The Island Editorial

Workers’ dilemma

Saturday 07th November 2015

 

Prime Minister Ranil Wickremesinghe unveiled the government’s economic policy in Parliament on Thursday. The objectives mentioned therein may have warmed the cockles of many a heart though the proof of the pudding is in the eating.

However, the proposal to amalgamate Employees’ Provident Fund (EPF) and the Employees’ Trust Fund (ETF) to form a pension fund must have sent a chill down every private sector employee’s spine. For, the workers’ experience with previous attempts by some do-gooders to meddle with the EPF and the ETF purportedly to improve their lot has been bitter.

The government has pledged that no room will be left for politicians and officials to waste resources of the proposed pension fund. The new fund is to be managed by a board of trustees appointed by the Constitutional Council and supervised by a committee consisting of members of the civil society, unions and chambers of commerce. An assurance has also been given that the changes in governments, ministers, political parties and officials will not affect these measures. This undertaking is welcome, but the fact remains that there is absolutely no need to change the structure of either the EPF or the ETF, or both.

Successive governments have been toying with the idea of paying the private sector workers’ retirement benefits in monthly installments by way of a pension in a bid to dip into the EPF and the ETF. It was workers’ resistance which put paid to their efforts. The Rajapaksa government stood accused of misusing the EPF for pump-and-dump operations for the benefit of its cronies at the expense of the workers.

When the Rajapaksa government proposed to introduce a private sector pension scheme at the expense of the EPF and the ETF in its Budget 2010 we pointed out in these columns that it was playing with fire. That government wanted workers’ retirement gratuity also channeled to the new fund to be set up. We warned of dire consequences if it tried to meddle with the EPF and the ETF at the behest of the international lending agencies. But, it, true to form, sought to bulldoze its way through. And that move proved to be a terrible political miscalculation.

The day the Rajapaksa government, intoxicated with power, ordered a crackdown on the Free Trade Zone workers who took to the streets fearing for the safety of their retirement benefits in 2011, it started digging its political grave. When the situation got out of hand with protesters refusing to give in, that regime beat a hasty retreat, not wanting to trigger a tsunami of workers’ resentment, but the private sector workers lost their faith in that administration.

The government’s policy statement says the EPF and ETF funds belong to the people and they will not be squandered away and its only objective is to provide incentives for the people. These funds, it needs to be stressed, belong to the workers who have contributed to them and not to the people as such. They need to be invested but care must be taken to ensure their safety for the sake of the private sector workers who are left with no other source of income in retirement.

Nothing frightens workers more than the prospect of losing their EPF and ETF benefits after decades of hard work. It behoves the government be mindful of this fact and tread cautiously without sliding into the same political donga as the Rajapaksa regime.

The trade unionists who jumped on the good governance bandwagon and did their damnedest to bring the present administration to power ought to take up the proposed amalgamation of the EPF and the ETF with the government and seek a clarification and ensure that the workers’ interests will prevail over politicians’.

It behoves any government to learn from the nasty experience of the Rajapaksa government in handling the EPF and the ETF. Only the workers have a right to decide what to do with their own funds. They must be consulted before any attempt is made to effect changes to those vital funds, administrative or otherwise.

Workers must be able to withdraw the money in their EPF and ETF accounts in full unconditionally upon retirement. Let that be the bottom line.