been developed for construction, IT, light engineering and hospitality. Firms try to link skills levels with their pay systems: at the basis a minimum skill level links with the minimum wage.

EFC intends to become a member of GAN, the international apprenticeship network, and wants to promote diversity by reducing barriers for women, creating opportunities for disabled persons (for which it created a network) and re-training retirees. It hopes to charge a nominal fee for these services. EFC has also incorporated a strategy on skills development in its 2017-2019 business plan. He finally identified skills challenges, such as flexibility, migration, environmental issues, and new dimensions of training.

Mr. ALAM briefed the meeting on the situation in Bangladesh, introducing his EO, the BEF, and its activities on improving working conditions, especially in the garments industry, where with support of ILO extensive training on OSH is given to around 800,000 workers. BEF also runs a programme to introduce safety committees and best practices in individual firms. It is also partner in the Bangladesh business disability network, offering decent jobs to this category of workers. BEF supports apprenticeships in 22 member companies. On vocational skills Bangladesh in 2016 organised a ‘skills summit’ at which youth employment, apprenticeships, decent work and workplace safety were discussed. A vocational qualifications network (NTVQF) has been set up with special attention to management training, as managers now tend to be hired abroad. An Industry Skills Council is working on improved skills for industry.

In the ensuing exchange 3 main questions were discussed: i) what are the priorities for EOs in the region, and what is feasible as outcome – result in the short term; ii) what  intervention method can be used best in your country; iii) what can the SAFE network specifically do?

Ad i: Priorities for EOs: they rather relate to the skills outcomes of education and the issue of bridging than the issue of life-long learning. Speakers stressed the mismatch between jobs offered by them and skills outcomes of school leavers. Priority should hence be given to  better labour market information; improved  forecasting of labour market needs, stronger involvement of employers in curricula and school programmes ( especially in VET); better career guidance for students; efforts for bridging school – labour market via internships etc. A sector based approach, may have to be taken in addition to the general one. Life-long learning is a lesser priority.

Ad ii) Most intervention methods cover lobbying, the social dialogue  and direct initiatives at local level between companies and schools. Using the social dialogue at national, regional or sector level could be enhanced.

Ad iii) SAFE could help creating some clarity on the skills needed across the region, including skills assessment in each country. This would give employers a better insight in which skills the diplomas from other countries cover. Sectors such as hospitality, IT, construction, maintenance, logistics, may be interested in a common certification system that brings transparency on acquired competencies. Participants felt that some more time should be devoted in the future to these issues, and may be linked to the next meeting on migration.


3. Future of EOs

The second day Ms. SANCHIR presented a range of challenges our organisations have to face as well selected findings of the survey conducted by ILO in Asia Pacific region on the state of the employer and business organization. The World Economic Forum questioned 371 firms, and found that 35% of ‘core jobs’ would ‘be disrupted’ (= change) in the next 5 years, due to integration, innovation (including artificial intelligence), demographics, climate change and geopolitical factors. Firms had to invest in ‘reskilling’ 65% of their employees, and in developing female and foreign talents. Jobs would rotate: life-long employment is over. These trends will increasingly impact EOs to evolve and respond to emerging needs of increasingly diverse membership. Other ILO research shows  that  EOs feel pressure by shifting needs of their members, changing relations with government, the unions and civil society, and competition from ad-hoc organisations of business. There is an indication that   there is a notable  shift from member subscriptions to paid-for services. We will have to pay more attention to servicing of SMEs, and maintaining (weak and politicised) trade unions as partners. ICT is increasingly applied in order to cope with future developments.

4. Future of SAFE; next meeting

Lack of time did not allow us to have a round table on current developments in the EOs. The members will exchange written reports, that will also be put on our website www.safe.org.lk, This site is kindly hosted by EFC; each EO can obtain a password and instructions on how to operate with Mr. Dasun at dasunk@empfed.lk.

SAFE is moving towards a forum that allows its members to develop positions on important issues, but it turns out to be difficult to establish such a position on skills. We will come back on this issue at the next meeting, when the issue ‘Migration’ will be the main topic to be discussed. As agreed last year the Indian members will prepare this discussion; Mr. DHAL will kindly develop a draft document and questionnaire on which the other EOs will be consulted in the course of this year. ILO will also be asked to give its input. The results will be compiled in a discussion document that will be discussed at the next SAFE meeting, and hopefully result in a SAFE position.

The other issues that were selected in 2016 will be retained for future discussion; when needed EFC is willing to take over the issue ‘women empowerment’ from ACCI for the 2019 meeting. The ACCI representatives were not able to attend, as they could not obtain travel permits from their government. We hope that next time a solution will be found for them.

The ‘to do’ list is thus:

  1. Contract labour & migration (2018: EFI and AIOE prepare)
  2. Women empowerment (2019: ACCI and/or EFC prepares)
  3. Labour law for the 21st century (EFP prepares)
  4. Wage & productivity (FNCCI prepares)

A Proposal for the Formation of 4 SAFE Task Forces that was distributed by EFP was discussed; its suggestion to set up a working group on communication was immediately accepted. Mr. ZUBERI is willing to act as convenor; all member-EOs are invited to indicate a representative in this working group. It will consider communication tools that we can use in order to make exchange of info and opinions easier, and may include a regular newsletter.

The other proposed task forces (on skills, women empowerment and the future of work) will be considered at a later stage.

At the meeting EFP and FNCCI concluded a Memorandum of Understanding that further strengthens the framework of our common Forum.

President AZIZ of the EFP kindly invited the SAFE to hold its 2018 meeting in Karachi. It is a beautiful and accessible city; safety aspect will be taken care of. The meeting is pleased to accept the EFP proposal; the date of the 7th SAFE meeting is set at Monday 19 and Tuesday 20 February 2018; we intend to use the two full days.

The representatives of FNCCI that kindly hosted this 6th meeting, and did such an excellent organisational job; the ILO/ITC secretaries who arranged our flight schedules and visa; and Ms Sanchir, Messrs. De Koster, Weerasinghe and Alam were all greatly thanked for their contributions and support. The meeting was closed with short statements of Ms. Meena SHRESTHA and Mr. Chorus, and a common lunch at the Hotel.



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 Subject :South Asian Forum of Employers (SAFE).. 14-12-2016 20:36:19 
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Forum : South Asian Forum of Employers (SAFE) 5th meeting, 10 and 11 March 2016, Colombo Sri Lanka
Topic : South Asian Forum of Employers (SAFE)

Attending: Ms Meena WARDAK; Mr Abdul Qadir BAHMAN (ACCI, Afghanistan)

Messrs. Asif IBRAHIM; Absal Shaquib QUORESHI (BEF, Bangladesh)

Messrs. Bhagirati DHAL; Rajinder Singh MAKER (EFI, India)


Mr Yagyaman SHAKYA (FNCCI, Nepal)

Messrs. Zaki Ahmed KHAN; Fasihul Karim SIDDIQI (EFP, Pakistan)

Mr Kanishka WEERASINGHE (EFC, Sri Lanka)


Mr Arnout DE KOSTER (ITC/ILO, Italy)

Mr Ravi PEIRIS (ILO South Asia)

Minutes by: Mr Rogier CHORUS (DECP, Netherlands)

  1. 1. Introductory statements to this 5th SAFE meeting were made by Messrs. Chorus, De Koster and Peiris. They stressed the importance of a thorough and continuing exchange of information inside SAFE, and were pleased to see all EOs of the six member countries represented. They also thanked the EFC for hosting once more the meeting in Colombo. Mr Chorus expressed the continuing interest of DECP in facilitating SAFE, inter alia by covering the meeting and transport expenses of the participants.

The EO representatives introduced themselves.

  1. 2. Advocacy & Lobbying

Mr. Chorus made a presentation on the eight steps of the lobby planning cycle (attached) as an introduction to the subject. Subsequently for every EO presentations were made by the participants:

-          Mr. Bahman on Afghanistan:

300 enterprises have been consulted in order to develop a business agenda with the most important issues to be dealt with by the central government. Eleven priorities were listed: a one-stop-shop system for starting a business with an electronic permit system in order to avoid corruption; creating an attractive investment climate by improving dispute settlement, insolvency, and contract law; setting up industrial parks across the country; creating a legal framework for public-private-partnerships (PPP); and improving transport infrastructure through dry ports etc. The priority list was presented to the Finance Minister and the President.

-          Mr. Quoreshi on Bangladesh:

The BEF’s main concern is social policy, with a focus on women empowerment and child protection. As a result child labour does not occur any longer in the formal economy. Action was taken to revise the Labour Act in 2013. The textile plant disaster in 2013 prompted the BEF to develop a code on structural and fire safety, by which each firm has to install an inspection system. Occupational safety & health (OSH) is a priority: with the help of ITC/ILO an OSH handbook was made, and 114 trainers have been schooled, so that now 750.000 workers are familiar with the main OSH issues.

In the future the BEF wants to be more pro-active, taking up issues like increasing productivity, migrating women and PPP. It has good working relations with the trade unions that take part in the tripartite consultations, and set up a crisis management committee with them to deal with upcoming problems. The International Finance Committee of the World Bank supports the desk research on these issues.

-          Mr. Dhal on India/EFI:

Main goal of EFI is to foster competitiveness by promoting harmonious relations with workers. It organises a range of workshops on issues like ‘employee relations’ (ER), for which member firms can obtain an EFI excellence award. Trade Unions now prefer bilateral contacts with the employers, as they consider the government to be too pro-business. EFI also runs an ‘industrial relations’ audit for member organisations. It has developed an App on the Indian Labour Law, and a remuneration survey, and it lobbies in tripartite bodies on health insurance, vocational training and labour legislation. With the help of Tata a training institute on industrial relations has been set up.

EFI is the main partner for social issues in the Council of Indian Employers, with the All-Indian Organisation of Employers and the Standing Conference of Public Enterprise.

-          Mr. Srinageshwar on India/AIOE:

The AIOE organises once a year the Labour Conference in which all employers discuss social policy. It also has a seat in the Wage Advisory Board, and lobbies on social security and pension issues, including the level of the reference interest for pension insurance. Another lobbying issue relates to the ease of doing business. The Labour Law is very rigid and out dated, and the Indian States do not apply it in an identical way. AIOE is promoting simplified codes that cover matters which now are regulated in the labour law. On such issues there is frequent contact with the Trade Unions. Outsourcing/contract labour is forbidden by law, but the Unions are slowly accepting the need for more flexibility. AIOE focuses on social policy issues; the economic issues are left to the Federation of Indian Chambers FICCI and its many State and local chambers.

-          Mr. Shakya on Nepal:

The FNCCI organises 97 trade associations, 799 big enterprises, 20 bi-national chambers, and many SMEs, through the 115 member chambers. It has councils and committees for the main topics labour, industrial policy, commodities, agriculture, energy and forestry, and ad-hoc work groups are dealing with specific issues. FNCCI has a place in bodies that advise the government on planning, industrial policy etc.

A problem is the volatility of politics, which causes immobility of the civil servants. Big lobby issues are the minimum wage, the state budget, the new Constitution, the effects of last year’s earthquake and the recent blockade of the frontier with India. In the latter case the Trade Unions saw that the economy was grinding to a halt, but did not dare to instruct their members to end the blockade. Some lobby results have been the easing of VAT declarations, and better import procedures. An important source of income is the certification of origin system that FNCCI runs. The Confederation of Nepalese Industry is a parallel business organisation.

