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 South Asian Forum of Employers || SAFE :: ILO/DECP SOUTH ASIA EMPLOYERS’ ORGANISATIONS MEETING, OCTOBER 27 – 28 2014 COLOMBO, SRI LANKA
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 Subject :REPORT - ILO/DECP SOUTH ASIA EMPLOYERS’ ORGANISATIONS MEETING, 2014.. 10-04-2015 03:55:40 
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Background

Since 2011, senior representatives of Employers’ Organizations (EOs) in South Asia have met annually in a short workshop with the primary objective of sharing experiences and policy approaches on issues of common concern and interest, creating an active network among neighboring countries EOs and enhancing their effectiveness in critical areas for EO development such as:

  • Membership Promotion / Retention.
  • Lobbying with governments to create a more conducive environment for business and national competitiveness.
  • Provision for relevant services to members geared towards enterprise competitiveness and sustainability.
  • Revenue Building.

A concrete result has also been the launching of a common website www.safe.org.lk., hosted by the Employers Federation of Ceylon (Sri Lanka).

A recent survey on the number of “hits” indicates an encouraging increase in its usage as a tool for information exchange.

The workshop of 27 – 28 October 2014 continued the process of facilitating mutual cooperation among south Asian EOs for further strengthening their national and regional effectiveness vis-à-vis their membership and the private sector as a whole in the current dynamic socio economic environment.

The specific focus in this workshop was on Minimum Wages (MW). The subject of MW is one of importance and concern to all developing countries in Asia, in the export sectors in particular. In ongoing debates/ dialogues on MW, governments, employers, workers and other stakeholders are often challenged with a range of issues in regard to policies and their implementation.

Whereas EOS are expected to play a lead role in this debate/dialogue, the insight into and discussions on the short and long term policy implications of the proposed solutions at the workshop were of substantial value to EOs in developing their own policy positions on the subject and for more effective engagement with Governments and other stakeholders.

Apart from MW, the workshop also focused on recent developments/trends in the area of lobbying/advocacy and services to members in the overall context of EO membership retention and expansion.

Representatives from national employer organizations in the following countries participated in the workshop.

Bangladesh

Nepal

India

Pakistan

Sri Lanka

Afghanistan, though invited, was not represented.  A list of participants is attached hereto.

As in the previous 3 instances, the workshop was supported by the Dutch Employers Cooperation Program (DECP) with the Employers’ Activities Bureau of the ILO and the ILO International Training Centre.   The workshop agenda is also attached hereto.

The Employers’ Federation of Ceylon (EFC) acted as the co-host. The participants were hosted to a dinner by the EFC on the 27th.

27th October 2014  -  Inaugural Session

The ILO Senior Specialist for Employer Activities for South Asia Mr. Gotabaya Dasanayaka welcomed the participants.  He drew attention to the background in which the SAFE was initiated in 2011 and has since developed into a relatively effective EO network anchored around the SAFE website which has been efficiently hosted during the last two years by the EFC.

In the context of the topics of discussion at the workshop, he highlighted the importance of MW - currently a topical issue for all countries in South Asia - and urged the participants to make use of the deliberations to enable national EOs to plan their strategies to effectively address issues pertaining to MW at national level.

With regard to membership retention and expansion, he pointed out that almost all EOs have in the recent years initiated new strategies in terms of advocacy and services.  While participants exchange information in relation to these new initiatives, he also urged EOs to make further use of the SAFE website to upload information on such matters in respect of other areas of mutual interest as well for more effective networking.

Mr. Dasanayaka thanked the DECP represented by Mr. Rogier Chorus at this workshop for their continued support to this program.  He also thanked the ILO office Colombo and its Director Mr. Donglin Li for the support extended in arranging this workshop and also for hosting the participants to a reception on the evening of the second day of the workshop.

Mr. Arnout de Koster, Program Manager, ACTEMP/ILO ITC in his address thanked the DECP for their continued support and made special mention of the former DECP Advisor Mr. Jan Karel Bout for the role he played initially in making this program a reality.  He welcomed Mr. Chorus and looked forward to a continued constructive relationship with DECP.

He, thereafter, summarized the agenda for the two day workshop and encouraged all participants to engage in the deliberations and also use the SAFE website on a more regular basis to improve networking.  Finally, he thanked the ILO Colombo and its Director Mr. Donglin Li for the unstinted support they extended and also the EFC for their hospitality.

