Case Study - Labour Law 3k193n

PROFESSIONAL QUALIFICATION IN HUMAN RESOURCES MANAGEMENT Industrial Law – Case Study Module 11 By Athula Hewapathirana Commission Officer of SL Navy Manager – Human Resources Lanka Walltile Meepe (Pvt.) Ltd / Lanka Walltile PLC “Western Ceramic Pvt. Ltd.” is a company which manufacturing and selling of ceramic product, owned by a family. The factory is located in a sub-urban area close to the main city. The company started commercial operations before ten years back and enjoyed market leadership in the trade. However, the company’s market share which was around 90% some time back, has been reduced to 20% now, mainly due to poor management directions. The Managing Director of the company has decided to close up the company due to heavy losses of profit during last two years and instructed to the HR Manager to terminate all casual and temporary employees without paying of compensation and to pay only three months basic salaries to all permanent employees, totally 350 employees. MD has expedite and strict on this decision, since employees have not adhered to the targets determined by the company and are not willing to achieve targeted production survive in the business. The employees are not willing to work even there is an urgent order. This company has consisted highly unionize environment. Mainly, employees are induced to the trade union to obtain relief and to win their demands. The employees are not willing to discuss any matters with the management with out the Trade Union being present, since they are suspicious the management decision.

The position of the Trade Union is that Management is not complying with the legal requirments.The main issues are ; 1. No payments are made in respect of any work done in excess of the extra hours of work done on a normal day. 2. Some employees have been placed on no pay even if they had leave to their credit. 3. No additional payments are made in respect of working mercantile holiday and poya day. 4. Some employees have been deprived of the increments and other general facilities since the office bears of the trade union. 5. No contribution has been made for the EPF and ETF in respect of the casual and temporary employees. 6. No separate sanitary facilities are provided for the female employees. 7. Many employees have left the organization and when they were paid Gratuity payment, all recoveries on of festival advance, payments in lieu of notice were deducted from the Gratuity. 8. Two females’ employees were terminated when they asked maternity leave. 9. No compensation was made for three injured employees whilst on duty and the management informed to the trade union that, there is no provision to made compensation. In the above circumstance the HR Manager, discuss this case with the other senior Managers who are positive that the Company be restructured to run at profit. It is matter to motivate the employees by complying with the legal provisions. The Managers also emphasize that it is wrong practice to ignore the Trade Union totally. Finally, the Senior Managers recommend that an impartial outside consultant be engaged to investigate into all the issues and make recommendations.

Therefore, you are entrusted as the Consultant to examine the problem with investigating all issues, ascertain whether there is any breach of legal provisions and make your recommendations. A.

What are the legal implications of the issues raised?

B.

What is the suggested plan of action?