Biz leaders call for dispute resolution mechanism | Sunday Observer

Biz leaders call for dispute resolution mechanism

Handling strike actions of trade unions by the authorities to avert the loss of billions of rupees to the economy due to the waste of valuable man hours, that could be put to productive work, needs more competency in human resource knowledge and management for effective dispute resolution, top corporate sector personalities said while urging policy makers to

apply the Industrial Dispute Act to the public sector as well.

Think tanks, industrial and corporate leaders are baffled as to how stability could be restored in the country leave aside achieving the economic targets envisaged for the future when strikes are a regular feature in the country, a worrying factor for foreign investors whose investments have slowed down during the past years.

The recent railway strike is estimated have caused losses of billions of rupees to the economy though the exact loss cannot be quantified, transportation sector experts believe.

Therefore, business leaders call for the creation of an effective dispute resolution mechanism to create a better climate for industrial relations in the country.


Company Director and Consultant Sunil Wijesinha said although strike action is a fundamental right, there is responsibility cast on both sides on how such action is instituted without collateral damage.

The ideal situation is to create a better industrial relations climate. It appears today that there are relatively less strikes in the private sector and more in the state sector.

A fundamental issue is that the Industrial Disputes Act does not apply to the public sector.

In the private sector we have collective agreements with specified terms and conditions including a dispute resolution procedure.

There are further mechanisms of arbitration and also compulsory arbitration where the Minister of Labour can refer an unsettled dispute to compulsory arbitration and the moment he does so the strikers have to return to work.

Disputes’ when they arise are argued or negotiated between Unions and employers’ sometimes with professional assistance of lawyers or the Employers Federation of Ceylon. Of course there are instances when they escalate due to the obstinacy of the Trade Union or the employer.

However, in this more enlightened age most private sector organisations have implemented policies and strategies to make the working life of employees more fulfilling and to compensate workers adequately in financial and non-financial terms.

Further, many organisations have adopted methods of engaging employees thereby providing a good and enriching working environment. Good private sector organisations will have a competent Human Resource function which will have their ears to the ground so that early signals of discontent are detected and remedied.

It appears that the state sector needs to upgrade it’s competence in Human Resources knowledge and implement mechanisms for dispute resolution. A paradigm shift is required by the Government as well as Public Sector Trade Unions.

Financial incentives

Performance related pay or financial incentives could play a significant role in avoiding strikes. During the disturbances of 1989 many Government offices were hardly working even when they were open because obviously the environment was not conducive.

But the staff of the ETF was hard at work because of the monthly incentive scheme. On the other hand the staff of a Government Department in the same building were quite relaxed.

A visiting government official was surprised to note how the ETF staff were hard at work while only the fans in his Department were working. That was the power of a performance-related incentive scheme at ETF.

Shippers’ Academy Colombo CEO Rohan Masakorala said strikes create massive non-tangible disruption to an economy which will have a long term impact to a country. It sends negative signals to the rest of the world, making it a non attractive destination for investors. Economic stability is a major factor to drive investments. It is a confidence building tool.

Ad-hoc basis

Trade unions use strikes as a means to create instability and cripple economic activities. The government is too soft and acts on ad-hoc basis when it comes to handling strike. We don’t seem to reflect a middle income country when you look at labour union action.

If strikes continue it will have an adverse impact on economic growth targets. If trade union actions are based on political agendas and cause continuous disruption to the daily activities of people, the countries vision of being an upper income country by 2025 will not be a reality.

The government has to communicate this to the masses and be more organised and strong to handle such situation as the ordinary man in the street will be with the leaders who take strong action against unfair demands.

Colombo Stock Brokers Association President Ravi Abeysuriya said the economic cost to the country due to wildcat strikes and frequent street protests are enormous considering the damage they cause to the image of the country particularly to foreign investors and disruption to daily activities of people.

While it is acknowledged that it is the democratic right of the people to express their views and protest peacefully, it should not be carried out in a manner that disrupts the free flow of traffic that hamper other economic activities and essential services such as transportation of patients to hospitals.

The way forward would be to make it mandatory for unions to negotiate their demands exhaustively with the authorities first and then resort to strike action as a last resort.

Authorities and the subject minister should be held accountable to hold fair and transparent negations with the unions so that if the unions resort to strike action for unjustifiable and unfair reasons, public condemnation could be made of such unions through the media.

The government should allocate locations such as the parliamentary ground for those who wish to agitate so that democracy and economic activities can function smoothly.

Economic growth and productivity

Chevron Lubricants Lanka PLC Managing Director and CEO Kishu Gomes said a country’s economy revolves around its workforce and there is a direct relationship between economic growth and productivity of the workforce. In the recent past we have seen a trend of many government institutes, departments and corporations staging strikes on various issues demanding things at critical times when such organizations do have the biggest demand.

As for the railway workers abstaining from work at a time when O/L exams are held and the workforce in the public and private sectors trying to complete the year-end workload to be able to enjoy a well-deserved break by all means is highly unreasonable under any circumstance.

When such mobility issues emerge the traders who invest money to benefit from the seasonal demand for various related products have to suffer severe loses. To add to this, the mood and tone of the people change completely when such crisis occurs resulting in the drop in productivity having to waste time following up on the developments of the issue and talking about it at length. While quantification of the direct and indirect loss is not scientifically possible we all know that it costs billions to the economy – how many billions we may not know.

Given the backdrop of protests staged by the different organisations its evident that there are inherent anomalies and mismatches in terms of compensation and benefits across various departments and corporations.

Hence, the government should take a proactive stance to ensure all issues are dealt with, once and for all to be fair by everyone so that it will be equity across the organizations. This will prevent the unions from staging strikes over anomalies and discrepancies which have been the bone of contention for public sector protests.

Reaching a consensus with all the parties in Parliament, will certainly help the country’s economy and hence all parties should collaborate on this in the best interests of all Sri Lankans.