SOCIAL SECURITY in

EMPLOYMENT

U. WASHEEM AHAMED,
LLB, B.Tech HND, PgD.LRHRM(Merit), M.LRHRM
Attorney at Law, Notary Public, Company Secretary,
Commissioner for Oaths
Visiting Lecturer,
The Open University of Sri Lanka
&
Sri Lanka Institute of Advanced Technological Education
1
 What is mean by Social
Security in Employment ?
Social Security is not a new concept to the world it begins form
the very early stage even not from the thought of human rights
but started from Natural Rights.

“The most perfect system of government is that

which produces the greatest amount of happiness,
the greatest amount of social security and greater
amount of political stability”.--Simón Bolívar
(1819)

Social security in Employment is admire as a basic human right

involves access to health care and income security, particularly in
cases of old age, unemployment, sickness, invalidity, work injury,
maternity or loss of a main income earner
The structure of the Social Security maintained by respective
states through Social Insurance Programs.
Only 20 per cent of the world’s population has adequate social
security coverage and more than half lack any coverage at all.

Contributory
Scheme
Social Security
Scheme Non-
Contributory
Scheme

Contributory schemes means the employee ( Beneficial Owner)

Should contribute a monetary contribution to assure his future and
sudden benefits.

Non Contributory Benefits are relied on employer’s contribution for

employees and largely depend on state's contribution. The developed
states forward this method and promote the Social Security
schemes in Social Security mostly in case of Unemployment
benefits.
ELEMENTS OF SOCIAL
SECURITY
 Social Security Under International
Human Rights Instruments.
UDHR article 25 (Right to social Security)
Everyone has the right to a standard of living adequate for the
health and well-being of himself and of his family, including food,
clothing, housing and medical care and necessary social services,
and the right to security in the event of unemployment, sickness,
disability, widowhood, old age or other lack of livelihood in
circumstances beyond his control

ICCPR Article 9 ( The right of every one for Social Security

including Social Insurance)
Convention on elimination of All Forms of Racial Discrimination
( Article 5)
Convention on elimination of all forms of discrimination against
women (Article 11)
Convention on the Rights of Children (Article 26)
SOCIAL SECURITY IN EMPLOYMENT
ENRICHED IN ILO
ILO is an international Body which works to
protect and promote the labour standards in all
over the world.

Therefore it has numerous legal instruments to

protect labour interest including to promote
Socail Security all over the world.

We have summarized some vital instruments

which directly deal with the concept of Social
Security in Employment.
Sri Lanka’s Ratification on ILO
Conventions in Socail Security
Ratio.
Conventions of ILO

0%

40%

60%

Ratified By Sri Lanka

Not Ratified By Sri Lanka

C102 - Social Security (Minimum
Standards) Convention, 1952
We mentioned this ILO convention on Social Security in Employment because it is the
very fundamental convention in all of other Social Security conventions but the vital
consideration is until now it never ratified by Sri Lanka.

This convention convened on Thirty Fifth Session at Geneva on 4th June 1954.
The convention contains many elements of Social Security as the same time provides
the flexible measures based on the satisfactory discretion to the Director General of
ILO.

Article 07 of the Convention require the contracting party to provide adequate

medical assistance and health care systems for their employees.

Article 14 speaks about Sick Benefits and require the contracting states shall cover
including incapacity for work resulting from a morbid condition and involving suspension
of earnings, as defined by national laws or regulations.

Article 20 Speaks about the unemployment benefits the contracting states should
take adequate measures to protect the persons on unemployment.
Article 25- All contracting states according to their capability should maintains Old
age benefit to its nationals.

Article 31- All contracting countries should maintain the standard of safe and healthy
work placer and pave the way to Employment Injury Benefit

Article 39- Contracting parties provide Family Benefit to its employees including
matrimonial and Child care benefits.

Article 46- All contracting States provide Maternity Benefit further pre and post
pregnancy care.

Article 53- All contracting parties maintain the Invalidity Benefit and continues
proper care those who fell in purview of Invalidity.

