Sri Lankan Airlines EPF/ETF Bungle: Government Summoned To ‘Show Cause’ Before ILO Governing Body in Geneva

The government of Sri Lanka has been summoned by the International Labour Organization to provide show cause and explain reasons for the non-compliance and execution of a valid statutory order made by the Ministry of Labour regarding the payment of mandatory retirement benefit fund contributions by the SriLankan Airlines to its Flight Attendants Union, at the upcoming convention in Geneva, scheduled to be held between the 25th October and 8th November 2018.

The Ministry of Labour of Sri Lanka had earlier on the 16th December 2017 made a landmark decision ruling in favour of the Flight Attendants Union of SriLankan Airlines, when they filed a complaint against its employer for the violation made by the airline against the country’s EPF Act.

However with SriLankan Airlines not adhering to the Commissioner General of the Ministry of Labour’s ruling, the Flight Attendants Union sought further relief by sending their complaint initially to the Ministry of Labour on the 10th January 2018.

The letter of complaint was sent after inquiries were made by the FAU pertaining to the non-compliance of the valid statutory order provided on the 16th of December 2017. The then (ACL) Colombo South Ms. Iresha Udayangani Gamage informed the FAU representative that the Commissioner General of the Ministry of Labour R.P.A. Wimalaweera had instructed her office not to proceed with the matter despite the ruling being made.

However on the 15th and 16th of March 2018 the FAU received two letters from the Ministry of Labour to attend a meeting on the 21st of March 2018 with the Commissioner General R.P.A.Wimalaweera based on the statutory ruling made by the Ministry of Labour of Sri Lanka on the 16th of December 2017.

Strangely the first letter dated 15th March 2018 with reference number IR/COM/05/2018/55 was signed by K.D. Manoj Priyantha of Commissioner Industrial Relations and the letter dated 16th March 2018 bearing reference CS/COA/D/2/349/17 was signed by Ms.P.W.M.Gamage the Assistant Commissioner General.

Prior to attending the requested meeting the FAU wrote to the Assistant Commissioner Ms.P.W.M.Gamage on the 19th March 2018, with copies to the Minister of Labour, Secretary to the Ministry and the Commissioner General of Labour (CGL), stating that it is very clear the Department of Labour has failed to implement its 16.12.2017 order and if the said 21.03.2018 meeting is used as an attempt to procrastinate and/or reopen a further inquiry when an official and evidence based final order has been made, the union will be compelled to deem the said meeting as material evidence for all intents and purposes of the law, as a conscious attempt by the Department of Labour to willfully avoid enforcing the law.

Whilst attending the meeting on the 21st March 2018, the FAU demanded to know as to why two separate letters were sent bearing two separate reference numbers.

The Commissioner General Wimalaweera tendered an apology stating that it was an error on the part of the Ministry of Labour.

Thereafter the Commissioner facilitated a discussion stating that he wishes to review the statutory ruling that was given on the 16th of December 2017.

The FAU made it extremely clear to the Commissioner General Wimalaweera and queried if he could inform them as to how he could draw such a conclusion without going into any formal evidence or submissions from both parties.

Being unable to provide an answer the Commissioner General Wimalaweera then immediately called off the meeting and directed the parties to leave the premises.

However the Commissioner General of Labour has at the end of the meeting directed his officials to implement the 16.12.2017 order.

The audio recording of this directive is now in the possession of the International Labour Organisation.

The Commissioner General R.P.A Wimalaweera thereafter submitted a letter to the Attorney General seeking his opinion.

Several legal sources when conducted claimed that once such a final statutory order is made and dispatched to parties under registered cover, setting out specific dates for compliance; the law does not provide provisions for the Attorney General to reverse such statutory directives.

Strangely, a reputed former Commissioner and another Assistant Commissioner of the EPF division of the Department of Labour and the Employees Trust Fund on three different previous occasions have officially held in writing that the allowance concerned is statutorily liable for EPF deductions.

Thereafter with no further progress being made, the FAU then filed a 30 page formal complaint before the International Labour Organization (ILO) under Article 24 Representation procedures of its Constitution on the 10th of August 2018. The FAU also cited the letter sent by the Commissioner General Wimalaweera to the Attorney General’s Department.

Their complaint stated that the Commissioner General Wimalaweera had surreptitiously and unscrupulously suppressed certain facts to mislead the Attorney General when seeking his opinion.

Colombo Telegraph has a copy of the complaint made by the FAU to the ILO and Commissioner General Wimalaweera’s letter to the Attorney General in its possession.

The FAU has now officially raised the willful suppression and misrepresentation of facts by the Commissioner General of Labour with President Maithripala Sirisena.

The stance of President Sirisena on the conduct of the Commissioner General will now become a key determining factor before the international inquiry and an acid test on his commitment to principles of good governance.

The complaint also deals with a willful failure by the Department of Labour of Sri Lanka to enforce a valid statutory order for the payment of mandatory retirement benefit fund (Employees Provident Fund) contributions of the employer (SriLankan Airlines).

A Legal source conversant on the matter contacted by Colombo Telegraph stated the following:

“It is now officially confirmed that the Article 24 case is listed to be taken up at the 334th Session of the ILO Governing Body in October-November 2018. ILO officials are submitting a report to the governing body on the receivability of the case and the SL govt. has been asked to show cause and explain matters before it in Oct-Nov. This is the first time SL is going through an Art.24 procedure.

Once receivability is cleared a tripartite committee of the governing body will be appointed to examine the case. Then it will become a full blown international inquiry and proceedings & findings of which will become material before the US and EU GSP monitoring and review mechanisms. This can certainly jeopardize our tariff free exports to the US and EU markets. All due to the blunder of the Commissioner General of Labour. If exports are hurt it will further send the ailing Rupee down the precipice.

These are highly technical procedures of the ILO that involve a fair amount of expertise and experience to handle. It appears that local labour officials neither know how to handle this nor what’s in store. Now there’s not much space left to play around. It’s just a matter of time when the onslaught begins.

In 2010 the US trade department conducted a US GSP inquiry against Sri Lanka and it was settled on the condition that provisions contained in ILO Convention No.81 Labour Inspection will be addressed and complied with. Around 5 million USD were provided by the US Department of Labour for this purpose to the government directly and through the Colombo office of the ILO to fix the problem. Funds were sent down the drain and now the problem has resurfaced again in a big way.

The call is now with the President. Whether to safeguard the Commissioner General of Labour who willfully suppressed facts and misled the AG to serve his political masters or look at the problem from the greater interest of the nation and do what is right!”

With the ruling made by the Department of Labour on the 16th December 2017, SriLankan Airlines has been has to pay approximately over US$ 50 million to its Cabin Crew for the non-payment of EPF on overseas meal allowances since the airline’s inception since 1979.

This sum is approximately 50% of what the former CEO Suren Ratwatte paid for the cancellation of the Airbus aircraft deal recently.

SriLankan Airlines’ cabin crew in 2016 offered in writing to the management to deduct their share of EPF dues from their earnings. The failure in due diligence by the management has now resulted in the Airline having to contribute the workers share as well and pay up a statutory surcharge for the wrongful default. Had the former CEO and the board of directors accepted the offer of the cabin crew the ballooning statutory liability could have been mitigated and brought under control. (By Janaka Ranaweera)


Source: Colombo Telegraph