The NEXT apparel fiasco has focused attention on issues of Unionisation and job-security. Apparently, the two issues seem to be severely at odds in Sri Lanka. If recent reports are accurate, it appears that NEXT apparel manufacturers were based in Sri Lanka since the 70s, and decided to pack up and call it a day after Unionisation made unhealthy inroads into company Management, rendering the entire manufacturing operation untenable.
If these reports are correct — it must be mentioned that they have been all over the media since NEXT closed down, and have at the time of writing not been denied — this is the worst time that Union agitation should get in the way of investment.
Rampant Unionisation is the bane of a country that seeks growth as an imperative. We, as a nation, have serious business to take care of, and that is by way of understatement.
If Unions create the common impression that Sri Lanka is a difficult country for investors, our own-goal in encouraging rampant Union-based pressure on industry, will be extremely costly indeed.
If Unions succeed in making the employer’s enterprise untenable, the Unionists haven’t succeeded, they have miserably failed. Moreover, they have let down the Union membership.
But it appears that appeasing Unionism is par for the course in this country. Of course, worker rights are romanticised, and policymakers sometimes thrive on a platform of championing the cause of the employed.
This is good in theory, in any country that has enough industrialisation to ensure that most workers are employed. But Sri Lanka is struggling to meet growth-rate expectations, which means we are collectively keeping our heads just above the waterline.
ABSTRUSE
When we need all the foreign investments we can attract, in comes a Unionist with such missionary zeal that he succeeds in getting the entire enterprise that his worker colleagues are employed in, shut down.
This is a recipe for economic development that’s made in hell. It is a Union-model that we in this country cannot sustain, and should never dream of encouraging.
The counter to all of the aforementioned would be, whither worker rights? Didn’t we encourage an oasis of respect for worker rights, when those such as A. E. Goonesinghe and the old-Left led by stalwarts such as Colvin, Peter, NM and Leslie made sure that workers would be respected in this country, and that they would not be ridden roughshod over, nor sacked upon the whim of the management, while having a handsome gratuity to retire on, and so forth?
Yes, of course, we had that vision of worker Utopia from the time we won Independence. However, where did it get us? It seems it got us to a point where we kept steadily strengthening workers’ rights to the point we made it untenable for managements to profit from their businesses.
In less abstruse terms, it meant that we got caught up so much in this business of ensuring the rights of those that are employed, that we forgot about the unemployed altogether.
The NEXT closure also underscores the fact that we, as a nation, cannot rely on foreign investments, particularly in sectors such as garments. These businesses are subject to the vicissitudes of the global-market and a myriad other factors. They are the people that provide employment and provide sustenance not only to employees but also to an ailing economy. If the Unionists insist on rights for the workers and as rumoured, are sitting in on negotiations with foreign suppliers that would be the fast-track to getting entrepreneurs to close shop as fast as they could.
While on the subject, the labour laws are a sticking point as well. Across the board, labour laws in Sri Lanka have been far too employee friendly to enable a dynamic, functioning industrial sector that would sustain a growing economy.
That is this writer’s considered view. Others may beg to differ, but in this writer’s opinion being too concerned about worker rights is a blight as far as growth is concerned, and the sooner this fact is acknowledged the better.
Sri Lankans cannot have the cake and eat it too. A concomitant of economic growth — especially when an economy is recovering from dire straits — is to take a pragmatic attitude and seek to have no illusion about a perfect record of worker rights and worker safety.
The problem with seeking such a perfect record is that it leads to the opposite of what is intended. If ensuring workers’ rights is intended to make policymakers popular, the problem with that is that when those such as the NEXT people leave, and jobs are lost, it makes policymakers far more unpopular than if they appear to be iffy on worker rights in the first place.
Can an attitude that doesn’t take into full cognizance so-called worker rights be characterised as caving into multi-nationals such as the NEXT people? That’s why it was stated in the preceding paragraphs that we cannot have the cake and eat it too.
Though detractors may try to paint sincere actors trying hard to keep overseas-based entrepreneurs in Sri Lanka — as opposed to leaving Sri Lanka — as ignoring worker rights, the fact remains that those who face reality are more concerned about the country and economy than those who don’t.
Sri Lanka’s employer unfriendly Unionisation zeal coupled with patently anti-business labour laws is a bane, not merely to foreign employers but local entrepreneurs as well. Some of them have in fact based themselves out of Sri Lanka because the country’s pro-worker orientation makes it difficult for them to turn in profits in difficult times when the entire economy is on a recovery mode. They are keenly aware that having business take off and succeed is far from easy in a post-Covid-19 global market that’s competitive and unrelenting in destroying weaker and uncompetitive players.
Does this mean that employers are always right and that most employers are fair and are merely trying hard to turn in profits while the employees are generally pesky disruptors? No it does not. Sometimes, employers are being ruthless and insensitive and are certainly not doing right by the workers. But the world is simply not a fair place, and certainly isn’t so in difficult situations.
A brash and insensitive owner-proprietor who provides jobs, is better than one who moves abroad and provides jobs to people abroad. The paradox of economic growth is that it rewards the greedy to a great extent but that if it doesn’t reward the greedy, the others usually get nothing.
Utopiais
This is not to say that all acts of selfishness by owners ought to be tolerated. But in the main, in particular when an economy is desperately trying to grow, over-reliance on noble ideas such as a worker-rights Utopiais essentially suicidal.
It is elementary that such notions are counter-productive in contexts of desperately recovering economies. Of course, the writer is not in full possession of the facts with regard to NEXT and the relevant factory closure.
But if the reports that are circulating in general are correct, the Union issues had something to do with the decision to move out. The writer cautions that even the owners may not acknowledge this fact in public as there are obvious reasons such as outstanding obligations to workers, and all the attendant ramifications.
But on the grapevine, there is reliable news that the Unions overplayed their hand and that worker-rights issues eventually tilted the balance in favour of the factory terminating operations.
Whatever the facts may or may not be with regard to NEXT, as a general rule of thumb, Unions overplaying their hand in our delicate economic context is critically damaging to our prospects for growth.
Overtly employee-friendly labour laws are also generally a bane as damaging as disruptive Unionisation, even though it is acknowledged that phasing out these laws effectively while not trampling on all worker rights, takes time and some diligent planning.