Article 59- All contracting parties give successive rights for dependents and make
schemes. Survivors’ Benefit

Article 68- Require the states to give equal status on social Security Schemes for
Non- Residents
 ILO V SRI LANKA
Ratifying Relevant National
Element ILO Convention
Status Legislation

C130 - Medical Care and Sickness Benefits

Medical Wants
Health Benefit Convention, 1969
Ordinance

Janasaviya Act (No. 4

of 1989) and
C168 - Employment Promotion and Protection
Unemployment Samurdhi Authority
against Unemployment Convention, 1988
of Sri Lanka Act (No.
30 of 1995)

Family and Child C156 - Workers with Family Responsibilities No provisions in

Support Convention, National level.

Maternity Benefits
Ordinance of 1939
C103 - Maternity Protection Convention and Shop and Office
Maternity benefits (Revised), 1952 Employees Act and
Health Services Act,
2000
 The Pension Fund, ETF
Act No 46 of 1980, EPF
C128 - Invalidity, Old-Age and Survivors'
Old Age Benefit Act No 15 of 1958 and
Benefits Convention, 1967
Payment of Gratuity Act
No 12 of 1983

Workmen's
C121 - Employment Injury Benefits Compensation Ordinance,
Injury Benefits Convention, 1964 [Schedule I amended in 1934 and Shop and Office
1980] Employees Act, 1954,
Factories ordinance.

Workmen's
C159 - Vocational Rehabilitation and Compensation Ordinance,
Disability benefit and
Employment (Disabled Persons) Convention, 1934 and Shop and Office
Protection
1983 Employees Act, 1954

The Workmen
Compensation ordinance,
Provisions for Survivors C128 - Invalidity, Old-Age and Survivors'
The Public and Private
and Orphans Benefits Convention, 1967
Sector benefits through
pension and Lump Sum
 Social Security in Other
Jurisdictions
Italy
The Italian Social Security system is managed by the
National Social Security Institute which provides
benefits to employees and the self-employed in case
of illness, maternity/paternity or unemployment. It
also oversees family allowances and provides benefits
for the elderly and disabled.

Switzerland
The social Security in employment administered by
different canton and Federal Agencies. The schemes
are devolved as compulsory and voluntary. Most of
the key benefits include with compulsory and
supplementary benefits categorized as voluntary.
Sri Lankan Standard on Socail
Security in employment
When comparing with other East Asian
countries Sri Lanka has the good approach
towards the labour protection and effective
promotion on social security in employment

But while comparing the international standards

and developed countries’ standard, we still exist
in back ages.
 Constitutional Guarantee in Sri
Lanka for Social Security
We have no direct provisions dealing with Social Security under
fundamental rights Chapter but through 12(4) the
advancement of Women and Children ensured. It may useful to
consider the basic social protection for valuable group in
community.

Further 14(g) and 14(d) ensure the rights respectively to

engage in any lawful occupation and trade union freedom.

Further under Directive principles of State policy, Article 27(9)

express that The State ensure social security and welfare. In
addition article 27(2) (b) and (c ) speaks about the state’s
responsibility to provide the basic standards of living.

Last but not least section 27(15) speaks about the responsibility
to obey the International Instruments.
It was ensured by Eppawala Case
Sri Lankan National legal Perspective
in Social Security
Under Sri Lankan legal perspective many laws cover different areas
of Socail Security in Employment. Most of them are Labour
legislations and some of them covered under financial regulations.

Under the respective acts legislature of Sri Lanka established and

entrusted different governmental bodies to monitor the social
security for an example.

For Private Sector Benefit under EPF system Central Bank of Sri
Lanka is responsible for the good returns to its members. (The
Employees federation of Sri Lanka very recently blamed on that the
returns for EPF members)

The Self employment system, the Socail Security Board of Sri Lanka
has the responsibility towards protect its members.
Sri Lankan Laws to Cover the Socail
Security
1. Employee’s Provident Fund Act No 15 of 1958
“it covers some class of employees and the
contributory fund administered jointly by labour
department and CBSL. It has the responsibility to give
proper higher returns to its members”
Minimum contribution 12% & 8%

1. Employee’s Trust Fund Act No 46 of 1980

the truest fund give the status to the employee as
administrator, the Contributory ratio is 3% on his
salaries.
3. Payment of gratuity Act No 12 of 1983
The gratuity can be claimed by the employee who worked
for five or more. The labour tribunal has the power
through Industrial dispute Act section 31B (1) (b) to settle
the gratuity for workmen.

