Sri Lanka employers should have closer dialogue with workers: ILO

Mar 02, 2010 (LBO) – Businesses can ride out economic downturns easier by having stronger relations with their workers through collective bargaining; an approach used countries like in Germany, an International Labour Organization (ILO) official said. Curtis was speaking at the tripartite workshop on freedom of association in collective bargaining in Sri Lanka, Nepal, the Maldives and Bangladesh held in Colombo.

German companies keep a very good relationship with their workers and communicate frequently on challenges the business might face in future, Curtis said.

Both Germany and Japan had good labour relations and strong export growth in the 1970's when many developed countries had high inflation, strikes, wage hikes and a decline in their industrial sector.

The world went to the so-called 'Great Inflation' period following the Vietnam war as the US printed money and the dollar finally went off the gold standard in 1971 to become a floating currency fuelling an 'oil shock' and commodity boom.

In a landmark study in 2007, Edward Nelson, a US Federal Reserve economist, showed that the good labour relations in German called 'Concerted Action' was made possible by the early stamping out of inflation by the Bundesbank.

Nelson's