- No blanket restrictions for salary increments
- Leeway for independent institutions in managing salary matters with Treasury approval
- Specified salary scale only for institutions under Consolidated Fund
Discussions are currently underway between the Government and State-Owned Enterprises (SOEs) whose salary scales are governed by collective agreements to revise their salaries and establish new three-year agreements, The Sunday Morning reliably learns.
When contacted by The Sunday Morning, Treasury Deputy Secretary R.M.P. Rathnayake stated: “The State institutions under collective agreements, banks, and other entities governed by the agreements are currently discussing with the Government to have a new three-year agreement.”
He further clarified that independent institutions had the leeway to handle their matters with the approval of the Treasury, depending on legal provisions, adding: “There is no blanket restriction. They are governed by the collective agreements,” he said.
Regarding salary negotiations, Rathnayake stated: “Agreeing on a salary increase every three years is the norm. The agreements of the past three years have elapsed and they are now discussing new conditions.”
He highlighted that institutions funded by the Consolidated Fund, which comprised tax money, followed a specified salary scale. Rathnayake emphasised: “When these institutions are funded by the Consolidated Fund which has tax money, then they have a specified salary scale.”
Last year, Minister of Power and Energy Kanchana Wijesekera issued instructions to withhold bonuses and other allowances for employees of the Ceylon Electricity Board (CEB).
The decision to refrain from disbursing bonuses and allowances was influenced by a circular from the Ministry of Finance regarding collective agreements between the Government and trade unions.
The Government’s guidelines for the year were outlined in a circular, specifically Public Enterprise Circular No. PED 03/2023, dated 17 November 2023. This directive was communicated to secretaries of ministries, heads of commercial corporations, statutory boards, and State-owned companies. The instructions were aligned with a Cabinet decision, as indicated by Cabinet Memorandum No. 23/1902/604/188 dated 9 October 2023.
The Cabinet’s resolution involved the establishment of a committee tasked with reviewing existing collective agreements of SOEs representing all relevant stakeholders. The committee was mandated to make recommendations addressing pertinent issues.
The circular specified certain actions to be temporarily suspended until further directives were issued based on the committee’s recommendations. These actions encompassed the initiation of new collective agreements by SOEs and the extension or replacement of existing ones.
All boards of directors of SOEs were explicitly instructed to strictly adhere to these directives with immediate effect. It was underscored that in implementing these measures, the background of collective agreements, relevant concepts, and existing statutes on the matter should be duly considered. The foundation of collective agreements with trade unions is rooted in the labour conventions declared by the International Labor Organization (ILO) over time.
SOEs have faced significant criticism in the past several months over the massive losses incurred during the past decade. As a result, these enterprises have undergone a restructuring process, which, in most institutions, is still underway.
Nevertheless, the debt owed by the Ceylon Petroleum Corporation (CPC) was transferred to the Treasury, accompanied by an increase in fuel prices to cover expenses. Additionally, part of the debt owed to the CEB from the CPC was covered by the Fuel Price Stabilisation Fund. The CEB has apparently increased electricity prices to cover its expenses and the institution is currently not incurring operational losses.