In Devanayagam case the labour tribunal held the due is

not consider as legal but relief on just AND EQUTABLE.

In Silva V southern freighters Ltd 74 NLR 239, Court held

that 8 year service period is long enough to calming the
gratuity
 The national Union of Workers v Scottish Ceylon tea
company ltd 78 NLR 133

In this case supreme court of Sri Lanka finally clear

the issues on gratuity claims and said that,
uninterrupted service for 5 years is give entitlement for
gratuity benefits but domestic servants and the
pensioners under non- contributory schemes excluded
from the benefit of gratuity.

4.Termination of Employment (Special provisions) Act

no 15 of 1971
 Payment of Gratuity Act
Part II
 “Every employer who employs or has employed fifteen or
more workmen on any day during the period of twelve months
immediately preceding the termination of the services of a
workman in any industry shall, on termination (whether by the
employer or workman, or on retirement or by the death of the
workman, or by operation of law, or otherwise) of the services
…of a workman who has a period of service of not less than
five completed years under that employer, pay to that workman
in respect of such services, and where the termination is by the
death of that workman, to his heirs, a gratuity computed in
accordance with the provisions of this Part within a period of
thirty days of such termination.” [S.5(1)]
Surcharge
 Any employer who fails or defaults to pay
gratuity on or before the due date shall
pay a surcharge. [S.5(4)]
Rate of Payment
 Half a month’s wage or salary for each
year of completed service.
 Fourteen days’ wage or salary for each
year of completed service.
[S.6(2)]
Limitations on Application
 “The provisions of section 5 shall not
apply to or in relation to a workman-
(a) employed as a domestic servant or as
a personal chauffeur in a private house-
hold; or
(b) entitled to a person under any non-
contributory pension scheme.” (S.7)
Alienation of Business
 “Where an employer sells or otherwise
alienates any land or establishment within
a period of five years of his becoming
such employer, the period of service of
any workman under that employer shall
be added to the period of service of that
workman under the new employer in
computing the gratuity payable to that
workman by the new employer.” (S.14)
Wages or Salary
 “ ‘wages or salary’ means
(a) the basic or consolidated wage or
salary
(b) cost of living allowance, special living
allowance or other similar allowance; and
(c) piece rates.”
(S. 20)
Wages Boards Ordinance
 Wages Boards – tripartite bodies for
specific trades
 Terms and conditions of employment
 Time limits for payment of wages: weekly
- 3 days; fortnightly - 5 days; fortnight to
one month – 10 days.
 Deduction up to 50% from total wages
(special circumstances up to 75%)
Wages Boards Ordinance
 Rate of wages
 Rate of overtime
 Working day, working week, working
month
 Intervals for meals or rest
 Weekly holidays, public holidays, annual
leave
E.P.F Act
 E.P.F – Contribution by the employer and
employee
 Contribution
Employer 12% - Employee 8% - total earnings
Earnings – wages, salary or fees, cost of living
allowance, special living allowance, other similar
allowances, payments in respect of holidays, cash
value of cooked or uncooked food and meal
allowance (bonus and overtime payments
excluded)
 Surcharge for delays
5% - 50%
 E.P.F Act
 Payment
 Male 55 years and females 50 years and ceases
employment
 Female ceases to be employed in consequence
of marriage (3 months/5 years)
 Unfit for work
 Departure from Sri Lanka
 Pensionable appointments
Recovery
 Sections 17, 38(1) and 38 (2)
 Dayawathie v. Edirisinghe S.C. (F/R) No.
241/08 – Proceeding under sections 17,
38(1) and thereafter 38(2)
 Proposed amendments – withdrawal for
housing benefits or medical treatments –
insurance and pension scheme
E.T.F Act
 E.T.F – Contribution by the employer
 Contribution
Employer 3% of total earnings
Earnings – wages, salary or fees, cost of living allowance,
special living allowance, other similar allowances,
payments in respect of holidays, cash value of cooked or
uncooked food and meal allowance
 Surcharge for delays
5% - 50%
 Payment – ceasing to be an employee – not more than
once in a period of five years except disablement
 Non-contributory benefits – Insurance, financial
assistance and awards
Socail Security in employment
in Different sectors