Mr. Chorus, DECP advisor, while recognizing the services rendered by Mr. Jan Karel Bout, introduced himself to the participants and proceeded to give a brief outline of the role of the DECP at national and international level in assisting the growth of business. The DECP, he said, was a public private partnership between the Dutch Government (Ministry of International Co-operation) and Dutch employers, engaged in the process of ‘building bridges’ between business and government.

While the DECP is engaged in advocacy for business at national level, it also supports EOs around the world in strengthening their capacities for more effective engagement with governments. He emphasized that the subject is of crucial importance to EOs as it affects the root of balancing issues between social considerations and economic realities.  He looked forward to the deliberations of the workshop.

In his address he made reference to the initiatives taken by the ILO Colombo office in Sri Lanka and particularly to the constructive role played by the EFC as the ILO’s employer constituent.

 

Technical Session 1

Minimum Wages (MW)

Representatives of the participating EOs made brief presentations on the subject of national minimum wages in their respective countries.  The presentations made are attached hereto.  The presentations under discussions that followed focused on the following areas:-

  • The existing MW systems at national level.
  • The existing MW systems in each country.
  • The level of MW in nominal and real terms.
  • Issues/challenges faced by EOs in relation to MW policies in the respective countries.
  • Proposals made to influence and change existing MW policies/mechanisms.

The presentations were interesting and many other aspects highlighted the difference between countries in relation to policies, their application, structures and also wage levels.

A summary of learning’s from the presentations made by each country:

Policies on MW vary from country to country and it is linked with the national culture etc. with quite some difference in level setting mechanisms, at sector - provincial – national levels.

  • But the common trends are: MW is now everywhere;
  • Decisive factors on MW fixation:
    • Level of wages
    • Social security
    • Inflation
    • Employment level
    • Productivity
    • Capacity to pay by the industry
  • An interesting discussion took place on “The lighthouse effect” – once the minimum wage is set it tends to attract all other wages to it.
  • An EO perspective: “Not very successful”. MW increases - both nominal and real, are important everywhere: annually the MW level increase varies from a nominal 20%  to a real 10%
  • The high increases become a major concern (although in some more than others)
  • The high increases have had a direct impact on Labour Intensive Industries like hotels and such other services
  • In some countries because of its “Spillover” effect,  the impact has been two dimensional (senses)
    • General effect on non-minimum wage workers, obviously more than on those close to MW, because the MW increases set framework for expectations
    • The impact of the Community-Based Adaptation (CBA) on climate change has had an additional impact on MW increase in Nepal.
  • Why is MW a concern for employers?
    • Pace of increase surpasses and goes beyond the capacity to pay; and is insufficiently “earned” via productivity or performance
    • Consequences – increased costs are translated in higher prices, or if prices cannot be increased, the sharp increases in MW affect profits and capacity to invest.
    • Further consequences: diminution of employment and more informality of certain companies - divestment.
  • Different countries and different situations are linked with different economic situations: Institutions and policies make a difference.
  • Sector level wages seem more linked to market realities ( and CB) than National MW
  • Interesting to note how ‘more the political  influence - the faster the increases’
  • Timing may be important. What comes first : MW or sector and company CB
  • Coordination of EO wages board representatives can be important

What can Employer Organisations (EOs) do?

What EOs know about MW in their regions – facts & figures?

  • A strong increase of ‘real’ minimum wage rate from about 8 – 15% annually, is common.
  • A ‘mean’ minimum wage rate ranges from about 40 – 60%
  • The influences on real minimum wage levels are above minimum wages

What works to keep a moderate increase?

Various arguments and facts used for consensus building were presented.

  • Persuasive arguments - Employment / Informal Economy effect / Fixed adjustment criteria
  • Missing force in argument – Systems: Bipartite / Tripartite / Government ONLY; does it make a difference?
  • What would it be? ONE MW or several ONEs? A two tier system: SMEs and others?

What ACTIONS of EOs have brought success in MW?

  • Compensation via non-wage labour cost

How can SAFE and ACTEMP help?

By providing;

  • Training support
  • Guidance
  • Knowledge / information sharing (International comparisons - Unit labour cost / GDP)
  • Research
  • Capacity building of EOs

Thereafter, Mr. Roy Chacko, Senior Advisor Employers’ Activities Bureau (ACTEMP) made a presentation on the subject of “The Minimum Wage in Practice”.

