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Labour Retrenchment in a Privatisation Programme: Policy Issues from the Sri Lankan Experience

Salih, Rozana; Kelegama, Saman; (1998) Labour Retrenchment in a Privatisation Programme: Policy Issues from the Sri Lankan Experience. Sri Lanka Journal of Social Sciences (SLJSS) , 21 (1&2) pp. 1-36. Green open access

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Abstract

This paper looks at the Sri Lankan lahoul. retrenchment experience during privatization. The experience is traced by looking at how three key issues have heen resolved, namely; (i) voluntary versus involuntary retrenchment; (ii) using a compensation package as a safety net; and (iii) pre-vcl-sus postprivatization retrenchment. It is shown that: (i) a voluntary ~.etiring scheme cannot always he restricted in its application to redundant labour and thus it tends to suffer from the adverse selection problem; (ii) a fixed compensation package appears to be hettcr than a flexihle compensation package, especially if trade unions are characterized by rent seeking hehavioul. and compensation packages are downward iigi4 and(iii) pre-privatization ~eh~nchment may not 1)e the hesL option for every state-owned enterprise because it ignores the post-privatization restructuring options. It is argued that the rettencl~ment experience met with serious problems in resolving all three issues, mainly because of the inflexibility in the Sri Lankan labour market and inadequate design of the re trencliment programmes.

Type: Article
Title: Labour Retrenchment in a Privatisation Programme: Policy Issues from the Sri Lankan Experience
Open access status: An open access version is available from UCL Discovery
Publisher version: https://dl.nsf.gov.lk/handle/1/5060
Language: English
Additional information: © The Author(s), 1998. This is an open access article distributed under the terms of the Creative Commons Attribution-No Derivatives License 4.0 (CC-BY-ND), where it is permissible to download and share the work provided it is properly cited. The work cannot be changed in any way or used commercially without permission from the journal. http://creativecommons.org/licenses/by-nd/4.0/
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL BEAMS
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Maths and Physical Sciences
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Maths and Physical Sciences > Inst for Risk and Disaster Reduction
URI: https://discovery.ucl.ac.uk/id/eprint/10178451
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