Labour Reforms and Contemporary Slavery Ahilan Kadirgamar

Amidst the economic depression in Sri Lanka, there is now a great clamour for labour reforms. The Wickremesinghe-Rajapaksa regime and the business lobbies are now in a rush to repeal or change the laws that have protected the rights of the workers for decades. Why is there such a strong push for labour reforms at the current moment? How are such regressive legal changes sold to the public? What are the implications of such an attack on labour for democratic rights?

Wage Repression and Exploitation

Over the last year, with skyrocketing cost of living, the real wages of working people have fallen by 40% to 50%. Food prices have doubled. Transport, fuel and electricity costs have tripled. And prices of most goods have gone up by more than 60%. Thus, the actual purchasing capacity of workers, given that income remained the same or declined, have come down by 40% to 50% depending on how much of their income is spent on essential needs such as food, transport and fuel. The consequence is extreme wage repression, which greatly benefits businesses because their wage bill has become much lower. As for export businesses, they have gained tremendously, as their exports are now worth over 60% with the devaluation of the rupee, while their labour costs have remained the same.

Even as the workers are devastated by such wage repression, labour reforms now will provide tremendous flexibility for employers to intensify exploitation; each employer will be able to squeeze their workers in whatever form necessary to increase their profits. The reforms will allow businesses to get rid of the eight-hour working day and lengthen the time of work without overtime pay; to hire and fire at will; to exploit workers with part-time work; and to put women in night work without protection. In other words, the workers have been at the receiving end of the economic system with the wage repression brought on by the IMF package, and the next phase of this attack in IMF parlance is “labour market flexibility”, that is to take away workers’ rights and put them at the mercy of their employers.

In this way, the economic crisis is being used as an opportunity by the ruling elite and the business community – for undoing the labour laws seen as a hindrance for decades – to intensify exploitation and increase profits. They justify labour reforms as necessary for foreign investments to help Sri Lanka dig itself out of the economic crisis. However, at the heart of the current debt crisis are such international capital flows considered to be foreign investments. The commercial borrowings in international capital markets that ended up in the conspicuous consumption of the elite such as luxury vehicles. The multilateral loans that ended up in infrastructure including roads without returns. The trophy projects that came with Chinese and other bilateral investments epitomised by the Lotus Tower. Along with such unproductive investments, even the majority of the Foreign Direct Investment from Multinational Corporations, on the meagre order of US$ 1 billion per year in recent times, went into speculative investment in real estate.

Foreign investment is not going to change the economy, nor is it going to come into the country seeking productive investment, for example in manufacturing, given the current global context of declining growth. Rather, the regime and the allied business classes are deceiving the public with rosy stories about foreign investment in their ideological attack against labour laws and trade unions. If the Government was serious about increasing employment it must first come up with credible economic planning and industrial policies, which successive governments failed to do, and the current government has nothing to show.

Freedom or Slavery

Last year, the United Nations Special Rapporteur on Contemporary Forms of Slavery, Tomoya Obokata, put Sri Lanka to shame in his report following his visit. He mentioned the atrocious conditions in the plantations, the free trade zones and the informal sector, along with caste oppression in other parts of the country. The labour laws in our country, despite the huge shortcomings in their implementation, were hard fought victories that followed the abolition of slavery in Sri Lanka in 1844. What we are facing now is the danger of dismantling the progressive provisions in these laws along with the escalation of attacks on our democratic rights.

It is no coincidence that the attack on labour laws is coming soon after the Government floated a draconian Anti-Terrorism Act. A government without legitimacy, and afraid to even hold local government elections, should not be allowed to touch the laws of the country. Just as the Anti-Terrorism Act is a non-starter undermining our freedom, similarly, trade unions, progressive political parties and social movements should not entertain changes to the labour laws by this illegitimate regime in power, as this too amounts to another window of attack on our freedom.
As we consider the protections provided by our labour laws, we should remain alert to how it was won not just in our country but around the world. Karl Marx, who was instrumental in initiating the First International and its eight-hour working day campaign, had the following to say about labour laws.

“In the United States of North America, every independent movement of the workers was paralysed so long as slavery disfigured a part of the Republic. Labour cannot emancipate itself in the white skin where in the black it is branded. But out of the death of slavery a new life at once arose. The first fruit of the Civil War was the eight hours’ agitation, that ran with the seven-leagued boots of the locomotive from the Atlantic to the Pacific, from New England to California. … For ‘protection’ against the serpent of their agonies, the workers have to put their heads together and, as a class, compel the passing of a law, an all-powerful social barrier by which they can be prevented from selling themselves and their families into slavery and death by voluntary contract with capital.” (Capital, Volume 1, p. 416)

These words of Marx over one hundred and fifty years ago, in his magnum opus, Capital, should alert us. Are we going to defend the “social barrier” in the form of labour laws, or are we going to slide back into slavery? As our trade unions take on a valiant campaign to protect labour from slavery, we must stand in solidarity, both for the rights of working people and for freedom and equality.

(This article was originally published in The Daily Mirror on May 16, 2023)