An Echelon Media Company
Friday February 23rd, 2024

Sri Lankan women discriminated against because of Mat Leave benefits – Verité

ECONOMYNEXT -Sri Lanka’s women between the ages of 20-40 are most likely to be unemployed because hiring them is expensive for the private sector, mostly because employers have to bear the full cost of maternity leave benefits (MLB) Verité Research has found.

Verité, a Colombo based think tank and research body said that this is a problem unique “in terms of opportunities for young women to effectively participate and contribute to the labour force.”

Dr Nishan de Mel, head of Verité said they discovered the issue during research into finding solutions to reduce youth unemployment in the country.

“One of the things we investigated was the laws and rules governing employment requires employers to pay 12-week MLBs however there is no equivalent paternity leave which means hiring women between the ages of 20-40 becomes more expensive in the private sector,” De Mel said.

A law in Sri Lanka mandates that the employer provide 12-week maternity benefit which is a 3-months fully paid leave. However, the country does not have paternity leave.

Sri Lankan women only participate at half the rate of men in the labour workforce and their unemployment rate is twice that of men and their disadvantage increases when they enter this age group while they only secure 30 per cent of the jobs in the private sector compared to 45 per cent in the public sector.

If there was a paternity leave as well, De Mel says the outcome would have been equal.

Verité Research in partnership with YouLead-USAID’s Youth Employment and Business Start-up program conducted this research as part of USAID’s initiative to reduce youth unemployment in the country.

Women’s disadvantage increases when they enter this age group while they only secure 30 per cent of the jobs in the private sector compared to 45 per cent in the public sector.

According to Sri Lanka’s Annual Labour Force Survey published in 2018, women in the 20-40 age group are 6.6 times more likely to be unemployed than women outside this age group.

The Department of Census and Statistics, Labour Force Survey Annual Report 2018 indicates that out of the 4.4 per cent unemployment in the country, 208,667 or 7.1 per cent are women. Unemployment rates for specific ages groups – 20-24 is 29.4 per cent female (14.7 per cent male), 25-29 is 19.8 per cent female (5.4 per cent male) and 30-39 is 5.9 per cent female and 1.4 per cent, male.

According to a Labour Demand Survey (2017), 41 per cent of the employers out of 3,500 private sector entities had claimed that “maternity leave and working hour relaxation” is a factor they consider when recruiting.

A recent World Bank report suggests the following main factors as hindrances to women’s participation in Sri Lanka’s paid workforce: marriage, childrearing, and related household chores that fall disproportionately on women.

Globally, the gap in female participation in the workforce has closed 57.8 per cent according to the Global Gender Report of 2020 by World Economic Forum. Women holding senior managerial posts has increased 2 per cent to 36 per cent in the private sector and public sector.
“Despite this progress, the gap to close on this aspect remains substantial as only a handful of countries are approaching parity,” said the report.

A state-supported maternity leave benefits

In Sri Lanka, gender parity is also a factor to raise its gross domestic product (GDP) by as much as 20 per cent in the long run by closing the gender gap in the workforce, an IMF assessment of Sri Lanka’s program said in 2018.
“For Sri Lanka’s economy to grow, it needs to maximize the potential of its workforce.”

Verité Research proposes that to reduce these disadvantages the government should set off the exorbitant cost borne by the private sector via tax incentives.

1. Tax relief for MLBs translate into positive economic and labour market outcomes.
Increased female participation in the labour force will increase income flow into households
and cushion post-Covid19 job-losses.

2. Tax relief for MLBs cost less than other welfare initiatives. Based on 2018 data, Verité
Research estimates the annual cost of MLBs to be LKR 4.2 Billion. This amounts to
approximately 0.25% of tax revenue. In contrast, Samurdhi subsidies amounted to 2.3%
(LKR 39.2 Billion) of tax revenue.

3. Tax relief for MLBs is more cost-effective than the government’s recent initiative to
boost employment. Verité Research estimates that the government’s plan to recruit 160,000
workers will cost approximately LKR 58.67 Billion annually. State-supported MLBs will
boost the employment of women for less than one-tenth of this cost.

4. State support for MLBs is consistent with existing MLB practices across the world. 129
states either fully (96 states) or partially (33 states) fund MLBs.

5. The 2019 budget included a proposal for the state to partially support MLBs through
tax deductibility, but the proposal was not implemented. Subsequently, the tax cuts
implemented at the beginning of 2020 were worth LKR 52 Billion – ten times the value of
tax concessions necessary to support MLBs. Yet the opportunity to structure these tax
concessions in a manner that would fund MLBs was lost.

Society and the state have an obligation to ensure that women have equal opportunities in the labour
market.

While employers must bear the cost of MLBs, women will continue to be disadvantaged.

The state can boost female economic participation and combat this unfair disadvantage against women
in the 20-40 age group by including MLBs in the forthcoming 2020/2021 budget, Verite proposed.

