Intercompany employees union opposes funding VCs through EPF, ETF

Wasantha-Samarasinghe

Nov 27, 2015 (LBO) – Sri Lanka’s Inter-company Employees Union on Thursday opposed a budget proposal to create a venture capital structure using EPF and ETF funds.

2016 budget proposed a venture capital approach for providing equity financing facilities to SMEs through the establishment of a fund termed by Finance Minister as a “Fund of Funds”.

The Fund will comprise of stakeholders such as Banks, Insurance Companies, State-Owned funds such as EPF, ETF and foreign funds.

Finance Minister also invited the International Finance Corporation and Asian Development Bank to contribute to the Fund while encouraging the private sector conglomerates too to be part of the initiative.

Chairman of the Intercompany Employees Union Wasantha Samarasinghe however described this as an attempt to rob EPF, ETF funds.

“First, set up a pension structure for the benefit of private sector employees before proposing a structure to rob these funds. No proposals about that,” Samarasinghe emphasized.

“We don’t allow providing loans to businessman after setting up a venture capital with EPF, ETF funds.”

Finance Minister told Parliament that the amalgamation of the EPF and ETF will only be pursued once a consensus has been reached between the government and the trade unions.

Samarasinghe revealed that there is a ongoing project of introducing labour reforms in Sri Lanka with the help of ILO, US Department of Labor and Sweden International Corporation.

Samarasinghe while calling off labour reforms warned the government not to interfere with the eight-hour workday.

“Indeed countries like Sweden move towards to reduce the eight-hour workday further because of efficiency issues.” Samarasinghe said.

Swedish firms have already reduced the 40 hour work week to 30 hours with studies suggesting more productivity.

Finance Minister however said a 5-day, 45 hour week initiative would help companies to reduce their administrative costs and allow employees to have more leisure time and spend more time with their families.

The 5-day, 40-hour work week is believed to be established in the 1920s by Henry Ford, founder of Ford Motor Company.

In an interview, Ford explains why he switched from a 6-day, 48-hour workweek to a 5-day, 40-hour workweek paying same wages.

“Leisure is an indispensable ingredient in a growing consumer market because working people need to have enough free time to find uses for consumer products, including automobiles.”