-          Mr. Siddiqi on Pakistan:

His organisation has 500 members in the 4 provinces. It has gained visibility by developing a list of obstacles to business, including poor energy supply, corruption, women and youth unemployment, weak SME policy, and low productivity. These items were listed in the Pakistan National Business Agenda 2013 that was established with the support of the trade associations. Also its comments on the 2013 election programmes of the different political parties received a lot of publicity. The EFP is independent from the Chambers that focus on economic issues. It recently developed the ‘7 Cs’ plan which acts as a business agenda. The lobby items it contains relate to the investment climate, the ‘Doing Business’ agenda of the World Bank, empowerment of women and youth, better governance and the Labour law simplification. In the latter case the situation is comparable to India, as this law dates from colonial times. The EFP proposed a simplification in 2010, but only now the government has made a reference to this issue in its recent budget draft. Relations with the Unions are good: a common position is prepared on many issues before meeting the government. In a High Court case EFP has been able to push the government into adopting ILO conventions at the federal instead of the provincial level. Together with DECP it is developing a resources and services package for its members. This will be a tool for increasing membership and finances.

-          Mr. Weerasinghe on Sri Lanka:

The EFC is a well organised EO that focuses on social policy, leaving the economic issues to the Chambers. It has 624 direct members and 35 member trade associations. The secretariat takes care of the lobby, as individual firms do not wish to antagonise the government. Migration and reforming the labour law are issues high on the EFC agenda. It also offers services derived from its lobby activities, and other services like support in legal proceedings, to its members. The tripartite meetings, where business sits together with no less than 6 ministries, offer a useful lobby platform. Here issues such as employment, productivity, international competitiveness, and skills are discussed. EFC wants to link wage increases to higher productivity. In addition to lobbying, EFC has taken its own initiatives, e.g. on youth employment, organising a platform where university students meet business. The secretariat is engaged in doing more research as a basis for more effective lobbying en advocacy actions.

  1. 3. Vocational training

Through lack of time this subject was postponed till a future meeting, with apologies to Mr. De Koster.

  1. 4. Regional ‘ambassadors’

Mr. Peiris made a presentation on strengthening the regional representation of the EOs (attached). His suggestion is to nominate regional ‘ambassadors’: e.g. HR directors of firms in the regions, who will promote the EO, spread information on its activities, and acquire new members. This will enhance the representativeness of the EO and provide a broader financial basis. In the discussion on this suggestion it is highlighted that these ambassadors should operate separately from the structural ties that an EO will have with its regional members. They would not have a say in policy making, but can be motivated to do the job by providing them with more information about the EO and its policies. In some cases retired businessmen may play this role.

  1. 5. Preparing the next meeting

Lack of time did not allow us to have a round table on current developments in the EOs.

Mr. Dasun, staff member of EFC, that hosts the SAFE website www.safe.org.lk, presented the updated site. Position papers of the SAFE member EOs can be uploaded; each EO can obtain a password and instructions on how to operate with him. A window on comments and questions is available: all members are automatically informed by e-mail. Mr. Dasun can be consulted on dasunk@empfed.lk. The members congratulated the EFC for this well-functioning website, which should become a cornerstone for our future activities.

The meeting felt that the SAFE forum should move from a platform for exchanging information to a forum that allows its members to develop positions on important issues that have been selected together, and prepared by one of the member organisations.

The participants decided that the following five issues, with for each issue an EO that takes the lead in preparing a discussion document on it, will be retained for future discussion:

  1. Vocational skills & competence (EFC and BEF prepare)
  2. Contract labour & migration (EFI and AIOE prepare)
  3. Labour Law for the 21st century (EFP prepares)
  4. Wage & productivity (FNCCI prepares)
  5. Women empowerment (ACCI prepares)

Several EOs volunteered for hosting the next SAFE meeting; Mr. Shakya’s offer to host this meeting in Kathmandu was welcomed, and accepted by all.

The meeting dates will be Thursday 23 and Friday 24 February 2017.

The representatives of the EFC that so kindly hosted the 5th meeting; the ILO and ILO/ITC secretaries who did an excellent job of arranging flight schedules, visa, the venue and meeting room, etc.; and Messrs. Chorus and De Koster were greatly thanked for their contributions and support. The meeting was closed with a common lunch at the Hotel.

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 Subject :Download Presentation - Sri Lanka.. 10-04-2015 04:41:11 
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Topic : Download Presentation - Sri Lanka

Click the following link to download the Presentation - Sri Lanka


(Membership Strategies & New Developments)

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 Subject :Download Presentation - Pakistan.. 10-04-2015 04:37:35 
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Topic : Download Presentation - Pakistan

Click the following link to download the Presentation - Pakistan


(EFP's ppt on Minimum Wage)


(EFP's ppt on National Development)

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 Subject :Download Presentation - Nepal.. 10-04-2015 04:31:20 
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Topic : Download Presentation - Nepal

Click the following link to download the Presentation - Nepal


(Minimum wage In Nepal)

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 Subject :Download Presentations - Bangladesh.. 10-04-2015 04:21:30 
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Topic : Download Presentations - Bangladesh

Click the following link to download the Presentation - Bangladesh


(Minium Wages)



(Internal Development 2014)

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Since 2011, senior representatives of Employers’ Organizations (EOs) in South Asia have met annually in a short workshop with the primary objective of sharing experiences and policy approaches on issues of common concern and interest, creating an active network among neighboring countries EOs and enhancing their effectiveness in critical areas for EO development such as:

  • Membership Promotion / Retention.
  • Lobbying with governments to create a more conducive environment for business and national competitiveness.
  • Provision for relevant services to members geared towards enterprise competitiveness and sustainability.
  • Revenue Building.

A concrete result has also been the launching of a common website www.safe.org.lk., hosted by the Employers Federation of Ceylon (Sri Lanka).

A recent survey on the number of “hits” indicates an encouraging increase in its usage as a tool for information exchange.

The workshop of 27 – 28 October 2014 continued the process of facilitating mutual cooperation among south Asian EOs for further strengthening their national and regional effectiveness vis-à-vis their membership and the private sector as a whole in the current dynamic socio economic environment.

The specific focus in this workshop was on Minimum Wages (MW). The subject of MW is one of importance and concern to all developing countries in Asia, in the export sectors in particular. In ongoing debates/ dialogues on MW, governments, employers, workers and other stakeholders are often challenged with a range of issues in regard to policies and their implementation.

Whereas EOS are expected to play a lead role in this debate/dialogue, the insight into and discussions on the short and long term policy implications of the proposed solutions at the workshop were of substantial value to EOs in developing their own policy positions on the subject and for more effective engagement with Governments and other stakeholders.

Apart from MW, the workshop also focused on recent developments/trends in the area of lobbying/advocacy and services to members in the overall context of EO membership retention and expansion.

Representatives from national employer organizations in the following countries participated in the workshop.





Sri Lanka

Afghanistan, though invited, was not represented.  A list of participants is attached hereto.

As in the previous 3 instances, the workshop was supported by the Dutch Employers Cooperation Program (DECP) with the Employers’ Activities Bureau of the ILO and the ILO International Training Centre.   The workshop agenda is also attached hereto.

The Employers’ Federation of Ceylon (EFC) acted as the co-host. The participants were hosted to a dinner by the EFC on the 27th.

27th October 2014  -  Inaugural Session

The ILO Senior Specialist for Employer Activities for South Asia Mr. Gotabaya Dasanayaka welcomed the participants.  He drew attention to the background in which the SAFE was initiated in 2011 and has since developed into a relatively effective EO network anchored around the SAFE website which has been efficiently hosted during the last two years by the EFC.

In the context of the topics of discussion at the workshop, he highlighted the importance of MW - currently a topical issue for all countries in South Asia - and urged the participants to make use of the deliberations to enable national EOs to plan their strategies to effectively address issues pertaining to MW at national level.

With regard to membership retention and expansion, he pointed out that almost all EOs have in the recent years initiated new strategies in terms of advocacy and services.  While participants exchange information in relation to these new initiatives, he also urged EOs to make further use of the SAFE website to upload information on such matters in respect of other areas of mutual interest as well for more effective networking.

Mr. Dasanayaka thanked the DECP represented by Mr. Rogier Chorus at this workshop for their continued support to this program.  He also thanked the ILO office Colombo and its Director Mr. Donglin Li for the support extended in arranging this workshop and also for hosting the participants to a reception on the evening of the second day of the workshop.

Mr. Arnout de Koster, Program Manager, ACTEMP/ILO ITC in his address thanked the DECP for their continued support and made special mention of the former DECP Advisor Mr. Jan Karel Bout for the role he played initially in making this program a reality.  He welcomed Mr. Chorus and looked forward to a continued constructive relationship with DECP.

He, thereafter, summarized the agenda for the two day workshop and encouraged all participants to engage in the deliberations and also use the SAFE website on a more regular basis to improve networking.  Finally, he thanked the ILO Colombo and its Director Mr. Donglin Li for the unstinted support they extended and also the EFC for their hospitality.

Mr. Chorus, DECP advisor, while recognizing the services rendered by Mr. Jan Karel Bout, introduced himself to the participants and proceeded to give a brief outline of the role of the DECP at national and international level in assisting the growth of business. The DECP, he said, was a public private partnership between the Dutch Government (Ministry of International Co-operation) and Dutch employers, engaged in the process of ‘building bridges’ between business and government.

While the DECP is engaged in advocacy for business at national level, it also supports EOs around the world in strengthening their capacities for more effective engagement with governments. He emphasized that the subject is of crucial importance to EOs as it affects the root of balancing issues between social considerations and economic realities.  He looked forward to the deliberations of the workshop.

In his address he made reference to the initiatives taken by the ILO Colombo office in Sri Lanka and particularly to the constructive role played by the EFC as the ILO’s employer constituent.


Technical Session 1

Minimum Wages (MW)

Representatives of the participating EOs made brief presentations on the subject of national minimum wages in their respective countries.  The presentations made are attached hereto.  The presentations under discussions that followed focused on the following areas:-

  • The existing MW systems at national level.
  • The existing MW systems in each country.
  • The level of MW in nominal and real terms.
  • Issues/challenges faced by EOs in relation to MW policies in the respective countries.
  • Proposals made to influence and change existing MW policies/mechanisms.

The presentations were interesting and many other aspects highlighted the difference between countries in relation to policies, their application, structures and also wage levels.

A summary of learning’s from the presentations made by each country:

Policies on MW vary from country to country and it is linked with the national culture etc. with quite some difference in level setting mechanisms, at sector - provincial – national levels.

  • But the common trends are: MW is now everywhere;
  • Decisive factors on MW fixation:
    • Level of wages
    • Social security
    • Inflation
    • Employment level
    • Productivity
    • Capacity to pay by the industry
  • An interesting discussion took place on “The lighthouse effect” – once the minimum wage is set it tends to attract all other wages to it.
  • An EO perspective: “Not very successful”. MW increases - both nominal and real, are important everywhere: annually the MW level increase varies from a nominal 20%  to a real 10%
  • The high increases become a major concern (although in some more than others)
  • The high increases have had a direct impact on Labour Intensive Industries like hotels and such other services
  • In some countries because of its “Spillover” effect,  the impact has been two dimensional (senses)
    • General effect on non-minimum wage workers, obviously more than on those close to MW, because the MW increases set framework for expectations
    • The impact of the Community-Based Adaptation (CBA) on climate change has had an additional impact on MW increase in Nepal.
  • Why is MW a concern for employers?
    • Pace of increase surpasses and goes beyond the capacity to pay; and is insufficiently “earned” via productivity or performance
    • Consequences – increased costs are translated in higher prices, or if prices cannot be increased, the sharp increases in MW affect profits and capacity to invest.
    • Further consequences: diminution of employment and more informality of certain companies - divestment.
  • Different countries and different situations are linked with different economic situations: Institutions and policies make a difference.
  • Sector level wages seem more linked to market realities ( and CB) than National MW
  • Interesting to note how ‘more the political  influence - the faster the increases’
  • Timing may be important. What comes first : MW or sector and company CB
  • Coordination of EO wages board representatives can be important

What can Employer Organisations (EOs) do?

