Workers from the Katunayake Free Trade Zone, Sri Lanka largest free trade zone, took to the road in protests. Photo courtesy Women's Centre
Yesterday (May 24), thousands of workers from the Katunayake free trade zone blocked the road to Sri Lanka’s Bandaranaike International Airport, in a protest against government plans for a pension scheme for private sector workers.
Another protest was held in front of the Fort Railway Station in the heart of Colombo city.
Workers and trade unions say they do not object to a pension scheme – just the one proposed by the government.
Private sector employees in Sri Lanka do not get a pension, while government workers do. However, when the government attempted to take up a bill for a private sector pension scheme in April this year, trade unions went ballistics. They said the document the government took to parliament was not the document shown to them during discussions in formulating the pension scheme.
Sri Lanka’s main opposition – the United National party (UNP) – and the Marxist Janatha Vimukthi Peramuna (JVP) are also backing the anti-pension protests.
Garment workers worse off
Sri Lanka’s garment factory workers are seen as particularly badly affected by the proposed pension scheme.
According to trade unions the government will finance the pension scheme by taking a percentage of a worker’s salary every month and by taking 10% of a workers gratuity payment. The employers must also make a small monthly contribution. When retiring – at the age of 60 – the employee is entitled to a monthly pension. However, they must work for 10 years to qualify for the pension.
People working in the private sector in Sri Lanka will also have not have the choice to opt out of the scheme.
But in Sri Lanka girls only work for about 5 years in garment factories.
“Girls come to work in garment factories to collect some money as dowry for their marriage. So in most cases, they leave the factory job after five years and get married and stay at home. The pension scheme, takes money from their already small salaries while they work. But because they do not work for 10 years (they leave after 5 years), they are eventually cut off from the pension payment itself. This means a large majority of the country’s 250,000 garment factory workers will lose out because of this pension scheme,” explained Ms Chamila Thushari from Da Bindu, a women’s rights organisation also campaigning against the pension scheme.
Garment factory employees also point out that the pension payment is too small to be useful.
“By that time we qualify for pension payments the pension amount is not going to be worth anything,” said Irosha Kumari, a 21 year old garment factory employee, who will have to wait until she is 60 years to get her pension payments.
Trade unions say based on current wages of about Rs 10,000 per month, garment sector worker pensions come to about Rs 1,900 per month, which they point out is worth next to nothing given the cost of living in Sri Lanka.
Under current Sri Lankan labour law, women can withdraw their full savings from the statuary workers’ welfare funds (the EPF and ETF) when they marry, or when they reach 50 years of age. If the pension scheme is introduced they will not get this lump sum payout – instead they will get a monthly pension payout. However, many employees prefer to collect their savings as a lump sum, rather than get a small monthly pension.
“I do not want a small pension payment. I want my full EPF and ETF savings. I have been saving my EPF, ETF money because I wanted dowry for my daughter. But now the government is going to take my EPF, ETF money and give me a monthly payment that is too small to be of any use to me,” said G L K Pushpa, a 47-year old garment factory employee.
The government says it has amended the original pension bill to incorporate worker concerns and that it will also make a large contribution to the pension fund. But workers and trade unions are still not buying the pension proposal.