(Colombo, October 1, 2020)

Reported by Mahadiya Hamza

Leave a Comment

Your email address will not be published. Required fields are marked *

Leave a Comment

Leave a Comment

Cancel reply

Your email address will not be published. Required fields are marked *

Sri Lankans may need to wait for Monetary Board meeting minutes despite new Act

ECONOMYNEXT – Sri Lankans may have to wait more time to read the meeting minutes of the Central Bank’s Monetary Board, a top official said, despite a new act that has made the central bank to be more transparent and accountable for its decisions.

Many central banks including the United States’ Federal Reserve, India’s Reserve Bank, and Bank of Mexico release the minutes of their monetary policy meeting to ensure transparency.

The new Central Bank Act passed by the Parliament in line with the guidance by the International Monetary Fund (IMF) includes measures for Sri Lanka’s central bank to be more transparent and accountable.

These measures include releasing the Monetary Policy Report every six months and the first such report was released on February 15.

However, the central bank has not taken a decision to release the minutes of the Monetary Board meetings on the monetary policy.

“Going forward, one day this could happen,” Chandranath Amarasekara, Assistant Governor at the Central Bank told reporters on Wednesday (21) at a media briefing.

“Right now, we have just started working on the new Central Bank Act. We are not there yet. There is no such decision on releasing minutes yet.”

The central bank in the past printed billions of rupees to keep the market interest rates artificially low and provide cheap funding for successive governments to propel a debt-driven economy.

It’s decision, however, led Sri Lanka into an unprecedented economic crisis in 2022 with sovereign debt default.

It also propped up the rupee currency artificially in the past to maintain a stable exchange rate at the expense of billions of US dollars. The move also contributed for the economic crisis and later the central bank was forced to allow over 60 percent depreciation in the rupee in March 2022.

However, none of the top central bank officials was held responsible for wrong decisions to hold interest rates artificially low with money printing and propping up the rupee. (Colombo/Feb 23/2024)

Continue Reading

Amid mass migration, Sri Lanka to recruit volunteers as English teachers

ECONOMYNEXT- Sri Lanka is planning to appoint foreign and expatriate volunteers to teach English for Sri Lanka students, the Ministry of Higher Education said, amid thousand of teachers migrating to other countries after the island nation’s unprecedented economic crisis.

Over five thousand teachers have left the country with the Education Ministry permission using the government’s circular of temporarily leaving state jobs while tens of thousands of teachers have left the country without informing the relevant authorities, Education Ministry officials say.

That had led to an acute teacher shortage in the country.

Suren Raghavan, the State Minister for Higher Education said the shortage has aggravated because most of the graduates who have an English degree become writers and join the private sector due to higher salary.

“They do not join government schools. This is a problem all over the country which is why we need to have an online system,” Raghavan told EconomyNext.

Separately he said on Thursday at a press conference that he had spoken to Canadian and Australian High Commissions to get the assistance of where their English teachers who have experience in teaching English as a second language in South Asia.

He also said that there is a number of teachers in the Unite Kingdom have shown interest in teaching English and they have experience in teaching in other Asian countries such as Burma and India while the teaching would be done free of charge.

The new move also comes at a time when the country’s English literacy rate is on the decline, according to the Minister.

President Ranil Wickramasinghe announced the English-for-all initiative three months ago with plans to improve English literacy at school and university level. (Colombo/Feb 23/2024)

Continue Reading

Sri Lanka tea production up 1.4-pct in Jan 2024, exports up 6.8-pct

ECONOMYNEXT – Sri Lanka’s tea production was up 1.4 percent to 18.73 million kilograms in January 2024, with high growns falling and low and mid growns rising, industry data shows.

High grown tea in January 2024 was 3.56 million kilograms, down from 3.36 million, medium growns were 2.6, up from 2.5 million kilograms and low growns were 12.56 million, up from 12.32 million kilograms last year.

Exports, including re-exports were up 6.88 percent to 18.76 million kilograms, industry data published by Ceylon Tea Brokers show.

Export earnings were reported at 102 million US dollars, up from 99.5 million dollars last year. The average FOB price was 5.45 US dollars a kilo down from 5.67 dollars last year.

Tea in bulk was 8.5 million kilograms valued at 12.79 billion rupees, tea in packets was 7.8 million kilograms valued at 13.1 billion rupees and tea in bags was 1.8 million kilos, valued at 5.06 billion rupees.

The top buyer was Iraq with 2.5 million kilos, up from 2.1 million last year followed by the UAE with 1.99 kilos, up from 1.86 million last year.

Russia bought 1.98 million kilos, down from 2.0 last year, Turkey bought 1.72 million kilos, from 2.3 million last year, while Iran bought 1.32 million, up from 614 million last year. (Colombo/Feb23/2024)

Continue Reading