Sri Lanka deal on partial Coronavirus wages with EFC to continue till September

ECONOMYNEXT – An agreement with the Employees Federation of Ceylon and authorities for its members to pay 14,500 rupees or 50 percent of wages of workers made excess by the Coronavirus pandemic would continue till September, Information Minister Bandula Gunewardene said.

The EFC makes up most of the larger firms in the country.

Sri Lanka’s Labour and Foreign Minister Dinesh Gunewardene had struck the deal for May and June after many companies got into financial trouble and were looking to lay off workers, he said.

The deal was done to avoid mass lay-offs and collapses of companies, he said.

“Many firms were able to pay April salaries with remaining cash,” Gunewardene said. “But they are now borrowing to give salaries. This agreement will safeguard jobs.”

Under the deal EFC members will pay 50 percent of the salary or 14,500 rupees, whichever is greater for workers who are sent on leave or work a few days.

Many factories and workplaces have to operate with a smaller number of workers due to social distancing rules.

Sri Lanka has no laws to furlough employees or lay-off quickly. Firms generally stop hiring or have voluntary retirement plans.

The latest data show a strong recovery in the manufacturing sector but services are weak, according to a Purchasing Mangers’ Index compile by the central bank.

Labour contracts that are expiring are not renewed. (Colombo/July17/2020)