• Over 1,200 Katunayake FTZ staff accept compensation; 200 continue to resist shutdown
• Union claims closure was driven by anti-union motives rather than financial losses
• Company argues Katunayake factory had been running at a loss since 2018
• Payouts exceeded legal entitlements, but cannot force reopening: Labour Ministry

Over 1,200 of the 1,416 former employees of the recently closed Next Manufacturing Ltd. factory in the Katunayake Free Trade Zone (FTZ) have accepted compensation from the employer, while the remaining workers continue to challenge the closure, alleging it to be a union-busting move, the Free Trade Zones and General Services Employees’ Union (FTZGSEU) reveals.

Speaking to The Sunday Morning Business, FTZGSEU General Secretary Anton Marcus revealed that while more than 1,200 of the 1,416 workers made redundant following the closure of the Next Manufacturing factory had accepted compensation, the remaining employees were currently taking part in an inquiry against the company before the Labour Commissioner.

Addressing the demands of the remaining employees, he stated: “They are refusing to accept the justifications given by the company for the closure of the factory. Therefore, they are demanding that either the company be reopened or, alternatively, that they be provided with alternative employment or higher compensation.”

Marcus stated that the narrative advanced by the company to justify the closure clearly suggested that it was part of a union-busting strategy.

“Look at what they are saying. According to them, because of the union, salaries were increased and because of that, they were forced to close the factory down. We have a collective agreement. The collective agreement stipulates how the company is to be closed,” he claimed. 

However, speaking to The Sunday Morning Business, Deputy Minister of Labour Mahinda Jayasinghe stated that Next Manufacturing had paid the majority of its former employees compensation that was more favourable than their entitlement under the Termination of Employment of Workmen (Special Provisions) Act.

Nevertheless, he stated that he was unaware of the facts relating to the continuing conflict between the company and the trade union.

“We can’t force a company to open. If a company is closing down, our responsibility as the Ministry of Labour is to intervene and ensure that the employees are treated fairly. Accordingly, we intervened; that is all we can do,” he stated.

Jayasinghe further pointed out: “The company is alleging that it has incurred significant losses since 2018 at its Katunayake factory and that the factory was operated relying on the revenue of other factories. Therefore, they are saying that they can’t continue to operate in such a manner.” 

Accordingly, he claimed that the Ministry of Labour had fulfilled its role in this particular dispute, which was to safeguard the rights of employees.