The Hon. (Dr.) Anil Jayantha - Minister of Labour and Deputy Minister of Economic Development

¶ 01 Hon. Deputy Speaker, I move, "That the Bill be now read a Second time."

¶ 02 In addition to that, Sir, I also move Item No. 2, the Budgetary Relief Allowance of Workers (Amendment) Bill, and Item No. 3, the National Minimum Wage of Workers (Amendment) Bill.

¶ 03 Hon. Deputy Speaker, today we take up amendments to three laws: the National Minimum Wage of Workers Act, No. 3 of 2016; the Budgetary Relief Allowance of Workers Act, No. 36 of 2005; and the Budgetary Relief Allowance of Workers Act, No. 4 of 2016. In Budget 2025, we increased salaries in the public sector substantially by 60-80 percent and enhanced salary increments up to 80 percent, allocating Rs. 325 billion, to be paid in three stages.

¶ 04 We recognize the significant contribution of private sector labour to national production. While private sector pay practices vary by employer, in view of the substantial increases in the public sector, we convened tripartite discussions with trade unions, employers and relevant state institutions to consider how the private sector could also increase wages.

¶ 05 At the time we took office, the country had suffered inflation of about 70 percent, eroding the real wages of workers. We reactivated, after over a year and a half of dormancy, the National Labour Advisory Council (NLAC) and first discussed wage revisions there.

¶ 06 We have since convened the NLAC several times. Given the large public sector increases, we negotiated that the private sector, too, should raise wages. The current law setting the minimum wage is the National Minimum Wage of Workers Act, No. 3 of 2016, which sets the monthly floor at Rs. 17,500. We sought to increase it to Rs. 30,000. Employers requested that it not be raised to Rs. 30,000 at once due to inflation and economic conditions. We agreed to a two-step approach: raise to Rs. 27,000 effective 01.04.2025 and by a further Rs. 3,000 to Rs. 30,000 effective 01.01.2026, by amending Act No. 3 of 2016.

¶ 07 Historically, increases were often delivered via allowances rather than raising the basic wage. Two allowance statutes—Acts No. 36 of 2005 and No. 4 of 2016—granted a total of Rs. 3,500 as a budgetary relief allowance. The NLAC agreed that, along with raising the basic wage to Rs. 30,000, these allowances (Rs. 3,500) be absorbed into the basic wage and discontinued as separate allowances. We obtained Cabinet approval, issued the Gazette, tabled the Bills, and two of the allowance amendment Bills were challenged in court. The aim is not to remove benefits but to consolidate them into the basic wage; however, taken in isolation, one could misinterpret that the Rs. 3,500 is being reduced. Hence only those two Bills were challenged, by two unions not participating in the NLAC. The court indicated sequencing options: first pass the minimum wage increase, then the allowance amendments; or, if proceeding together, pass the allowance amendments by a two-thirds majority. Given salary payments are already delayed—these increases were to take effect from 01.04.2025—we are bringing all three Bills together today to expedite matters.

¶ 08 By way of data: under Act No. 3 of 2016, the monthly floor was Rs. 10,000 in 2016, raised to Rs. 12,500 in 2021 (Act No. 16 of 2021), and to Rs. 17,500 from September 2024 (Act No. 48 of 2024). The daily floor moved from Rs. 400 (2016) to Rs. 500 (2021) to Rs. 700 (2024). With our amendments, when the monthly floor reaches Rs. 30,000, the daily minimum will be Rs. 1,200; between 01.04.2025 and 31.12.2025, the daily minimum will be Rs. 1,080. Thus, the monthly minimum rises by Rs. 12,500—from Rs. 17,500 to Rs. 30,000.

¶ 09 We acknowledge that even Rs. 30,000 is not sufficient for a family in today’s inflationary conditions. Sustainable wage growth must come with economic stabilization, increased investment and productivity, not mere statutory changes. We are pursuing that path—engaging employers and unions, aligning with ILO standards, and improving the overall production relationship in Sri Lanka, to attract domestic and foreign investment. We have stabilized the economy in the first months, progressed with the IMF program, completed four reviews and received the fourth tranche; preliminary discussions for the fifth review have begun. Beyond quantitative performance criteria, the IMF assessed governance; we are advancing the Governance Diagnostic Assessment to build investor confidence and eliminate corruption across government and the economy.

¶ 10 Foreign investment approvals since January have risen markedly through the BOI; we continue to address external risks such as US tariff issues—already reduced from 44 percent to 30 percent, with efforts to reduce further—while countering domestic political attempts to undermine confidence. Today’s wage Bills require our collective support to strengthen workers’ incomes and lay a firmer foundation for investment and productive relations going forward. Thank you.

¶ 11 Question proposed.