What EOs know about MW in their regions – facts & figures?

  • A strong increase of ‘real’ minimum wage rate from about 8 – 15% annually, is common.
  • A ‘mean’ minimum wage rate ranges from about 40 – 60%
  • The influences on real minimum wage levels are above minimum wages

What works to keep a moderate increase?

Various arguments and facts used for consensus building were presented.

  • Persuasive arguments - Employment / Informal Economy effect / Fixed adjustment criteria
  • Missing force in argument – Systems: Bipartite / Tripartite / Government ONLY; does it make a difference?
  • What would it be? ONE MW or several ONEs? A two tier system: SMEs and others?

What ACTIONS of EOs have brought success in MW?

  • Compensation via non-wage labour cost

How can SAFE and ACTEMP help?

By providing;

  • Training support
  • Guidance
  • Knowledge / information sharing (International comparisons - Unit labour cost / GDP)
  • Research
  • Capacity building of EOs

Thereafter, Mr. Roy Chacko, Senior Advisor Employers’ Activities Bureau (ACTEMP) made a presentation on the subject of “The Minimum Wage in Practice”.

He covered the following areas in relation to MW:

  1. History & Nature.
  2. Methodology/Procedures.
  3. Objectives.
  4. Criteria.
  5. Levels.
  6. The Minimum Wage Debate.

His conclusions highlighted the following:

  • It is not the concept of the MW that matters but the level at which it is set;
  • MW can help low-skilled workers by limiting the impact of marketing efficiencies which place them at a disadvantage;
  • MW is not a good instrument to solve poverty issues.  Direct payments to poor households will have more impact and fewer drawbacks.
  • It is necessary to study the impact of previous MW increases and base further increases on the available evidence.
  • It is critical to gather good data and to base MW decisions on the evidence they provide.

This presentation was followed by further discussions amongst the participants who thereafter addressed the following issues in groups:

  • Should MW concern employer organizations?
  • Can EOs agree on some common points in addressing/responding to MW issues?
  • How can national EOs/SAFE assist each other?
  • What assistance can be given by ILO/ACTEMP to EOs?

A lengthy discussion followed during which the following aspects were highlighted by the group deliberations:

•      The subject of MW is a matter of concern for EOS having regard to the implications of it on aspects relating to employment growth, enterprise stability and wage bargaining.

  • MW fixation should be linked to national economic/industrial growth.
  • MW needs to take into account employer’s capacity to pay and productivity aspects while recognizing cost of living related issues as well.
  • MW should be addressed not annually but on a periodic basis to ensure a degree of stability.
  • Exemptions from minimum wages may be considered based on sector/regional aspects but not in general.  Employers should have a comprehensive understanding on the impact of minimum wages in relation to their enterprises, sectors and national economy.
  • EOs need to engage in continuous dialogue with governments to sensitize policy makers on the impact of MW.
  • Countries require independent institutionalized processes for MW fixation (independent high level commissions).
  • EOs should strengthen their research/analysis capacity in the context of continuous lobbying/advocacy with stakeholders.

Some participants raised concerns regarding the involvement of “civil society” in MW debates.  The importance of retaining the wage determination process among employers, workers and the government was highlighted.

The EOs expected support from institutions such as the ILO and DECP in relation to capacity building of EOs in addressing the technical aspects of MW.  The importance of regular exchanges of information and sharing of best practices, ideally via SAFE was highlighted.


28th October 2014

Technical Session 2

Recent Developments within the EOs at national / regional level

Each EO made presentations on new important developments at regional and national level relating to socio economic policies, and new important developments/ventures within the organisation, related to its lobbying, service or social dialogue activities.

Highlights of the country presentations: More detailed information available in the respective presentations.

INDIA -             

On Membership

  • Strategies to Reaching Small & Medium Enterprises
  • HR/IR Conventions – membership drive – 20/30 out of about 300/400 join
  • Conferences/trainings in different states
  • AIOE award – 9 awards to a level playing field
  • MSME – 3 awards
  • Consultancy services via embassies
  • Collates all information and services on IR, Labour issues

On Lobbying

  • 100 day Agenda for the Government. FICCI and IOE
  • Follow up – reinforcing the message
  • Shop and Establishment Act – Labour Laws
  • Survey on Labour by AIOE and FICCI. Online self-certification / self-inspection

Plan for Next 2 years

  • Improve on Skills Development
  • Develop more efficient Industrial Dispute Resolution systems
  • Conduct projects on Employability, Decent Employment


On Services

  • New Draft on labour law  - bipartite /tripartite, government / trade union
  • Collective bargaining – Sectoral
  • Discussions on payment for ‘lawful strike’? Strikes should not be encouraged in anyway… A ‘Law’ for lawful strike.
  • Mechanism for social dialogue
  • Company Act, Trade Related Act & Industrial Act


On Membership

  • Writing to targeted companies giving a brief introduction to EFP and its services.
  • “Employer of the year award” was held by the EFP encouraging both members and non-members and to thereby induce the non-members to join EFP

On Services

  • Better skilled Inspectors – tripartite
  • Awards/ Nominations – Occupational Health and Safety OSH
  • Legal Services improved
  • Internationally Certified Trainers available for conducting OSH training

On Lobbying

  • Finalizing the Sindh Labour Laws
  • Advocacy on the Act of Sexual Harassment of Women passed in 2010
  • National Business Interventions – during the last 2 years

Plan for Next 2 years

  • The Devolution of the 13th Amendment
  • Improvements to the environment of business development
  • The advice / guidance to Employers on how to do business



On Membership

  • In 2012, as part of Strategic Activity, BEF decided to increase membership strength by 10% per annum during the next 3 years.
  • BEF currently has 127 Ordinary Members representing individual companies, which is about 10% more than the previous year.
  • 14 Group Members representing sector-specific industrial associations, covering more than 6,000 enterprises.

On Services

  • Initiative for a Training Unit on Labor Law/IR: In January 2014, BEF in cooperation with the ILO has set up a Training Unit to deliver training services to the employers on labor law, industrial relations, and HR practices. This will be supported directly by the ILO at the initial period, but expected to become self-sustaining later.
  • BEF conducted a training needs assessment study for the member firms in 2014
  • Currently developing demand-based training program
  • Rana Plaza Accident – BEF was and is actively involved in the activities to uplift it together with the ILO
  • Conducting Factory Inspections

On Lobbying

  • Labour Rule Issue

Plan for Next 2 years

  • Revise Act
  • To push for regulations
  • To support implementation of the Act
  • To work towards getting an Act which is EMPLOYER FRIENDLY


On Membership

  • Use of better techniques of reaching out to members; Increased membership
  • EFC’s endeavor to reach out to the SMEs sector and expand regional outreach

On Services

  • Focused consultancies; Niche Products; Continuous review & re-evaluation of services; Ascertaining member needs; Compliance +
  • Visibility – Enhanced
  • The EFC carried out a training needs analysis of regional employers
  • TWO MOUs signed with regional EOs and workshops conducted
  • EFC Capacity increased; New Legal and HR Services


On Lobbying

  • Submissions to National Pay Commission on Minimum Wage Fixation - EFC Proposal; The EFC submits that the Sri Lankan Private Sector needs a minimum wage fixation mechanism for lower categories of workers as envisaged under the Wages Boards Ordinance subject to a restructure of the composition of the Wages Boards.
  • The Government via the NLAC is lobbying for the extension of provisions for women under the Shop & Office Employees Act No.19 of 1954 – To females over 18 years of age in the business of IT enabled services and Supermarkets, in order to create an enabling environment for employment opportunities for women in Sri Lanka.

Plan for Next 2 years

  • Continue pushing for Labour Law Reforms
  • Draft legislation proposed on the Industrial Disputes Amendments Act – to build an enabling environment.
  • In order to accomplish the above maximize the use of enterprise dialogue – social dialogue


In the context of the foregoing, it was the consensus of the participants that SAFE should be further strengthened.  With this end in view, all the participating EOs looked forward to the continued support of the ILO and the DECP.  The following aspects in particular were highlighted.

  • The importance of uploading information on a more regular basis in the SAFE website;
  • Strengthening the research/analysis strategies of EOs;
  • The importance of EOs having access to current information/data to support their Lobbying/advocacy process;
  • The advantages of making further use of the SAFE website for information sharing on subjects of mutual interest and concern;
  • The importance of EOs being relevant in terms of lobbying/advocacy and also the provision of services to members in the overall context of membership retention and expansion;

Mr. Rogier Chorus thanked the participants for their frank and open engagement in the discussions and appreciated the desire to share and learn from experiences within the sub-regions.  He said that while the DECP would wish to continue to support funding of SAFE, they would also expect the South Asian EOs to contribute in a tangible manner to the development of the forum with the objective of making it an independent body.  He congratulated the EFC for the excellent job in hosting the website.

Mr. Nauman, of EFP on behalf of the participant countries thanked the DECP, Mr. Chorus, ITC/ILO, Mr. Arnout De Koster and Mr. Gota Dasanayaka, ILO ACT/EMP and others connected with organising the workshop and also for providing a platform for delegates to share their respective national experiences and looked forward to further fostering EO cooperation in the sub region.

Mr. Arnout de Koster, Mr. Roy Chacko and Mr. Gotabaya Dasanayaka whilst assuring the participants of continued ILO support also highlighted the importance of EOs making use of the opportunities available through the SAFE to strengthen their own capacities for the provision of more effective services to their members.


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 Subject :Sri Lanka’s Employers’ Grouping hailed as exemplary unit by ILO.. 12-10-2014 21:21:28 
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Forum : Employers' Federation of Ceylon
Topic : Sri Lanka’s Employers’ Grouping hailed as exemplary unit by ILO

The Employers’ Federation of Ceylon (EFC) of Sri Lanka, the premier employer representative organisation in Sri Lanka, was complemented by the International Labour Organisation (ILO) last week.
This occurred at an event held at the Water’s Edge, Battaramulla, to launch a scheme to present an independent audited information of corporate entities on compliance on – Equal employment opportunities; Employer/employee relations; Work arrangements and Environment.
Donglin Li, ILO Country Director for Sri Lanka and Maldives speaking at the launch of EFC ‘Compliance plus Initiative’ said that the EFC is the most forward looking organisation representing the business community promoting the decent work agenda and the concept of core international labour standards. He said that EFC, a long standing partner of the ILO, has been a driving force in contributing employer viewpoints to the ILO.
He said that there are consumer movements in the world that restrict buying from producers who do not comply with labour rights and pointed out that labour issues and working conditions have become clear denominators to trading agreements across the globe.
He said “I do not have to tell you how important it is in this globalised world, for Sri Lanka to find ways of carving out a niche in the highly competitive world markets and in the last couple of years there have also been some challenges with regard to compliance of international obligations”.
He stressed the importance of compliance with labour, social and environmental standards to meet the expectations of the world community, while sustainable growth requires economic efficiency in enterprises.
He said that the ILO encourages countries to ratify and implement the core conventions relating to elimination of child labour, forced labour and discrimination and to the promotion of freedom of association and collective bargaining.
In explaining all about what ‘Compliance +’ is, Ravi Peiris, Director General, EFC said that the rationale is for a new Sri Lankan Employer Brand – to showcase the very high standards maintained in employing workers – and this showcasing is with a Sri Lankan business Identity.
He said that the brand that EFC introduces is a unique product that would enable Employers/Enterprises to showcase themselves as exemplary businesses, vis-a-vis employment practices, in the context of national and international norms.
The Compliance+ brand is a source of assurance to any business stakeholder national or international that an enterprise holding this standard is not just compliant with the laws of the land, but seeks to surpass mandatory standards, and excel in them with its employment practices and the areas of compliance are: Equal opportunities in employment; Employer-employee relations; Work arrangement practices and Environment, Mr. Peiris pointed out.
The EFC, he said respects labour standards and advises its members to work within the framework of the law. Mr. Peiris said that equal opportunities in employment, freedom of association and the right to collectively bargain are fundamental principles which the EFC has always respected and promoted.
Consequent to the open economy, he said that the EFC widened its scope to make it a proactive organisation, catering to the needs of its members. He said the EFC today has a membership of 600 representing a wide spectrum of employers in Sri Lanka.
He pointed out that though the country has joined the middle income club, its share of exports in relation to GDP has shrunk from a healthy 33 per cent to exactly half at 16.5 per cent in 2012; thus it is very important to do more to attract investment towards a sustainable employment generating income.
“It is not so long ago that Sri Lanka had to respond to a petition filed by the American Federation of Labour Congress of International Organisations (AFLCIO) alleging breach of labour standards. The EFC also made its own submissions, along with the government,” he said denying these allegations and showcasing the country as being one which always respected and observed labour standards in Asia.

