By Yakuta Dawood
Despite concerns raised by the private sector with regard to the Budget proposal of increasing the retirement age, the Government is in the process of incorporating the proposal into all the relevant acts, including the Employees’ Provident Fund (EPF) Act, The Sunday Morning Business reliably learns.
[caption id="attachment_116942" align="alignleft" width="300"]
Prime Minister and Minister of Finance Mahinda Rajapaksa delivering the Budget 2021 Speech in Parliament [/caption]
Treasury Secretary S.R. Attygalle told us that the required measures to implement the proposal have been taken, and the Ministry of Finance had informed the Ministry of Labour about the necessary changes to the acts.
[caption id="attachment_116940" align="alignright" width="141"]
Treasury Secretary S.R. Attygalle[/caption]
“We have given our amendments to the Labour Ministry, and the Minister is attending to that. The Labour Minister is preparing a special act, so to speak, which would override the present acts. As there are several acts that could be impacted when we make these changes – for example, the EPF Act outlines the age for retirement benefits – the Labour Minister is going to draw up a special provisions act,” Attygalle added.
All attempts to contact Minister of Labour Nimal Siripala de Silva for comment on Thursday (28) proved futile.
When announcing the Budget 2021, Prime Minister Mahinda Rajapaksa, who is also the Minister of Finance, stated that having two different compulsory retirement ages for men and women cannot be justified. He added that the compulsory retirement age for the public sector is 60 years, whereas it is 50 years for the private sector and is lower for females. “Contrary to this, the life expectancy for females is 76.6 years, and it is 72 years for males. Therefore, based on the life expectancy, it is proposed to amend the Employees’ Provident Fund Act to expand the retirement age for both men and women up to 60 years. I wish to also bring to your notice that at the time of the adoption of the Employees’ Provident Fund (EPF) Act, the life expectancy for females was as low as 57.5 years and the life expectancy for males was 58.8 years,” Rajapaksa had added.
However, we reliably learnt that the private sector was not in favour of this proposal. When we asked Attygalle whether the Government will take into account the concerns of the private sector, he added that he does not think anybody – employees or employers – will oppose this move.
“The Department of Labour can consult the people and make the amendments, because when you prepare an act, anyone can challenge that in the court,” Attygalle added.
The Sunday Morning Business spoke to Employers’ Federation of Ceylon (EFC) Chairman Kanishka Weerasinghe in this regard. He stated that one of the reasons why the private sector is opposing this act is due to the current challenges in recruiting the younger generation to the industry.
“Currently, youth unemployment is at 19% and female youths account for around 26%. Hence, there's something wrong there. We need to attract younger people into the organisation, and that is not going to happen by prolonging the employment of the older generation.”
According to Weerasinghe, the private sector is not in favour of this act due to several reasons such as the burden to bear costs and its ability to afford it, commercial cycles, and also organisational human resource requirements.
In addition to these, he shed light on another concerning issue, sharing that as there are an excessive number of workers who are above the retirement age, it would be impossible to retain them all if the act is established.
When inquired if the concerns had been communicated to the relevant ministries, Weerasinghe stated: “We have made our views known. I believe if there are further discussions, it will have to take place with the Minister of Labour.”
We also spoke to National Chamber of Exporters of Sri Lanka Secretary General/Chief Executive Officer (CEO) Shiham Marikkar, who said that the official request on paper will be sent to the relevant ministries by early next week. “The proposal will say that the exporters are requesting them (authorities) to revisit that particular proposal, as it will have adverse effects on the export sector.”
Explaining further, Marikkar also shared Weerasinghe’s sentiments on the impact on youth employment. Exporters want youths on board so as to increase productivity and innovation by fostering new ideas to compete in the international market, he shared.
Generally, in the private sector, employees are recruited based on company policies with regard to employment on a contractual basis which has the flexibility to retain employees with high productivity beyond the retirement age (done on mutually agreeable terms). Accordingly, the minimum age of a male employee is 55 years and for females it is 50 years.
However, Marikkar emphasised: “Exporters are requesting the authorities to not introduce a policy in this regard, but to leave things as they are, where the employer and employee, on mutual understanding, can adopt the general contract procedure.