He covered the following areas in relation to MW:

  1. History & Nature.
  2. Methodology/Procedures.
  3. Objectives.
  4. Criteria.
  5. Levels.
  6. The Minimum Wage Debate.

His conclusions highlighted the following:

  • It is not the concept of the MW that matters but the level at which it is set;
  • MW can help low-skilled workers by limiting the impact of marketing efficiencies which place them at a disadvantage;
  • MW is not a good instrument to solve poverty issues.  Direct payments to poor households will have more impact and fewer drawbacks.
  • It is necessary to study the impact of previous MW increases and base further increases on the available evidence.
  • It is critical to gather good data and to base MW decisions on the evidence they provide.

This presentation was followed by further discussions amongst the participants who thereafter addressed the following issues in groups:

  • Should MW concern employer organizations?
  • Can EOs agree on some common points in addressing/responding to MW issues?
  • How can national EOs/SAFE assist each other?
  • What assistance can be given by ILO/ACTEMP to EOs?

A lengthy discussion followed during which the following aspects were highlighted by the group deliberations:

•      The subject of MW is a matter of concern for EOS having regard to the implications of it on aspects relating to employment growth, enterprise stability and wage bargaining.

  • MW fixation should be linked to national economic/industrial growth.
  • MW needs to take into account employer’s capacity to pay and productivity aspects while recognizing cost of living related issues as well.
  • MW should be addressed not annually but on a periodic basis to ensure a degree of stability.
  • Exemptions from minimum wages may be considered based on sector/regional aspects but not in general.  Employers should have a comprehensive understanding on the impact of minimum wages in relation to their enterprises, sectors and national economy.
  • EOs need to engage in continuous dialogue with governments to sensitize policy makers on the impact of MW.
  • Countries require independent institutionalized processes for MW fixation (independent high level commissions).
  • EOs should strengthen their research/analysis capacity in the context of continuous lobbying/advocacy with stakeholders.

Some participants raised concerns regarding the involvement of “civil society” in MW debates.  The importance of retaining the wage determination process among employers, workers and the government was highlighted.

The EOs expected support from institutions such as the ILO and DECP in relation to capacity building of EOs in addressing the technical aspects of MW.  The importance of regular exchanges of information and sharing of best practices, ideally via SAFE was highlighted.

 

28th October 2014

Technical Session 2

Recent Developments within the EOs at national / regional level

Each EO made presentations on new important developments at regional and national level relating to socio economic policies, and new important developments/ventures within the organisation, related to its lobbying, service or social dialogue activities.

Highlights of the country presentations: More detailed information available in the respective presentations.

INDIA -             

On Membership

  • Strategies to Reaching Small & Medium Enterprises
  • HR/IR Conventions – membership drive – 20/30 out of about 300/400 join
  • Conferences/trainings in different states
  • AIOE award – 9 awards to a level playing field
  • MSME – 3 awards
  • Consultancy services via embassies
  • Collates all information and services on IR, Labour issues

On Lobbying

  • 100 day Agenda for the Government. FICCI and IOE
  • Follow up – reinforcing the message
  • Shop and Establishment Act – Labour Laws
  • Survey on Labour by AIOE and FICCI. Online self-certification / self-inspection

Plan for Next 2 years

  • Improve on Skills Development
  • Develop more efficient Industrial Dispute Resolution systems
  • Conduct projects on Employability, Decent Employment

NEPAL

On Services

  • New Draft on labour law  - bipartite /tripartite, government / trade union
  • Collective bargaining – Sectoral
  • Discussions on payment for ‘lawful strike’? Strikes should not be encouraged in anyway… A ‘Law’ for lawful strike.
  • Mechanism for social dialogue
  • Company Act, Trade Related Act & Industrial Act

PAKISTAN

On Membership

  • Writing to targeted companies giving a brief introduction to EFP and its services.
  • “Employer of the year award” was held by the EFP encouraging both members and non-members and to thereby induce the non-members to join EFP

On Services

  • Better skilled Inspectors – tripartite
  • Awards/ Nominations – Occupational Health and Safety OSH
  • Legal Services improved
  • Internationally Certified Trainers available for conducting OSH training

On Lobbying

  • Finalizing the Sindh Labour Laws
  • Advocacy on the Act of Sexual Harassment of Women passed in 2010
  • National Business Interventions – during the last 2 years

Plan for Next 2 years

  • The Devolution of the 13th Amendment
  • Improvements to the environment of business development
  • The advice / guidance to Employers on how to do business

 

BANGLADESH

On Membership

  • In 2012, as part of Strategic Activity, BEF decided to increase membership strength by 10% per annum during the next 3 years.
  • BEF currently has 127 Ordinary Members representing individual companies, which is about 10% more than the previous year.
  • 14 Group Members representing sector-specific industrial associations, covering more than 6,000 enterprises.