Article from : http://www.sundaytimes.lk/

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 Subject :Private Sector urged to be proactive in policy discussions.. 12-10-2014 21:17:27 
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Forum : Employers' Federation of Ceylon
Topic : Private Sector urged to be proactive in policy discussions

  • Employers Federation kicks off 2014 symposium titled ‘Breaking barriers for better work place’
  • China sets bad example, says IOE Head

With the world recovering from a deep economic recession and Sri Lanka emerging from a 30-year conflict, top representatives of the International Organization of Employers (IOE) urged business leaders to engage in policy discussions that reflect on the future that Sri Lanka wishes to achieve.
Referring to recent comments made by a leading economist that the public sector in Sri Lanka needs to be more like the Chinese public sector, IOE Secretary General Brent Wilton said: “I find that a little worrying. For me, the private sector of the country are the creators and the growth of the country. The role of government is governance and it is not the role of government to be in business.”
Delivering the keynote address at the Employers Federation of Ceylon 2014 annual symposium titled ‘Breaking Barriers for Better Work Place,’ Wilton said: “I think this is a crucial way you look to your reform agenda. Wealth comes from private sector. The public sector can create jobs but your taxes pay for those jobs. It’s not actually adding to the net growth of the country. That debate is something you need to approach more carefully and constructively. It is the private sector that creates wealth.”

Lanka’s potential



Ease of Doing Business

The country need to find ways to attract investors and encourage people to start businesses and create new employment opportunities. While the public sector can support growth through infrastructure development it is up to the private sector to create wealth. Policies and legislation needs to reflect that.

Sri Lanka is placed 85 in the Ease of Doing Business index according to the World Bank. Even with a two point drop since last year, this still places the country in a leading position in the region,” he said.

“It doesn’t mean you are doing worse. It means someone else is now doing it better” pointed out Wilton adding that it was not sufficient for the country to be satisfied as being the best in the region. Instead Sri Lanka needs to pursue leadership on a global standard and attract investors who could potentially invest anywhere in the world, as he pointed out: “As you drop others are increasing their ability to attract more investors.”

He also said that the private sector and the Government have an important part to play in deciding policies and legislation. “Legislation should promote investors. There should also be an ease to start businesses,” he said.

In Wilton’s home land New Zealand, new businesses can be started with a simple online registration process. “Thirty minutes later you get your tax number and then you’re done,” he said of mechanisms that have been made available to promote the start-up of new enterprises abroad.

In contrast to this, Sri Lanka’s ranking in the ease of starting a business has dropped from 47 in 2013 to 54 this year.

Wilton also pointed out that some laws prevalent in Sri Lanka (such as the requirement of a third party when firing people for redundancy) might make it hard for employers to engage in new business ventures.

He said: “Why should investors invest in Sri Lanka, when they can invest anywhere in the world? This depends on the ease of doing business.”


Emerging service economies

According to the IOE official, a lot of emphasis has been made in recent times on the emerging service economies. While many countries have been able to achieve rapid growth by developing their service sector, this does not indicate that production lines should be abandoned in order to achieve rapid development. As Wilton points out: “The countries that recovered from the economic recession first were Germany and Switzerland; they were countries that built stuff.”

It was emphasised companies also need to prepare for the future by ‘investing in the solution’ developing skills that go hand-in-hand with rapidly developing technology. As the world heads towards a future where robots will do more work than people, organisations need to prepare for this by teaching people to work with technology and not be taken over by it.”


Furthermore, efforts are also need to be made to reduce corruption as it is the “biggest cost and anchor on the development of a country” Wilton said, pointing out various issues that have to be addressed during policy discussions.  Wilton further added infrastructure development should also be aimed at value addition and “not just a political gift to certain regions or certain organisations”.

With local and global speakers, yesterday’s sessions were on identifying barriers to a better workplace and the dilemma of the equitable wage. Today the symposium will have a sessions titled ‘CEO to CEO discussion’ as well as focus on ‘What is the best prescription for the workplaces?’ ‘Breaking barriers – the corporate debate’ and a presentation of enterprise-based case studies.

He said the high growth rate that Sri Lanka has achieved is a recurring topic of conversation among business forums.

“These numbers indicate Sri Lanka’s immense potential. However, these numbers do not determine Sri Lanka’s future growth unless the areas that are creating growth are ‘locked in’ and it is for this reason that policy and reform agendas need to be carefully thought-out in order to facilitate that future growth,” said Wilton at the symposium, at which Chief Guest was EFC’s former Secretary General and former Deputy Director, the Bureau for Employers Activities of the International Labour Organisation.

Apart from the unique position of Sri Lanka, the urgent need to rethink strategies in the business world is felt globally as “coming out of the recession, the whole world has been facing this dilemma of having to rethink their entire strategies. What existed before the recession is not going to exist after the recession. The answers that worked in the past are not going to be the answers for the future.”

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 Subject :Sri Lanka Employers' Symposium 2014.. 31-07-2014 20:37:16 
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Forum : Employers' Federation of Ceylon
Topic : Sri Lanka Employers' Symposium 2014

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 Subject :EFC Submissions to National Pay Commission.. 27-03-2014 03:20:48 
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Forum : Employers' Federation of Ceylon
Topic : EFC Submissions to National Pay Commission


The Employers’ Federation of Ceylon (EFC) is the only registered Employers’ Trade Union (Registration No.1) under the Trade Unions Ordinance of 1935. It was established in 1929, as an Employers Organization, dealing with employment and industrial relations issues on behalf of Employers. The EFC has, over the past 85 years, promoted the interests of Employers within the framework of the law in Sri Lanka. This has given it the credibility and the acceptance of all stakeholders in employment, namely, the government, trade unions, employers and the public at large.
The EFC is the Employer Constituent of the International Labour Organization (ILO) and a member of the International Organization of Employers (IOE) and the Confederation of Asia Pacific Employers (CAPE). It was responsible in setting up the South Asian Employers’ Forum (SAFE) and co ordinates its activities among the group.
Currently, the EFC has a direct membership of 568 subscribed employer members  representing different sectors, such as services, manufacturing, exports, plantations, IT and BPO industries,  hotels and tourism, Banking etc. Indirectly, through its Affiliated Associations it represents over 2000 employers.  The majority of its members are in the private sector and therefore, our representations will mainly focus in relation to this sector.

Limits of the Mandate given to the National Pay Commission
in relation to the Private Sector

It is noted that the National Pay Commission has been established by a Presidential Directive and a proclamation made by His Excellency the President, Mahinda Rajapaksa in terms of the gazette notification published in the government gazette No.1835/12 of 5thNovember 2013. This proclamation makes reference to the members of the Pay Commission as well as the mandate given to it.
The following specific areas as set out in the gazette notification, in the context of the private sector, needs to be highlighted:
01. Need to make the employees of the public sector as well as the private sector a contented and motivated lot.
02. To recommend to the government from time to time specific salaries and wage revisions in order to prevent officers with professional qualifications and competence from leaving the public service to take up appointment in the semi government and private sectors.
03. To make recommendations to the government guaranteeing an appropriate minimum salary to those employees in the private sector, security of their employment  and availability of essential welfare amenities they are entitled to thereby implementing government policy of their welfare as enshrined in the Mahinda Chintana policy statement.

These are the only references made to the Private sector in the gazette notification.

1. Making Employees of the Public Sector and Private Sector a Contented and Motivated Lot[1]

In this context, it is important for us to understand the distinction between “public service” and the “private sector” in relation to motivational factors vis-à-vis its employees.
‘Public value’ dictates that public services are distinctive as are characterized by claims of ‘rights by citizens’ to services. In the modern context, these services have been authorized by the ‘public’ through a democratic process and funded through related processes. It is for this reason that those in public service are set to work at the ‘pleasure of State’ or its organs and permeate to the grass-root political organizations such as the local government authorities in Sri Lanka. Today, its numbers have reached unimaginable proportions. Sri Lanka is known to have one of the largest public sectors in the world!

The private sector, on the other hand, operates differently with a desire to maximize profits and shareholder value. Since the liberalization of the Sri Lankan economy in the late 1970s, every successive government has called the private sector to function as the engine of growth. The private sector responded to this call and has driven the Sri Lankan economy forward amidst much adversity and under rugged and least lubricant conditions. Many criticize and characterize the private sector as a profit seeking and exploitative animal, but few pause to take cognizance and appreciate the role performed by the private sector of Sri Lanka to grow the economy and to facilitate the good living conditions of which Sri Lanka can be proud[2].
The success of the private sector has been that it has embraced a culture of performance management, notwithstanding the fact that the legal framework that governs employment in the sector is still archaic and outdated. Employees in the private sector are given the opportunities to innovate, think on their own and make use of their talents and skills for the benefit of the Organization. It encourages a culture of organisational and personal growth.
In the above circumstances, a comparison of the two sectors would be similar to comparing “apples” with “oranges”.

2. Mechanisms to prevent migration from Public to Private Sector[3]
The gazette notification stipulating the mandate given to the National Pay Commission also highlights that it should recommend to the government from time to time specific salaries and wage revisions in order to prevent officers with professional qualifications and competence from leaving the public service to take up appointment in the semi government and private sector[4]. This acknowledges a concern in the wage fixation mechanism in the public sector and also accepts that there is an attraction or a movement of professionally qualified competent officers to the private sector from the public sector.
At executive and managerial level, the private sector adopts a performance based evaluation system in granting increases in wages and benefits to employees. More and more employers have begun to believe and accept that having a transparent performance management system and implementing it in a fair and reasonable manner is the only way to secure and retain good talent within an Organization.
One of the fundamental issues that the government needs to address in looking at public sector wages is the fixing of a wage to the position with restrictions on granting higher wages depending on qualifications and experience. For example, when a massive restructuring operation has taken place and a Company replaces important managerial positions, you cannot expect the Company to offer the same terms offered to the Manager who held this position earlier. The Company needs to make a business decision in such a situation. This is something that is not possible in the public sector. Fixing of the wage should necessarily be tied up with not only the position but also the person vis-à-vis his or her value addition to the Organization.

3.  Recommendations to government on minimum Wages to the Private Sector[5]
This is the most important aspect of the mandate vis-à-vis the private sector. There are two important elements in this paragraph which we need to consider. 
a.      The Ten Year Horizon Development Policy of the government – Mahinda Chintana – What does the labour policy articulate ?
b.      The concept of a minimum wage - should we follow it ? or what are the alternatives ?