“At the end of the day, the employer should be able to decide. If the retirement age has been exceeded and the employer wants to retain the employee, they should be allowed to do so via a special agreement. Hence, we request that the proposal not be implemented,” he added.
Prime Minister and Minister of Finance Mahinda Rajapaksa delivering the Budget 2021 Speech in Parliament [/caption]
Treasury Secretary S.R. Attygalle told us that the required measures to implement the proposal have been taken, and the Ministry of Finance had informed the Ministry of Labour about the necessary changes to the acts.
[caption id="attachment_116940" align="alignright" width="141"] Treasury Secretary S.R. Attygalle[/caption]
“We have given our amendments to the Labour Ministry, and the Minister is attending to that. The Labour Minister is preparing a special act, so to speak, which would override the present acts. As there are several acts that could be impacted when we make these changes – for example, the EPF Act outlines the age for retirement benefits – the Labour Minister is going to draw up a special provisions act,” Attygalle added.
All attempts to contact Minister of Labour Nimal Siripala de Silva for comment on Thursday (28) proved futile.
When announcing the Budget 2021, Prime Minister Mahinda Rajapaksa, who is also the Minister of Finance, stated that having two different compulsory retirement ages for men and women cannot be justified. He added that the compulsory retirement age for the public sector is 60 years, whereas it is 50 years for the private sector and is lower for females. “Contrary to this, the life expectancy for females is 76.6 years, and it is 72 years for males. Therefore, based on the life expectancy, it is proposed to amend the Employees’ Provident Fund Act to expand the retirement age for both men and women up to 60 years. I wish to also bring to your notice that at the time of the adoption of the Employees’ Provident Fund (EPF) Act, the life expectancy for females was as low as 57.5 years and the life expectancy for males was 58.8 years,” Rajapaksa had added.
However, we reliably learnt that the private sector was not in favour of this proposal. When we asked Attygalle whether the Government will take into account the concerns of the private sector, he added that he does not think anybody – employees or employers – will oppose this move.
“The Department of Labour can consult the people and make the amendments, because when you prepare an act, anyone can challenge that in the court,” Attygalle added.
The Sunday Morning Business spoke to Employers’ Federation of Ceylon (EFC) Chairman Kanishka Weerasinghe in this regard. He stated that one of the reasons why the private sector is opposing this act is due to the current challenges in recruiting the younger generation to the industry.
“Currently, youth unemployment is at 19% and female youths account for around 26%. Hence, there's something wrong there. We need to attract younger people into the organisation, and that is not going to happen by prolonging the employment of the older generation.”
According to Weerasinghe, the private sector is not in favour of this act due to several reasons such as the burden to bear costs and its ability to afford it, commercial cycles, and also organisational human resource requirements.
In addition to these, he shed light on another concerning issue, sharing that as there are an excessive number of workers who are above the retirement age, it would be impossible to retain them all if the act is established.
When inquired if the concerns had been communicated to the relevant ministries, Weerasinghe stated: “We have made our views known. I believe if there are further discussions, it will have to take place with the Minister of Labour.”
We also spoke to National Chamber of Exporters of Sri Lanka Secretary General/Chief Executive Officer (CEO) Shiham Marikkar, who said that the official request on paper will be sent to the relevant ministries by early next week. “The proposal will say that the exporters are requesting them (authorities) to revisit that particular proposal, as it will have adverse effects on the export sector.”
Explaining further, Marikkar also shared Weerasinghe’s sentiments on the impact on youth employment. Exporters want youths on board so as to increase productivity and innovation by fostering new ideas to compete in the international market, he shared.
Generally, in the private sector, employees are recruited based on company policies with regard to employment on a contractual basis which has the flexibility to retain employees with high productivity beyond the retirement age (done on mutually agreeable terms). Accordingly, the minimum age of a male employee is 55 years and for females it is 50 years.
However, Marikkar emphasised: “Exporters are requesting the authorities to not introduce a policy in this regard, but to leave things as they are, where the employer and employee, on mutual understanding, can adopt the general contract procedure.
“At the end of the day, the employer should be able to decide. If the retirement age has been exceeded and the employer wants to retain the employee, they should be allowed to do so via a special agreement. Hence, we request that the proposal not be implemented,” he added.