On Services

  • Initiative for a Training Unit on Labor Law/IR: In January 2014, BEF in cooperation with the ILO has set up a Training Unit to deliver training services to the employers on labor law, industrial relations, and HR practices. This will be supported directly by the ILO at the initial period, but expected to become self-sustaining later.
  • BEF conducted a training needs assessment study for the member firms in 2014
  • Currently developing demand-based training program
  • Rana Plaza Accident – BEF was and is actively involved in the activities to uplift it together with the ILO
  • Conducting Factory Inspections

On Lobbying

  • Labour Rule Issue

Plan for Next 2 years

  • Revise Act
  • To push for regulations
  • To support implementation of the Act
  • To work towards getting an Act which is EMPLOYER FRIENDLY

SRI LANKA

On Membership

  • Use of better techniques of reaching out to members; Increased membership
  • EFC’s endeavor to reach out to the SMEs sector and expand regional outreach

On Services

  • Focused consultancies; Niche Products; Continuous review & re-evaluation of services; Ascertaining member needs; Compliance +
  • Visibility – Enhanced
  • The EFC carried out a training needs analysis of regional employers
  • TWO MOUs signed with regional EOs and workshops conducted
  • EFC Capacity increased; New Legal and HR Services

 

On Lobbying

  • Submissions to National Pay Commission on Minimum Wage Fixation - EFC Proposal; The EFC submits that the Sri Lankan Private Sector needs a minimum wage fixation mechanism for lower categories of workers as envisaged under the Wages Boards Ordinance subject to a restructure of the composition of the Wages Boards.
  • The Government via the NLAC is lobbying for the extension of provisions for women under the Shop & Office Employees Act No.19 of 1954 – To females over 18 years of age in the business of IT enabled services and Supermarkets, in order to create an enabling environment for employment opportunities for women in Sri Lanka.

Plan for Next 2 years

  • Continue pushing for Labour Law Reforms
  • Draft legislation proposed on the Industrial Disputes Amendments Act – to build an enabling environment.
  • In order to accomplish the above maximize the use of enterprise dialogue – social dialogue

Conclusion

In the context of the foregoing, it was the consensus of the participants that SAFE should be further strengthened.  With this end in view, all the participating EOs looked forward to the continued support of the ILO and the DECP.  The following aspects in particular were highlighted.

  • The importance of uploading information on a more regular basis in the SAFE website;
  • Strengthening the research/analysis strategies of EOs;
  • The importance of EOs having access to current information/data to support their Lobbying/advocacy process;
  • The advantages of making further use of the SAFE website for information sharing on subjects of mutual interest and concern;
  • The importance of EOs being relevant in terms of lobbying/advocacy and also the provision of services to members in the overall context of membership retention and expansion;

Mr. Rogier Chorus thanked the participants for their frank and open engagement in the discussions and appreciated the desire to share and learn from experiences within the sub-regions.  He said that while the DECP would wish to continue to support funding of SAFE, they would also expect the South Asian EOs to contribute in a tangible manner to the development of the forum with the objective of making it an independent body.  He congratulated the EFC for the excellent job in hosting the website.

Mr. Nauman, of EFP on behalf of the participant countries thanked the DECP, Mr. Chorus, ITC/ILO, Mr. Arnout De Koster and Mr. Gota Dasanayaka, ILO ACT/EMP and others connected with organising the workshop and also for providing a platform for delegates to share their respective national experiences and looked forward to further fostering EO cooperation in the sub region.

Mr. Arnout de Koster, Mr. Roy Chacko and Mr. Gotabaya Dasanayaka whilst assuring the participants of continued ILO support also highlighted the importance of EOs making use of the opportunities available through the SAFE to strengthen their own capacities for the provision of more effective services to their members.

..

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