1. Social Security Schemes for public sector

workers

2. Social security schemes for private sector

workers

3. Social security schemes for workers in the

informal economy
 Social Security Schemes for
public sector workers
01.Public Servants’ Pension Scheme (PSPS),
Establish in 1901and make compulsory and
financed by public treasury fund.

02. Public Servants’ Provident Fund (PSPF)

was established in 1942 as a mandatory
contributory old-age benefit scheme for
government employees not eligible for coverage
under the PSPS

03.Widows and Orphans Pension (W&OP)

scheme.
Social Security for Private Sector
employees
The main schemes covering private sector workers are

01.the Employees’ Provident Fund(EPF)

02.the Employees’ Trust Fund (ETF)

03. the Approved Private Provident Funds (APPFs).

Socail Security for Self Employed
personal
There is no strict regulations to cover the benefit for self
employed personal. But government of Sri Lanka
implementation some schemes to protect self employees.

01.Farmers pension and social benefit scheme 1987

02.Fishermen pension and social benefit scheme 1990

(Eriyagama V Rannan Eliya)

03.Pension and social security for self employed

personal
 MATERNITY BENEFITS
Sri Lanka has two different approach

01. Maternity benefits ordinance no 32 of 1939

covers workers under the factories ordinance where 12 weeks
in respect of the first two live births 6 weeks working days
leave in respect of the third and subsequent births for
confinements resulting in the issue of a viable fetus.

02.Shop and office employees act

No covers the private employees 84 working days leave in
respect of the first two live births 42 working days leave in
respect of the third and subsequent births for confinements
resulting in the issue of a viable fetus.
 Criticism on Sri Lankan
Maternity Benefits

When Comparing with other countries the develop

countries allows the paternity benefits in Italy father
entitle for unpaid 13 weeks leave for all birth. But in
the spectrum of Sri Lanka there is no legislative back
born for paternity benefits.

Further the option given to employee to break the

legal facility for leave and return the work after
mandatory leave period.
 Social security Board of
Sri Lanka(SSB)
In Sri Lankan Purview there is no compulsory old age or pension benefits for
informal sector workers. Some specific targeted social insurance schemes are in
active like agriculture insurance schemes but those not cover a large quantity of
Category.

This board Establish under the Social Security Board Act 1996 as amended by
1999 under Ministry of finance and Planning.

This board enlarged its services under “Mahintha Chinthana” .

At present the Social Security benefits schemes are operational for those in self-
employment, private sector employees, foreign employees, professionals,
arts and craftsmen and industrialists.

Under this board’s Scheme the benefits on Life time monthly pension,
Total Disablement Benefits, Partial disable benefit and Death Gratitude.
They have different social Insurance Schemes called Surakuma and
Arassawa any employee can join under the scheme with the
minimum subscription amount SLR 1000.
Source : Social Security Board Web
 Recommendations
1. Sri Lanka Should ratify and implement the ILO Convention C102 - Social
Security (Minimum Standards) Convention, 1952 and related instruments.

2. While take a little satisfaction on other elements of Socail Security but the
unemployment benefits and paternity benefits are in very low level. The
Termination of employment of workers act (TEWA) . So the legislature
should take forwarding's to cure this gaps.

3. The health Care insurance should be maintained as compulsory by the

government and the financial allocation also should increased. (Like
Switzerland)

4. Right to health should be constitutionalized (Like South Africa)

5. Existing Beneficial system should be decentralized and give proper

awareness to the particular target group.

6. The allocation of Budget financing ratio in Social welfare and Social Security
should be increased. (Like in Singapore)

7. A corporation link should be established between Asian nations to

coordinate the social security benefit scheme like European Union
Coordination.
Discussion

41
THANK YOU

42