- Ports Authority seeks Cabinet approval to give VRS to 921 employees
- Cost so far Rs. 2.6 billion
- Total of 2,380 to be retired
By Cheranka Mendis
In an effort to become more efficient, the Sri Lanka Ports Authority (SLPA) is seeking Cabinet approval to provide a Voluntary Retirement Scheme (VRS) for 921 employees as part of a larger plan that will see the workforce trimmed by 2,380 people.
The first batch of 550 employees was sent on the VRS at a cost of Rs. 891 million in May 2011.
The SLPA yesterday acknowledged that a total of Rs. 2.6 billion was used to retire 1,459 employees by end August. This is inclusive of the batch in May.
The scheme, which was brought forth to cut back the currently overstaffed SLPA with an employment base of 12,550, has managed to spend less than the expected Rs. 4.1 billion. It has also managed to reduce recovery time from 19 months to 12 so that the expense can be recovered faster.
Sources from the authority speaking to Daily FT stated that the 1,459 who have been discharged have been from what they define as a ‘Special Group’ or ‘Group One,’ where the employees have completed more than 10 years of service and have five years or more for retirement. The compulsory age of retirement at the SLPA is 57.
The authority is now dealing with ‘Group Two’ applicants, which consists of 921 employees who have less than five years for retirement. “We are preparing a cabinet memorandum to get approval to release the 921 who we think can be spared. In the earlier proposal this category of people was not included. We need to now make a fresh appeal,” sources said.
The authority is said to have received a total of 2,398 applications (Group One and Two) as at 6 May this year, even though the expectation was a response of 2,000. When Daily FT contacted the authority in June, sources noted that a VRS worth Rs. 891 million had already been paid by 31 May.
The second group’s applications will be on hold until Cabinet approval is received, sources said. “Keeping them in the authority is baseless. They are already asking to leave. Their commitment to the organisation is minimal and they are not at all profitable to the authority. We are awaiting the legal requirement to give them an early retirement. The authority has already prepared the skeleton document and its Financial Department is now in the process of accumulating the necessary calculations of how much money is needed to pay off the second group. The plan is to wave goodbye to this set by the end of the year.”
“It will take a bit of time,” sources said. “This is because we are spending our own funds. We need to recover a certain amount to pay off all 921 of them. We need to gather our savings. However, our initial recovery period of 19 months has now been cut down to 12 as we managed to save Rs. 1.5 billion from the original Rs. 4.1 billion budgeted for the first group’s compensation.”
The need for the staff layoff came with the authority introducing automated information systems along with automated delivery, discharge, payroll and biometric systems, which has reduced the requirement of manual labour in large numbers.
A circular was issued regarding the VRS on 5 April this year and the applications were closed one month after. The initial batch of payment worth Rs. 891 million was paid off to 550 selected applicants by end May.