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Sunday, April 17, 2011

Pension Bill Challenged in Srilanka

Pensions Bill challenged in Supreme Court – Not in India – But it happens at Srilanka

President calls unions for a discussion

The new Employees Pensions Bill which has drawn the ire of employees, employers and trade unions, has been challenged in the Supreme Court by the Ceylon Bank Employees Union (CBEU) on a fundamental rights (FR) issue.

Meanwhile President Mahinda Rajapaksa, conscious of the barrage of criticism over the scheme which is to be made mandatory contrary to earlier promises of a voluntary pensions plan, has invited trade unions for a meeting on April 25 – two days before the bill is to be debated in parliament – to discuss issues that concern workers. Anton Marcus, President of the Free Trade Zones and General Service Employees Union which is associated – along with other unions - with the CBEU in the petition, said notices of the FR application have already been sent to the Parliamentary Speaker and the Attorney General. “We are filing a motion in court next week to take up the matter on April 28 and thus it is unlikely that parliament will be able to debate it on April 27,” he said. Courts have been on vacation and due to reopen in last week April.

T.M.R.Rasseedin, President of Ceylon Federation of Labour (CFL), like most trade union leaders, is skeptical of meetings with the President. “Going on past experiences, these meetings are an informal gathering mostly attended by pro-government unions. Its not a real dialogue … just some ‘mock’ discussions with little outcomes, followed by lunch,” he said, adding however that his union would attend the meeting.

Mr Marcus said the President’s Office should only invite unions represented on the National Labour Advisory Council, which has been raising issues over the pensions scheme, instead of all unions.
E. K. Vithana, Vice-President of the CBEU has been cited as the petitioner in the application which was filed on April 12 and he says the bill is inconsistent with the Constitution which he claims is violated in many ways. He says the bill deprives members of the Employees’ Trust Fund of their due entitlements to the dividends realized from the investment of the moneys of this Trust Fund.

Among other issues the CBEU is contesting is that the scheme is mandatory for every employee; there are contradictions in the bill itself as to who becomes members; that it imposes restrictions to legal heirs to claim lump sum amounts upon the death of a member who has fully contributed to this scheme. It says the scheme must be made voluntary.

The petition says that under the bill once an employment is declared to be a ‘covered employment’ the employees concerned in these employment categories automatically become members without their consent to joining it. All workers who become members of the fund are forced to forgo a certain percentage of their remunerations to be remitted to the said fund. Workers don’t have any choice but to remit their hard-earned remuneration to the fund against their will, it said.

“.. there are no whatsoever provisions in the bill to the effect that the worker and in his absence his dependents will be entitled without any hindrance to the amount so deducted from the worker and to the interest accrued to that amount,” the petition said.

It said workers who make contributions must have a minimum period of 10 years of contributions to qualify for a pension. If an employee does not have the respective number of years required he or she will have to make the balance payments relating to such period, without being employed, which would also include the monthly contribution of the employer as well.

If the employee is unable to make this balance payment he will stand to lose all deductions that were made from earnings. The petition says a large number of young female employees are employed in industrial and export processing zones and the duration of employment of most of these employees is often below 10 years. In such instances, they will stand to lose their remunerations.

The petition has also raised issue over withdrawal of the remittances before a worker completes 10 years of service. Early withdrawal would entitle the worker to only 60% of the contributions.

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