( i )‘Mahinda Chinthana’ – Ten Year Horizon Development Framework
Chapter 11 of the Ten Year Horizon Development Framework articulates the Labour policy of the government. As soon as this policy was released the EFC fully endorsed it by confirming that the Policy directives identified are the most appropriate to create an enabling environment for employment creation in Sri Lanka. In fact one of the 4 policy directives refer to enhancing productivity and skills.
In the circumstances, we need to note that productivity enhancement should be firmly embedded in our wage policy in line with Mahinda Chinthana.  Furthermore, this policy underlining the Vision for the Sector states : “ There are several areas in which National policy needs to take a fresh approach such as changing from a traditional, obsolete labour policy to a growth oriented and investment friendly labour market led approach ensuring a decent work environment and a vision for all workers in Sri Lanka.”[6]

(ii) The Concept of a Minimum Wage
The issue of the minimum wage is controversial. Many argue that it is too blunt an instrument to be useful and could have detrimental effects on employment, growth and incentives to work, and that it can negatively impact opportunities for lower skilled workers and the youth. Supporters of minimum wages conversely argue that it is an effective instrument in protecting the lower paid and in combatting poverty.

Minimum wages are essentially labour market interventions used by governments, either as an instrument of political macro economics or as a social tool. Minimum wages represent the lowest levels of pay, established through a minimum wage fixing system, to be paid to workers by virtue of a contract of employment.
The concept of minimum wage can be broadly distinguished into two categories. First is the adoption of a National minimum wage which is applicable to all workers across regions and sectors, irrespective of the peculiar capacities of different industries. On the other hand, minimum wages could also be fixed in relation to different industries, as in the case of Sri Lanka in terms of the Wages Boards Ordinance. In such a situation it is envisaged that minimum wages be fixed taking into account the nature of the industry and its peculiarities.
The general objective for governments introducing minimum wage policies is the protection of low income workers, through the introduction of minimum wages based on country specific factors such as cost of living, welfare policies, labour market conditions, the inflation rate and other economic factors and trends.
There are both benefits and drawbacks in relation to the fixation of minimum wages. The benefits include reducing wage inequalities between the bottom and the middle of the earning distribution, poverty reduction, mitigating the effects of possible imbalance of bargaining power between employers and workers. On the other hand, the drawbacks are diverse. Minimum wages are widely seen as having a distortionary impact on the labour market. For example, minimum wages that are set too high can lead to unemployment among low skilled workers. Although minimum wage legislation should be applied to all workers covered, it is difficult to enforce in the informal economy. This is something that we in Sri Lanka need to take into account. The role of minimum wages in many developing countries as a means to establishing a social flow is therefore much more questionable.
According to the World Bank publication, Labour Regulations in Developing Countries A Review of the Evidence and Direction for Future Research” (World Bank, 2008) many countries try to improve the welfare of low-wage earners, through the mandating of paid minimum wages but: “Whether such a policy actually achieves the intended outcome has been a subject of great controversy for decades. Theoretical predictions of the effects of minimum wages vary, and the empirical evidence has so far yielded contradictory results, depending on the country, the source of minimum wage variation, the methods of analysis, and the assumptions required for each particular econometric framework.”
The IOE expresses the view that “minimum wages, like all policies have winners and losers that warrant the need to access carefully whether they achieved the intended objectives …. and, therefore minimum wages should not be promoted as a singular policy response.” The IOE considers that from a policy perspective, rather than consider minimum wages as the best way to tackle the challenge of low wages, efforts should be made to help enhance productivity. It also considers that this is particularly important because minimum wages could have repercussions, which lead to decreased labour market experience, diminished on the job training and skills acquisitions, decreased motivation for education attainment, reduced productivity and a vicious cycle of wage-push inflation. [7]

(iii) Minimum Wages in International Regulation
The ILO has adopted the following Conventions and Regulations:

·         The Minimum Wage Fixing Machinery Convention (No.26) and Recommendation (No.30), 1928.
·         The Minimum Wage Fixing Machinery (Agriculture) Convention (No.99) and Recommendation (No.89), 1951.
·         The Minimum Wage Fixing Convention (No.131) and Recommendation (No.135), 1970.

It is extremely important to closely scrutinize the provisions of Convention No.131 of the ILO concerning minimum wage fixing with special reference to developing countries. This Convention came into force on 29th April 1972. Article 3 of the Convention refers to the elements that should be taken into consideration in determining the level of minimum wages. It specifically refers to economic factors including the requirement of economic development, levels of productivity and the desirability of attaining and maintaining a high level of employment.

The Convention states[8] that a member who ratifies the Convention shall create and/or maintain machinery adapted to national conditions and requirements, whereby minimum wages for groups of wage earners covered can be fixed and adjusted from time to time.
The above provisions very clearly show that there is no ‘one size fits all’ approach in having or not having a minimum wage fixation policy. Furthermore, even if it is decided to have a minimum wage fixing mechanism, the Convention is very clear and provides that such a minimum wage can vary from worker to worker, industry to industry or region to region. There is nothing to suggest in the Convention that one should adopt a uniform national minimum
wage. This is clearly evident from what has been set out in Article 3 to the Convention in relation to the elements that need to be taken into account for minimum wage fixation.

The Universal Declaration on Human Rights, 1948 provides in Article 23, paragraph 3 that : ”Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection”.

The Concept of the Living Wage

The concept of the living wage has been increasingly referenced. However, the concept is problematic, especially for employers, as:

·         Basic needs of workers and their families are diverse and potentially difficult to define and measure;

·         It is not the responsibility of employers to meet the basic needs of workers. This is the role of governmental social protection policies, to which employers already directly contribute.

The second reason highlighted above is extremely important from the context of a Single Employer in the private sector. Wages cannot be directly linked to cost of living or inflation as it can be totally counter productive. We cannot expect employers with different affording capacities to increase salaries on par with COL increases.

We have noticed a progressive move towards moving out of cost of living Payments in the private sector collective bargaining agreements ever since the COL index began to change in May 2008. We do appreciate that COL and inflation do have an impact on the worker. It also has an impact on the Employer. Therefore, although it would be proper to note the increasing trends of these elements, we cannot expect wages to be increased in similar proportions. This is the fundamental issue that many people do not seem to accept.

Evaluation of the current Wage Fixation Mechanism under the Wages Boards Ordinance
The Wages Boards Ordinance is one of the oldest pieces of legislation that has been enacted for the regulation of the wages and other emoluments of persons employed in trades, for the establishment and constitution of Wages Boards and for other purposes connected with and incidental to the matters aforesaid. In terms of the Wages Boards Ordinance, the Hon. Minister of Labour and Labour Relations is empowered to establish a Wages Board in respect of any particular trade. Currently, there are 44 Wages Boards that have been established under the Wages Boards Ordinance. In terms of section 9 of the Wages Boards Ordinance, the Minister is empowered to appoint Employer representatives and Worker representatives engaged in such trade and nominate members in respect of every Wages Board.

Section 27 of the Wages Boards Ordinance makes it incumbent upon every Wages Board to take into consideration the circumstances pertaining to particular branches of the trade or particular areas and determine different rates of wages, or make such provision for workers engaged in such trades. This provision casts a huge responsibility on the part ofevery Wages Board member to be conversant with the issues and challenges relating to that industry or trade at any given time. On the other hand, the Commissioner General of Labour, being the Chairman of every Wages Board, must ensure that every Wages Board is properly guided and members are furnished with sufficient information of the industry before determining minimum rates of wages for that industry. This is very clearly implied by the obligation cast under section 27 of the Wages Boards Ordinance.

One of the criticisms leveled against the current system is that some of the industries or trades do not have Wages Boards set up and therefore, such workers are at a disadvantage as they do not have any minimum wage fixation mechanism. Furthermore, it is also pointed out that the number of Wages Boards are far too excessive and this whole mechanism needs to be restructured in a more practical and an efficient manner.

In our view, the most serious concern in relation to the current minimum wage fixation mechanism is because there is no proper direction on the part of the presiding authority in terms of giving information to members and the members appointed to the Wages Board (especially the nominated members) who have virtually “veto powers” in terms of deciding on a minimum wage have no understanding whatsoever (in most cases) of the industry or the challenges facing the industry before determining a particular minimum wage for that industry.

In other words, it is our view that it is not the mechanism per se but the manner it is being implemented which is most objectionable at present.

General Wage Fixation in the Private Sector in Sri Lanka
Wages Boards in the private sector should generally be regulated by the supply and demand theory and is dependent on market rates and the capacity of each employer. The Wages Boards mechanism that is set up under the law also complements this fact as the Wages Board is mandated only to fix a minimum wage, over and above which employers and workers can bargain and agree on wages, depending on their capacities.

In the Sri Lankan context, it is extremely important to distinguish between the “wage” and “earnings” of an employee. This distinction needs to be very clearly highlighted in the context of wage fixation in Sri Lanka. Over and above the basic wage that an employer grants a worker, on which superannuation benefits are paid, there are many other forms of incentives/bonuses/allowances which are given to employees to enhance their performance/productivity. Therefore, the concept of a minimum wage in terms of the Wages Boards Ordinance cannot be considered in isolation. We need to consider other benefits, both monetary and non monetary that are granted to employees, which form part of the total earning package.

For example, in the apparel industry, in addition to the basic wage, there are many other incentives that are usually granted, such as attendance bonus, production bonus, transport, subsidized meals, etc. All these have to be taken into account in terms of ascertaining an employee’s “earnings”. Currently, the minimum wage of a designer in the apparel industry is Rs 10,530/- plus Rs 1,000/- (BRAWA) (US $ 89 approx). excluding the other allowances and bonuses. A machine operator in Grade 3 receives a minimum wage of Rs 9,075/- plus Rs 1,000/- (BRAWA) ( US $ 78) which, once again guarantees a minimum wage of over Rs 10,000/- per month.

In addition, there are many other allowances, incentives and benefits granted to them.

The minimum wages in several Industries were increased through the respective Wages Board trades last year. In most cases, the increase was as much as 40%.

In the light of the above, what needs to be emphasized is that the stipulation of a minimum wage in respect of an industry should be done by taking into consideration the fact that employers necessarily need to grant additional benefits and payments over and above the wage to enhance efficiency and productivity. Therefore, fixing a high minimum wage will be counter productive to the entire industry.

In fact, legislation in several countries supports the view that only the basic wage is taken into account for the purpose of minimum wages. This is the case, for example, in Chile, Hungary and Malaysia[9].

International Trends in Minimum Wage Fixation
It is important for us to study systems of wage fixation in some of the other countries, although we concede that it is not possible to superimpose a particular model to suit our country’s requirements. However, one of the main drawbacks that exist in our system is the inflexibility of the definition of “wage”. Payments other than the wages, such as bonuses, allowances etc are not properly appreciated or recognized in fixing minimum wages.

On the other hand, in China, there is no separate minimum wage legislation. Gross wages have six components recognized by law. These include hourly wages, piece rate wages, bonuses, allowances, subsidies, overtime payments and the wage paid in particular cases. In addition, the law also recognizes that the determination and readjustment of the standards of minimum wages should be made with reference to labour productivity.[10] There are several minimum wage rates for different regions. In Beijing the minimum wage is 960 Yuan ( US $ 165) . In Shanghai, it is 1,120 Yuan and in Jiangxi between 500 to 700 Yuan.

In India the Minimum Wages Act provides for two alternative methods for fixing of wages at the central government or State levels. In accordance with the Minimum Wages Act, the appropriate government may set minimum wage rates for scheduled employments by appointing a committee to hold inquiries. The government must consult all relevant advisory committees before revising any minimum wage rate. Minimum wage rates can also be fixed for different skills and occupations.[11] The current national floor level minimum wage recommendation is Rs 100/- per day[12]. Data suggest that the minimum wage rates may be lower in some regions.

