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Sri Lanka: unions protest government’s debt restructuring and labour law changes

25 July, 2023Despite heavy rains Sri Lankan unions held a protest in Colombo, on 25 July, against the proposed anti-worker labour law amendments and domestic debt restructuring plan which involves using the hard-earned provident fund amounts of workers and implementing anti-worker labour law amendments.

The government’s decision to introduce the domestic debt restructuring plan, part of the “bailout” package from the International Monetary Fund (IMF), which involves using the hard-earned provident fund of workers, comes at a time when working people of the country are already living under terrible conditions due to extremely high inflation and currency devaluation, which has led to a significant decline in their real income.

In the debt restructuring process to ensure 'debt sustainability' which is IMF's major concern , the major burden will be borne by working people of Sri Lanka given debt relief from international sovereign bond holders which includes multilateral development banks, is only 35 per cent.

Under the domestic debt optimisation, treasury bills held by the Central Bank and the treasury bonds held by superannuation funds, including the Employee Provident  Fund and Employee Trust Fund, will be used to restructure the debt by lowering the interest rates charged on these bonds. However this move only covers a small portion with about 61 per cent of the total domestic debt excluded from the program including borrowings from domestic commercial banks. 
Anton Marcus, joint secretary of IndustriALL’s affiliate Free Trade Zone and General Services Employees Union, voiced his concern, stating,

“Through this move, the government is trying to put the entire burden on the working class of this country. This is unacceptable. Trade unions have asked the Governor of the Central Bank of Sri Lanka in a joint letter to convene a meeting with all of the unions to review the pros and cons of the plan.”

In June, four trade unions including IndustriALL’s affiliates, were removed from the reconstituted National Labour Advisory Council. This happened amidst the government’s  attempts to pass anti-worker labour law amendments. The proposed amalgamation of 48 labour laws into a single one has raised concerns among unions, as it could abolish  internationally recognised standards regarding working hours, overtime, freedom of association and collective bargaining, potentially leaving workers vulnerable. Employers may also gain the authority to terminate workers for organizing and forming unions.
Swasthika Arulingam, president of IndustriALL’s affiliate, Commercial and Industrial Workers’ Union, stated,

“The changes proposed to labour laws by the Sri Lankan government to labour legislations significantly erode workers' rights and remove any protection they may have had under the previous laws. Moreover, by excluding independent unions from NLAC, it’s clear that the government wants to weaken workers’ representation and disempower them.”

Kemal Özkan, assistant general secretary of IndustriALL Global Union, expressed solidarity with Sri Lankan affiliates, urging the government to withdraw the controversial labour law reforms and protect workers’ savings from being used for debt restructuring.