Award winning factory closed over Rs. 2,500 pay hike dispute in EPZ

Among those who had won presidential awards at Wednesday’s ceremony at the Nelum Pokuna theatre was Everest Industrial Lanka Pvt Limited recently closed due to a strike launched by its workers demanding a Rs. 2,500 salary increase proposed by the government.

The factory situated at the Katunayake Export Processing Zone (EPZ) received presidential awards for electric and electronic export category for 2012 and 2013.

The Export Development Board (EDB) recognised top exporters for their performances from 2010 to 2013 at a ceremony held under the patronage of President Maithripala Sirisena.

Although there hadn’t been any reference during the awards ceremony to the crisis

caused by a section of the workers, well informed sources told The Island that demand for an immediate increase in workers’ salaries by Rs. 2,500 had led to the closure.

Sources said that a section of workers had launched a protest soon after the government, during its 100-day project, proposed a Rs. 2,500 salary increase to private sector workers. Amidst the rapidly deteriorating situation at the factory, the management in consultation with the Board of Investment (BoI) and the Manufacturers Association increased workers’ salaries by Rs. 1,000. However, some workers told the management that they should be paid the full amount or face the consequences, causing the top management to seek the intervention of the Labour Department.

The Syrian-owned venture had commenced commercial operations during 2007 at the height of eelam war IV and was one of the most successful foreign enterprises active over the past eight years. Sources said that the factory had experienced severe difficulties due to cancellation of almost all orders due to labour unrest. Subsequently, the management paid workers’ salaries for a few months in spite of the factory being closed, sources said, adding that the top management had finally decided to terminate services of those who had been undermining the successful venture.

The group managed production facilities in Dubai, Saudi Arabia, Egypt, Sri Lanka and Syria. Sources said that the Syrian project had been disrupted due to violence there whereas the successful project to supply the lucrative Indian market was now in shambles.

Responding to a query by The Island, sources said that the management was in the process of exploring the possibility of paying compensation to the workers. In accordance with labour laws, each worker has to be paid two and half months’ salary, sources said, adding that the workforce comprised over 550 persons. Sources said that the company would need as much as Rs. 60 mn to pay compensation.

Negotiations between the workers and the Labour Department are nearing completion.

Addressing the Nelum Pokuna gathering, President Maithripala Sirisena stressed the importance as well as the urgent need to enhance exports. Assuring that the government would take measures to strengthen exports, he said that the new administration had gone to the extent of setting up a new ministry to promote exports.

Industry sources alleged that a certain trade union had deceived the workers at the Everest Industrial Lanka Pvt Limited in spite of them being well paid with free three meals a day, transport as well as uniform. Even workers represented by lawyers had, at one point, suggested that they should reach an understanding with the management to avoid an unfortunate situation, sources said.

Sources said that unless the government initiated an immediate dialogue there could be widespread turmoil at EPZs with interested parties causing unrest.

-Shamindra Ferdinando

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