The minimum wage system in Pakistan is somewhat complicated although it has a National Minimum wage. The minimum wage for an unskilled worker in Pakistan is Rs 7000/- pm ( US $ 66).[13] But ,as the Punjab government web site states, Punjab state also fixes minimum wages that differ between Industries and Skills.

In Bangladesh the Labour Act of 2006 sets a procedure to fixing industry minimum wages. This statute stipulates that a Wages Board should take productivity into consideration in fixing minimum wages. The minimum wage in the ready made garment sector in Bangladesh is approximately US$ 67 per month. This wage is much less than the minimum wage in Sri Lanka applicable in the apparel industry which is approximately US$ 78 to 89 per month.

In the Philippines, regional tripartite wages and productivity boards determine the minimum wage rates applicable to agriculture and non agriculture employees in their respective regions[14]. Minimum wages are also fixed on a tripartite basis in Argentina, Thailand and Turkey[15]. Another striking feature in wage fixation in other countries is that a special procedure is adopted for wage fixation in the agricultural sector. For example, in the United Kingdom, a special procedure is adopted to fix minimum wages in the agricultural sector through the Agricultural Wages Board which is a tripartite body. However, only Scotland and Northern Ireland still have such a body as the Board for England and Wales was abolished in 2013.

On the contrary, there is no minimum labour statutory wage prescribed in Singapore. The National Wage Council guidelines are intended to be applied by all employers and employees as defined by the Employment Act. The NWC takes into account

a)      Growth in the national economy
b)      Movements in the total and basic wage rates
c)      Recent and anticipated national productivity levels.

There are special categories exempted from the NWC which are seamen, domestic workers or any person in managerial or executive grade.

In Malaysia, the National Wages Consultative Council Act of 2011 empowers the National Consultative Council to advise the government on all matters relating to minimum wages. The current minimum wage is RM 900 ( US $ 272). It is stated that this minimum wage which was stipulated in 2012 is only RM 100 more than the poverty line wage in Malaysia.[16]

In Vietnam, minimum wage rates vary according to the location and nature of the employer. An employer has the right to select the method of payment of wages calculated by reference to time (hours, days, weeks or months) or on the basis of a product produced or a completed piece of work, provided that the selected method is applied for a fixed period of time and the employee is notified of the method. In the case of State employees, the minimum wage is around VND 830,000 per month (approximately US$ 41),. In respect of employees in foreign owned companies/international organizations/foreign workers, it ranges between VND 1,100,000 to BND 1,550,000 per month (approximately US$ 55 to US$ 77).

Government intervention in private sector wages – Budgetary Relief Allowance of workers Act No.36 of 2005
The Employers’ Federation of Ceylon has consistently submitted to successive governments that uniform ad hoc wage increase should not be made to the private sector by the government. Such initiatives were taken by successive governments in the past and the last of it was through the Budgetary Relief Allowance of Workers Act No.36 of 2005.

We are pleased to note that ever since 2004 and the introduction of the government’s Ten Year Horizon Development Framework (Mahinda Chintana) of 2007 the government of Sri Lanka has made a conscious effort not to intervene in adjusting private sector wages. However, it is important to examine the consequences of such interventions. For purposes of brevity, we would wish to refer to the last piece of legislation, which is the BRAWA, which was introduced in 2005. Firstly, this piece of legislation could easily be regarded as having created the most amount of anomalies, confusion and dissention in the private sector. This legislation granted a special allowance of Rs 1,000/- to all those employees receiving a salary less than Rs 20,000/- on the condition of such an employee not having received a salary increase to that effect from October 2004 to August 2005. In other words, if an employee had already received an increase of Rs 1,000/- during this period, he or she was not entitled for it. The effect of this legislation brought about huge anomalies as employees who had been given merit increments for performance during that period were not entitled to this allowance, whereas an employee who had not received an increment or received something less than Rs 1,000/- on account of performance was brought up to the level of the employee who had already received an increment of Rs 1,000/- for good performance. This clearly demonstrates that this legislation destroyed the very essence of a performance management culture which is what needs to be introduced and developed in all Organizations, both private and public.

Secondly, even though this piece of legislation exempted employees covered and bound by Collective Agreements, there was an inherent inhibition on the part of many employers to enter into collective bargaining agreements in view of the risk of having any intervention of a wage increase in future. Here again, it shows that such intervention by the State in private sector wages creates a major obstacle for collective bargaining.

Studies done by International Organizations/Experts on setting up a Wage Policy in Sri Lanka
There have been numerous studies undertaken from time to time by international missions, including the ILO, with regard to formulating a wage policy for Sri Lanka. Some of the observations made in these studies need to be taken into account, whereas it is also submitted that certain proposals made in certain studies do not have any justification. There was a study done by an ILO mission carried out from 7th to 12 May 2007 which highlighted some important issues affecting wage fixation in Sri Lanka. Poor coverage of wage bargaining, missing link between wages and performance, need to limit the number of Wages Boards, linking wages to productivity are some of the issues that were highlighted, which need to be taken into account.

On the other hand, another study conducted by the ILO in 2008[17] caused concern to us in respect of some of the matters. This study appears to project the view that Sri Lanka has one of the lowest wages in the region and that the situation is “worrying”. We have mentioned above some of the minimum wages in the region from information given in the ILO reports.  Consequently, it is not justified to state that Sri Lankan wages ranks among the lowest in the region. The ILO studies also refer to a national minimum wage which has been rarely adopted in the countries highlighted above. It is our view that a national minimum wage could distort and create problems to certain sectors which need to be separately considered for fixing minimum wages[18].

1.      The National Pay Commission has been given a limited mandate as regards the private sector in terms of the gazette notification. In exercising this mandate, it is necessary to consult the stakeholders and their representatives before making any recommendations or proposals. This requirement is clearly in line with the ILO Convention on minimum wages[19].

2.      The Ten Year Horizon Development Framework (Mahinda Chintana) in its labour policy clearly articulates the need to enhance productivity. Employment generation is also recognized in this policy as one of the key policy directives. A counter productive wage policy or the fixing of a minimum wage can be detrimental to create employment opportunities. In other words, it could have a direct negative impact on employment.

3.      The Report of the Committee of Experts on the Application of Conventions and Recommendations of the International Labour Office, Geneva states that “neither the Convention No.131 nor the Recommendation No.135 contain provisions requiring member States either to establish a single minimum wage at national level or introduce a system based on sectoral minimum wages”.[20] Furthermore, Convention No.131 requires the effective fixing of minimum wages in the framework of a system characterized by its broad scope of application. For example, this Convention does not require the adoption of a national minimum wage, nor its determination by law[21].

4.      In the Sri Lankan context, it is extremely important to understand that employers in the private sector need to give something more than the wage in terms of incentives, bonuses, etc to ensure better efficiency and higher productivity. The most common example that can be given in this regard, which is peculiar to the Sri Lankan employment culture, are the incentive/bonus payments granted by certain employers with regard to attendance. Employees are granted payments in addition to the monthly wage simply to require them to be present at work regularly. Therefore, considering the minimum wage stipulated by law in relation to a particular Wages Board in isolation is not possible. We need to look at the total earning package of an employee in a given situation.

5.      The concept of a “living wage” and an “affordable wage” vis-à-vis the employer can be different, depending on the economic factors affecting the country. It is not reasonable to burden the employer with the responsibility of granting wages in line with cost of living increases.

6.      A comparison of minimum wages in the regions would not be prudent as the cost of living and the economic factors affecting each country would be different to each other. However, in the South Asian context it is clear that the Sri Lankan minimum wage in the apparel industry is higher than Bangladesh, Vietnam, and even in countries like India. Productivity is a concept that most countries have recognized in fixing legal minimum wages[22]

7.      The public sector wage fixing mechanism should be totally restructured and aligned to modern concepts of performance management. The inability to do so has been one of the major drawbacks for the public sector, as well as for the private sector, as it creates movement of highly skilled and competent professionals from the public to the private sector and also creates impractical expectations in the minds of lower categories of workers in the private sector.

8.      The government must never intervene in private sector wages. The Budgetary Relief Allowance of Workers Act No.36 of 2005 has created so many anomalies that are having negative effects on staff morale and performance even today.

9.      Sri Lanka needs a very broad framework on minimum wage fixation. This framework should be very simple and uncomplicated. Sri Lanka cannot afford a national minimum wage, especially in the context of having diversified sectors, such as the plantations, which contributes immensely to the economy in Sri Lanka. However, it requires a simpler model of a Wages Board mechanism with a robust system that would effectively guide the tripartite stakeholders in fixing minimum wages.

10.  Consequently, we need to look at a mechanism that would give a wider coverage and a simpler mechanism of minimum wage fixation.

EFC Proposal
The EFC submits that the Sri Lankan Private Sector needs a minimum wage fixation mechanism for lower categories of workers as envisaged under the Wages Boards Ordinance subject to a restructure of the composition of the Wages Boards. The Wages Boards trades need to be simplified and also widened in order to include almost all workers in industry excluding the white collar employees.

1.      Classification of Wages Board Trades.  We propose that the current structure of 44 Wages Boards trades be limited to the following classification :
a)      Wages Board for Services trade
b)      Wages Board for Manufacturing trade
c)      Wages Board for Plantation trade
d)      Wages Board for Hotel and Catering trade
e)      Wages Board for Wholesale and Retail trade

2.      Categories of Workers
Categorize the workers as factory/general workers – Grade 1 to 3 or classify them as unskilled, semi skilled or skilled.

What is important in the context of this proposal is that the Wages Boards should be constituted with proper representation from industry and workers. It is even more important that members nominated by the Hon. Minister of Labour and Labour Relations have a proper understanding of industry and the private sector in general. The Department of Labour must guide each Wages Board by furnishing information with regard to the different industries.

Finally, the submissions made above are not exhaustive. We would be glad to make further representations to the National Pay Commission whenever called upon to do so.

We believe that the National Pay Commission would take serious note of our submissions made above as we are a widely representative Organization of Employers representing many sectors and industries in Sri Lanka. We look forward to being consulted by the Commission in this regard. We thank you for the opportunity given  to us to make our submissions.

Ravi Peiris
Employers’ Federation of Ceylon

21st March 2014

[1] Paragraph A(iii) of Gazette Extraordinary No.1835/12 dated 05.11.2013.
[2] Business Today – June 2006.
[3] Para D of Gazette Extraordinary No 1835/12 of 5th November 2013
[4] Vide paragraph D of Gazette Extraordinary No.1835/12 of 5th November 2013.
[5] ibid Para K
[6] Chapter 11 of Mahinda Chintana
[7] General Survey of the Reports on Minimum Wage Fixing Convention, Report III (Part 1B paragraph 66)
[8] Article 4.1
[9] ILO: General Survey of the Reports on the Minimum Wage Fixing Convention.
[10] Labour Law Section 49
[11] Sec 3 (3) of the Indian Minimum Wages Act 1943
[12] Ministry of Labour Annual Report 2010-2011, Ch. 5 – Wages, 45 – 48.
[13] Labour Policy 2010
[14] ILO: General Survey of the Reports on the Minimum Wage Fixing Convention
[15] Ibid.
[16] Minimum Wages in Malaysia: People’s Perspective – Kaviyarasu Elangkovan
[17] Daniel Vaughan - Whitehead
[18] For example, the Plantation sector
[19] ILO convention No.131
[20] Paragraph 197 of the Report (2013)
[21] Ibid, paragraph 388
[22] Bangladesh, China, Philippines

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 Subject :Anuual General Meeting and Best Industrial Relations Award.. 23-01-2014 04:36:10 
Shitangshu Taye | India
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Forum : All India Organisation of Employers (AIOE)
Topic : Anuual General Meeting and Best Industrial Relations Award

The 80th Annual General Meeting of the All India Organisation of Employers was held on December 20, 2013 at New Delhi. The theme for this year’s AGM was ‘Industrial Relations: Conflict to Cooperation’.

