Managing the rising CoL is no longer a smooth sailing for people, since the country is grappling with economic crisis, that lead to many strikes and trade union actions
In countries like ours in the Global South, the informal sector is where a majority of the population draws its income through individual or collective production outside of formal business enterprises
A crisis disrupts and creates disorder. The economic depression devastating Sri Lanka has gruelling consequences for workers and their families, including lack of food, malnutrition, and school drop outs. They are unable to afford basic needs such as transport, electricity and cooking gas. Furthermore, the crisis has also created longer term dangers for workers’ rights. The regime in power and the crony business lobby are now taking forward a concerted attack on the protections provided to workers under labour laws. In this column, I explore the myriad ways in which ideas about formal and informal labour are used by pro-business actors in their so-called push for “investor-friendly labour reforms”, paving the way for much greater exploitation of workers and harsher social and economic conditions for workers lives. In the struggle between capital and labour to divide a shrinking economic pie, particularly as Sri Lanka’s economy continues to contract, how should progressive academics, researchers and public intellectuals debate the question of labour law reforms?
Formal and informal labour
Historically, workers have fought to gain formal protections, through struggles of the trade unions for legal changes, to ensure better working conditions, decent wages and stability of employment. However, in countries like ours in the Global South, the informal sector is where a majority of the population draws its income through individual or collective production outside of formal business enterprises. Here, working people involved in a variety of livelihoods have sought other avenues to fight exploitation by traders and consumer businesses, and seek better income streams and resources for production, for example through the formation of co-operatives.
In this context, there is at the current moment a disingenuous campaign by the government and the business lobby backed by some think-tanks claiming they are going to better the situation of working people through changes to the labour regime. This insidious discourse claims that it is the labour protections provided by the current set of labour laws that keep working people in the informal sector and undermine business growth to generate formal jobs. Employers are using this discourse to demand the right to hire and fire workers at will in order to adjust their production to market conditions and increase their profits. Hire and fire practices are currently prohibited by two important laws, the Industrial Disputes Act No. 43 of 1950 and the Termination of Employment of Workmen (Special Provisions) Act No. 45 of 1971. And the employers are now seeking to change both these Acts.
Next, these think-tanks in particular dismiss the importance of women’s care work in their homes and the various forms of informal production and livelihoods for cash incomes, claiming the low levels of formal labour force participation of women in the country is a curse. They propose changes to the labour laws so that women can be demanded to take up for example night time work, even though the employment practices in Sri Lanka make it amply clear that there isn’t enough protection for women, and unlikely that businesses will implement safety measures when they are under the strain of a collapsing economy.
Ideological deflection and blame
Why is the regime in power and the business lobby backed by think-tanks demanding such changes to labour laws at the current moment when the economy is in a downward spiral of contraction? This is because they are making two ideological moves that have to be confronted head on by progressive voices. First, they are deflecting people’s tremendous economic suffering by claiming it is the labour laws that are keeping the economy from reviving. Second, they are claiming that they can create formal jobs including for women and others in the informal sector through legal changes leading to the creation of a robust formal sector. Both these claims are not only flawed but also dishonest.
At the heart of the collapsing economy is the lack of policies to revive the economy. With the severe economic contraction, many small businesses themselves are going bankrupt, and even large profitable businesses are unwilling to invest. Indeed, there is no way out of an economic depression without increased investment. When businesses, whose primary interest is maximizing profit, do not invest during a contracting economy, the government and other agencies should, but instead of addressing the investment and policy issues, they are blaming labour and labour laws. The worrying reality is that the businesses are now involved in cannibalistic competition and driving each other down without investing for the long-term. Many large businesses are only looking for quick deals to take over public assets through a fire sale or other extractive measures, all under the guise of privatisation and public-private partnerships.
The push for so-called formalisation of the economy through regressive changes to labour laws will only result in further informalisation. In other words, the lack of legal protections for employed workers will lead to an increase in contract work and proliferation of manpower agencies resulting in workers having irregular days of work, long working days and little protection and stability in their employment. Men and women subjected to such informalized employment in a so-called formal sector will indeed be much worse off.
The ideological attack on labour laws mentioned above should be amply clear for intellectuals and researchers who even scratch the surface of the right-wing discourse of labour reforms. As for academics, who are yet to come into this debate, except for the few who sing for their supper in the corporate quarters, the nature of this discourse should be clear from how they came under attack three years ago with the Gotabaya Rajapaksa regime. At that time, the economic travails of the country were blamed on the higher education system claiming that it is the “unemployable graduates” that were the problem. Back then and even more so now, the government and businesses avoid the most crucial question. Where are the jobs, stupid?
The World Bank itself claims five hundred thousand jobs have already been lost in Sri Lanka. Even those people who had formal labour protections are losing their jobs! So, rather than attack workers further, it is high time we as a country focus on policies to protect and create jobs. Indeed, there can be no worse time to change labour laws than now. We must first stabilize the collapsing economy and have a legitimate government through elections before even discussing labour law reforms. Are the progressive academics, researchers and public intellectuals ready to bring this debate to the public against the many shenanigans of the illegitimate regime in power and the crony business lobby?