The AGM was inaugurated by Ms. Tine Staermose, Director-ILO and Dr. G Sajeeva Reddy, President-Indian National Trade Union Congress (INTUC) was the Guest of Honour.  In her inaugural address Ms. Staermose stated that the theme for this year’s AGM is very relevant and has a clear direction towards achieving harmonious industrial relations. Innovative IR practices are the need of the time and labour laws need to reflect the evolving labour market situation and address current needs to promote job creation.

Dr. G Sajeeva Reddy in his address emphasized that industrial relations is all about mutual trust and confidence, and strike and lockout should not be treated as a weapon rather be treated as a shield. Strike and Lockouts are the main reason for creating conflict between the two parties. Speaking on the conventional working hours in India and the ratio of output, he observed that employers and trade unions need to felicitate effective working hours.

Mr. Sanjay Bhatia, Managing Director – Hindustan Tin Works Ltd. was elected as the President of the organisation. In his vote of thanks, Mr. Bhatia stated that over the years, trade union movement in India has found firm roots and employer organizations also need to be strengthened for sound democratic functioning of industrial relations. Labour and industry can build bipartite synergies to address outstanding IR issues. AIOE’s future agenda would focus on it.

Mahindra & Mahindra (Farm Division) bags the ‘AIOE Award for Outstanding Industrial Relations, 2012-13’

At the AGM, Mahindra & Mahindra Ltd. (Farm Division) was awarded with ‘AIOE Award for Outstanding Industrial Relations, 2012-13’ for its outstanding contribution in the field of industrial relations. Mangalore Chemicals and Fertilizers Ltd. and Maihar Cement Ltd. were also felicitated with a certificate of appreciation as the First Runner-Up and the Second Runner-Up for the award.

Guidebook for Employers on ‘Prevention of Sexual Harassment at the Workplace’ released

A Guidebook for Employers on ‘Prevention of Sexual Harassment at the Workplace’, developed by AIOE with the support of ILO, was jointly released by Ms. Tine Staermose, Director – ILO, Dr. G Sajeeva Reddy, President – INTUC, Dr. Jyotsna Suri, President – AIOE and Mr. Sanjay Bhatia, President Elect. – AIOE. The guidebook provides employers with practical tools and recommends important policy and procedural measures for creating a safe and sexual harassment free workplace environment for employees, especially women.

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South Asia Forum of Employers (SAFE)

OCTOBER 3 – 4 2013



The 3rd ILO/DECP  meeting in the series  was held on  3rd and 4th October 2013 at New Delhi,  to continue the process of facilitating mutual cooperation among South Asian Employers Organisations (EOs)  for further strengthening their national and regional effectiveness vis a vis their membership and the private sector as a whole in the current dynamic socio economic environment. The two earlier meetings were held in Colombo Sri Lanka in 2011 & 2012.

EO representatives from Afghanistan, Bangladesh, India, Nepal, Pakistan & Sri Lanka participated.

This meeting also took the form of a workshop and  focussed on Labour related issues in global trade in the background of the recent events in the Readymade Garment Sector in Bangladesh; which again brought to the international forefront, the fundamental link between labour issues and trade.  New policy approaches both at national and international level resulting from these events were also discussed.

Among other developments of importance in a sub-regional and national context that were discussed included:

  • The role of the South Asian Association for Regional Cooperation (SAARC) and possible “entry points” for Employers Organisations (EOs) vis a vis SAARC related activities
  • Important significant national developments in each of the employers’ organisations present
  • Role of EOs in relation to the Informal economy
  • Role of EOs in relation to Labour Migration

3rd October - Inaugural Session

Mr. Gotabaya Dasanayaka, ILO Employers Activities Specialist, South Asia welcomed the guests and participants to the Workshop. He drew reference to the previous meetings and urged SA (South Asian) EOs to make greater use of the “SAFE” interactive website for knowledge / information sharing on issues of mutual interest and concern in the overall context of intra regional EO cooperation. He thanked the Dutch Employers’ Cooperation Programme (DECP) for their continued support and its choice of the ILO ITC (ACT/EMP) as the technical collaborator.

Mr. Y.K. Modi, Past President, All India Organisation of Employers (AIOE), Federation of Indian Chambers of Commerce & Industry (FICCI) and ILO Governing Body (Employer) member made the inaugural address.  In his address he highlighted the following:

  • The nature of the challenges faced by South Asian (SA) countries in the context of demography, poverty and the importance of an environment conducive for productive employment generation
  • The example of China that has become the manufacturing hub of the world and the ability for South Asian countries to emulate that example by utilising its massive young human resource potential to build a manufacturing base
  • The need for Government policies in the SA countries to facilitate employment generating investment to ensure the creation of decent jobs and economic competitiveness within the global market
  • The need for the private sector   to play a lead role in promoting further intra-regional trade & cooperation while influencing governments on appropriate policy formulation.

Mr. Jan Karel Bout, Advisor DECP in his address, explained the objectives of the DECP, its private sector development programme and adverted to the following:

  • The economic competitive strengths of SA countries as indicated by World Bank rankings are relatively low
  • Employers’ Organisations (EOs) have a key role to play in influencing Government policies to be more conducive to investment & business and promote national competitiveness
  • For EOs to play their role effectively, they need to be strong and representative of the private sector, be professionally proficient and financially stable. Most European EOs, are examples of strong private sector lobby groups
  • Over dependence on external regional groups (EU/USA) for trade should be avoided, to reduce vulnerabilities and a greater focus put on intra-regional cooperation and stability. The recent developments in the RMG sector in Bangladesh highlight this point.

Tine Staermose, Director ILO DWT, Delhi in her address made the following observations:

  • It is very important for EOs to be up to date on information and trends related to business, to effectively deliver on their mandates. The support of the DECP in this regard is much appreciated.
  • The ILO gives special emphasis to capacity building of EOs and also Workers Organisations (WOs) – The Social Partners and also ILOs key constituents, to enable them to participate effectively in the process of national consultation on policy and its implementation.
  • In a Global Market, with developed countries calling for a “level Playing Field”, emerging economies in particular, need to be fully aware and conscious of International Labour Standards and the implications of such standards on their export potential from both a positive and negative point of view.
  • The decision of the organisers to discuss issues relating to SAARC and the likely entry points for EOS in SAARC activities is timely and EOs need to look at being more engaged in Labour & Employment related issues.

With reference to the tripartite constituency of the ILO and issues relating to its expansion in the context of “representative legitimacy” she also quoted the ILO DG (Report to the ILC 2013, Para 98) – “With the guarantees provided by improved tripartite governance processes in the ILO, it should be possible to invite non-tripartite constituents appropriately in the organisation’s work on the basis of clearly demonstrated advantage and well defined roles.  They can and do provide added value in terms of expertise and knowledge”.

Mr. Arnout de Koster, Programme Manager ACT/EMP ILO ITC in his address highlighted the following:

  • The role of the ACT/EMP programme in the ITC, to support EOs in enhancing memberships & representation, service delivery and lobby/advocacy
  • The global debate on Labour & Trade is widening. Initially it was within the WTO on having conditionality between Labour standards and trade and the subject being vested with the ILO – to promote Labour Standards and for which the 1998 declaration (Core Labour Standards) was adopted.
  • The debate has widened both in terms of actors and scope, to bilateral trade, MNEs, Consumer groups, Brands, covering not only labour relations but ethical business as a whole, including human rights.
  • It is important for Businesses to be mindful and alert to these developments and EOs have a key role to play in this regard.

Part 1


Technical Session 1

Labour – trade: from recent events to fundamental reflection on the impact of labour policies on trade/export and vice versa

New Challenges in the debate on Trade and Labour Standards

Mr. Roberto Suarez, Deputy Secretary General, International Organisation of Employers (IOE)

Mr. Suarez’s presentation titled “New Challenges in the debate on Trade & Labour Standards” is attached. It focused on:

  • The IOE, as “The Global Voice of Business” in the Employment & Social Policy field
  • The IOE structure, role & activities
  • The debate on Trade & Labour
  • The arguments relating to the debate
  • Data on Labour conditions in Asia
  • Recent trends on the subject: Approaches of different groups – Countries, regional groupings, MNEs
  • Evolving role of the ILO on Trade & Labour
  • Action for Business & EOs

In conclusion, Mr. Suarez said the debate on trade and labour will continue. The role and interpretation of International Labour Standards will be a short term challenge. Business will continue to look for safer ground of action and global references. Involving locals is a key driver for success and ILO could play an important role in using tripartite consensus at a local and global level.  Companies should lobby with stronger and intelligent communication strategies and be better prepared to anticipate and assess risks. Fighting informality is the key to success in trade policies.  The debate on global supply chains and trade need careful management. Employers’ organisations and  the  IOE can play an effective support  role in this regard.

Workers/Trade Union Perspective

Mr. Ariel Castro, Workers Activities Specialist ILO DWT for South Asia made a brief intervention on issues/challenges for trade unions (TUs) and workers in the current context, which defeat the purpose of collective bargaining.   He elaborated on problems being faced and the work that is now being done in order to strengthen their presence both in numbers and as a voice of the workers.  Some of the major practical issues faced by TUs & Workers he said included:

  • Legal & non legal (Overt & Covert) restrictions/interference regarding Freedom of Association & Collective Bargaining
  • Discrimination of TUs & Members
  • Management sponsored Unions
  • Informal employment/job insecurity - (Contract Labour/Outsourcing)
  • Suppression of rights in EPZs
  • Lack of Social Protection
  • Protection for migrant labour
  • Weakness in Labour administration

He identified the following as some key measures/activities taken by TUs to address issues/challenges:

  • At National Level - TUs and joint TU centres are active in raising issues with their respective governments
  • Membership drives
  • Sub Regional Level - South Asian Regional Trade Union Council (SARTUC) has been set up to lobby issues at sub-regional level.
  • Migration issues with Gulf country counterparts
  • ILO standards ratification campaigns
  • International Level - Global Framework Agreements (48 Agreements with Global Union Federations & MNEs)


Recent Events in Bangladesh - Intervention by Mr. Srinivas Reddy, Director ILO, Bangladesh

Mr. Reddy in his presentation focused on the following aspects:

  • The April 2013 “Rana Plaza” building collapse and its consequences including concerns relating to loss of markets and preferential trading status
  • Tripartite Initiatives to address issues – facilitated by ILO
  • Engagements / Commitments with Bilateral/Multi-lateral agencies
  • By way of lesson learnt in the context of the global market, he highlighted the importance of Safety at work, respect for International Labour Standards, good governance of value chains and importance of image.

Mr Reddy’s presentation is attached.

National Level Engagements and Internal Initiatives:  Bangladesh Employers’ Federation vis a vis recent developments

Farooq Ahmed – Secretary General & Sabrina Islam, Vice President, BEF

The RMG sector grew rapidly in Bangladesh over the last two decades. It is now the top export industry and the largest employer. Safety issues in the industry have been questionable in the past as well but no substantive measures had been taken to address issues or bring wrong doers to book. The “Rana Plaza” disaster was a wake-up call that activated not only the key stakeholders but the country and the world.

From an EOs perspective the following aspects were highlighted:

  • The Rana Plaza disaster exposed the vulnerability of the market to external pressures  on labour related issues
  • The focus of all stakeholders now is on prevention of future disasters and improvement of working conditions
  • Payment of compensation to the affected is also a priority issue
  • On the factory safety front, the primary initiative is on assessment of all factories. Three initiatives are going on:
    • Under the government agencies
    • The “ACCORD: - A buyer/Brands Initiative
    • The “Alliance” : A buyer/Brands initiative
    • The cost of assessments is a major concern
    • Consequences of assessments can give rise to new issues arising from closures, relocation, retrofitting
    • Closures will lead to job losses and need to be avoided
    • Issues have also been raised regarding Labour Laws and Industrial Relations particularly in relation to Freedom of Association and Collective bargaining
    • Certain amendments were made in the Law recently to meet requirements as per International Labour Standards and further discussions are continuing in this regard
    • The multiplicity of TUs and the political agendas of some TUs have complicated constructive dialogue and consensus building on key issues.

Group  Discussions

The foregoing provided the background for group discussions that followed. The participants discussed issues and identified strategies to be adopted by EOs in meeting Labour related challenges  in  Trade. The  strategies  identified  are set out in the summary/conclusions (Section 4) of this report.


4th October

Part 2

Developments within the employers’ organisations at national/regional level


Session 1

Short presentations were made by each country delegation regarding  the EOs/Chambers of Commerce they represented.  An overview of the developments in the respective countries and the new / significant initiatives taken were focused upon.  The Presentations made in respect of each country are attached.

Noteworthy developments and achievements in countries which were of interest to all EOs in the sub region included;

  • Responsible Business Initiatives /CSR -  Mainstreaming  of issues relating to gender equality  and persons with  Disabilities.
  • Flexible work arrangements -  Fixing  of Work Hours/Night Work in factories/BPO Sector – Especially for Women.
  • Development of National Business Agendas
  • Engagement in National Skills development Initiatives
  • Streamlining Labour Laws
  • A more professional / Strategic  approach in relation to the  media
  • Employment / entrepreneurship  generation initiatives
  • Review of minimum wages
  • Capacity Building on OSH
  • Capacity building on EO Training in Lab Laws / IR & HRM services
  • Guidance for  Foreign Investors on Labour related  issues

(Exhibitions/trade promotion/helping exporters identify best products)

  • Remuneration surveys
  • Labour Market Information
  • Engagement in Labour migration issues.  Skills recognition and development/Re-integration

While the importance of EOs broadening their mandates and or working closely with other business representative organisations  to address overall “Business” issues was highlighted during discussions it was also emphasised that National EOs need to be recognised as the focal point for business on Labour & Employment related issues.

Session 2

Eos and SAARC (South Asian Association for Regional Cooperation) -Entry points for EOs

In the context of sub regional cooperation among EOs  the opportunities  for EO  engagement with the South Asian Association for Regional Cooperation (SAARC) was discussed. The SA  Business forum that has consultative status with SAARC  is the The SAARC Chamber of Commerce and Industry (SCCI). To enable participants have a clearer understanding of the SAARC Chamber and its activities and consider options for EO engagement with SAARC, A presentation was made on the SAARC Chamber by

Mr. Goutam Ghosh, Director Head – Arab & South Asia, FICCI. The presentation made by Mr. Ghosh is attached.

Mr. Goutam Ghosh,  in his presentation gave an overview of the SAARC organisation which is headquartered in Kathmandu and its role in working for the promotion of economic and social progress and cultural development within the South Asia region and also for friendship and cooperation with other developing countries. SAARC has six Apex Bodies of which the Chamber is one and about 17 recognised bodies which engage with the SAARC Secretariat.

The SAARC Chamber of Commerce and Industry (SCCI), was formed to improve business environment, to disseminate information about possible tradeable  goods and identify potential joint ventures. To enhance intra-regional trade and enhancement was the main objective.  The constituents of SCCI are Apex National Chambers representing large number of regional and local chambers/business Associations in eight countries

FICCI (India) played a catalytic role from the very inception with the objective of nurturing and empowering private sector organizations for promoting regional economic cooperation and is one of the founding members of SCCI.  There is no Employers Federation of SAARC Chambers.  But they work through the EFs in the APEX Chambers of Commerce.

The participants recognised the importance of EOs being engaged with SAARC to address / influence  Labour & Employment issues at a subregional level in the backdrop of greater sub regional integration and viewed the subject of migration as a  good “entry point”


Discussing Entry Points/Dealing with Migration Issues

Employers Organizations and Migrant Workers

Farooq Ahmed, Secretary-General, BEF

Most SA countries, particularly India, Bangladesh and Pakistan are origin countries and have large volumes of labour moving out.  There is a small movement of labour coming in to India and Pakistan as well.  The main features of SA migration are:

  • High movement to and concentration in the Gulf and Middle East countries
  • Temporary migration of labour
  • Predominance of semi-skilled and low-skilled migrant workers
  • Large numbers of migrant workers in informal and irregular status within South Asia.  India does have a large number of migrant workers from Nepal with an open treaty
  • Growing importance of female migration. A new trend in the last decade.
  • Commercialization of the recruitment industry.

EOs have the potential to look at bringing a collective voice to improve the efficiency of labour migration governance policy and mechanisms, and support services through:

  • Engagement in national development planning
  • Promotion of Ethical Employment through counterpart associations – Destination countries
  • Engagement in the international labour market
  • Collaboration for regulation of the businesses providing recruitment services to promote transparent and accountable growth of private sector
  • Participation in professional reintegration of the migrant workers when they return
  • Developing code of ethics for local employers of the migrant workers
  • Incentives for retention – policies to help people stay back

Going forward - There is a need for a strategy planning meeting of the South Asian Employers Organizations and to have an interface with the SAARC Secretariat. Labour migration is one of the areas where EOs  can work together within the sub region and  with SAARC .

Presentation on EOs and Migrant Workers by Mr Farooq Ahmed  is attached

ILO and the Informal Economy

Thomas Kring, CTA, ILO DWT for South Asia, New Delhi, India

  • Employment in the informal economy is substantial in the sub region. It ranges between 70% - 90 % in the different countries.  Difficulties  involving definitions and also in reaching out to the informal sector poses challenges in  capturing the real extent of the  Informal Economy in Surveys.  Causes and reasons for the growth of the informal economy include:
  • Informal Economy is acting as a sponge, especially for the young people who cannot find formal sector employment
  • New Trends – Contract Labour, Outsourcing – Resulting from  competition, need to cut costs, informalisation of the formal economy.
  • Certain jobs/professions are not covered under labour laws.
  • Many enterprises have difficulty in registering.  The  process is costly,  takes too long and there is no incentives for registration.

The Objective of ILO is to reduce decent work deficits  in the informal economy through formalisation; by encouraging enterprises  to transfer  from the informal to the formal, ensure that new entrants to the labour market are registered into a formal economy, create sufficient  employment opportunities within the formal economy.

EOs could play  a key role in facilitating  formalisation. The role of EOs can include;

  • Support formalisation of enterprises through awareness raising, facilitating  enterprise registration
  • Lobby governments for improved business environment for MSEs
  • Engage with government  on policy formulation

The participants  recognised the importance of the subject from the point of view on productiviy and competitiveness as well and emphasized on the need for flexible Labour Markets to promote employment creation in the formal sector. References were made to the rigidities in the Labour Market and to the national rankings in the WB and IFC  Indices  on “ Doing Business” and “Competitiveness”.


Presentation on ILO and the Informal Economy is attached

Session 3

ILO-ACTEMP  / ITC:  CRM Database and OSH Initiative

Arnout De Koster, ITC-ILO Programme Manager

CRM Database

The membership database is a project being developed by ITC/ILO (ACT/EMP) with the support of the DECP.  A Customer Relationship Management (CRM) Database is a useful tool for EOs for greater professional and strategic management of the membership and their needs.  A brief practical demonstration on how content is created in the system was given.

Participants  were requested to contact Mr De Koster or the ILOs sub regional Employers Specialist  for more information in this regard.


Occupational Safety and Health (OSH)

A new training tool on OSH developed by the ILO-ITC (ACTEMP) was also presented.

From an EO point of view this tool could be useful in expanding  the scope of OSH training to member  and non member companies.

It has  25 learning modules with general concepts on health and safety, not for specialists, but focusing on workers and supervisors.  It is a modular and customizable approach.

The tools include , a DVD a  number of films which are  easy to use and a USB Key and a trainer guide. Each module is composed of a number of films and animations, brief printable documents, etc.

The first TOTs under this programme have been planned for end 2013  and will include participants from EOS in the SA sub region as well.  EOs interested in this training product should contact  Mr De Koster or the sub regional Employers activities specialist.


Session 4

Summary and Conclusions

Based on the two days of discussions / interactions:


  • The use of the SAFE website was encouraged in order to share experiences.
  • EOs and the  ILO will consider initiatives for EO s to engage with SAARC
  • A follow up EO meeting on labour migration issues was  suggested  for 2014. Migration can be looked upon as entry point for EOs on SAARC.
  • Re. The new initiatives  undertaken by ILO – ITC (ACTEMP) – The CRM database and the OSH training package, those interested can contact ILO/ITC (ACTEMP) and / or the ACTEMP sub regional Employers specialist


Based on the participants group discussions on day  one in relation to specific questions:

  1. What can EOs do on  Labour Related Trade issues  with Particular reference to OSH for:
  • Facilitating a risk free environment
  • Anticipating issues
  • Addressing issues that arise

The three aspects are inter-related.  The best means of remedy is prevention.

  1. Awareness creation among businesses on Labour/Trade related Issues – E.g. ILS, OSH, Working Conditions etc. Context of Trade related developments in the Global market, Labour standards, Global Compact and other related initiatives at Global and Regional levels
  2. Develop tools/methodologies for Risk assessment in different areas compliance Audits in different areas
  3. Public Relations and Media Strategies for promotion of risk free environment and handling related issues.
  4. Studies on long term prospects for Industry (Sector based) in global environment
  5. Engage with governments, workers, international agencies – all stakeholders
  6. Preparedness in response and rehabilitation measures in crisis situation


Identified  Interventions

  1. Provide Labour/Standards, working conditions, OSH related services for members
  2. Develop Codes of Conduct for ethical business standards by members (EO Value System)
  3. Provide direct services for better compliance in relevant areas
  4. Provide guidance through publications/websites to business/investors on national/international laws/standards

Summing  up  further Mr  Dasanayaka said:

“Listening to Roberto (IOE) about the developments in the world, especially about the strategies adopted by the different groups internationally,  EOs must at national level  think about and know what groups countries deal with, who is our biggest trading partner, where do we export most?  Is it to the USA, the EU or other countries?  Roberto even referred to the strategies adopted by New Zealand and Chile in   trade in relation to Labour.  EOs  must be aware of what  the issues are  and how  we react?  More over,  EOs need to educate the  business communities. Because  many  business people work in cocoons and feel they can operate at national level  without a proper understanding and appreciation of the pressures  when it comes to a  “level playing field” at global level”

He  thanked on behalf of ILO ACT/TEMP, the  DECP, Mr Jan-Karel Bout in particular, for continuing to support this initiative together with ITC and giving SA EOs  a forum to exchange views identify  meaningful strategies for their growth and stability at national and regional levels. He also extended his thanks to the ILO ITC (ACTEMP) and all the participants for  a successful workshop.

Mr Jan-Karel Bout thanked Gota Dasanayaka and the ILO New Delhi for organising this workshop.  He recognised Mr. De Koster’s special efforts with the two initiatives he is promoting for the EOs in SA.   He  looked forward to hearing comments from the participants about how the meetings can be improved.  He said, “Concentrate on Business and Organisation and creating a  good environment for companies, all else will follow automatically.”

Mr. Syed Saud Alam, EFP on behalf of participating countries thanked the DECP, Mr. Bout, ITC/ILO, Mr. Arnout De Koster and Mr. Gota Dasanayaka, ILO ACT/EMP and others connected with the organisation of the workshop and looked forward to further fostering EO cooperation in the sub region.

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