The Sri Lankan state sector and trade unions have a long history. They are integral to the leftist politics that have a wide following since before the island’s independence and are very much a part of the centre-right politics of the country as well. Sri Lanka’s labour movements and hard-won rights have been the envy of others in the region. However, the trade union and the politics linked to it have crippled the nation many times and have exerted a considerable cost on the State. While labour rights and freedom need to be protected, so must the economic resilience and efficiency of state services which the public depend on. However, this side of the story is seldom taken up by rights activists and watchdogs.
Today, Sri Lanka is struggling to secure the relative ‘stability’ it has achieved through much austerity and reform. We have just navigated through one of the most turbulent periods in our history. As such, Sri Lanka can ill-afford disruptions to the state services and the economy at this stage. Trade union action in Sri Lanka is seldom introduced in a gradual level, it is often full-blown strikes and disruptions that the nation wakes up to. The economic toll of these disputes is mounting, measured in lost revenue and also in fractured trust, productivity slowdowns, and the long-term erosion of public confidence in State-run services. Despite these concerns and reality, in recent months, strikes in the postal and railways sectors have revealed both the deep grievances of workers and the cost borne by citizens and the economy at large.
Last month, postal workers launched an indefinite strike that quickly escalated. Postmaster General Ruwan Sathkumara warned about the potential damage, saying: “The immediate financial hit is one concern, but the bigger problem is the possibility of customers turning away from us. If people start using private courier services because of these disruptions, it will be very difficult to win them back, and that kind of long-term damage could be far more costly than the strike itself.”
On paper, the Department of Posts stands to lose between Rs. 25 million and Rs. 30 million for each day of a full strike. However, the Postmaster General stated that the deeper danger lay in reputational loss, as well as the migration of customers to private couriers and digital alternatives, something that could permanently undercut the viability of the State-run service. Already, out of some 600 post offices nationwide, fewer than 160 remained open during the strike, with leave cancelled for all staff. The postal workers have shared their grievances but have also stubbornly resisted the reforms, which are essential, as they have done for decades. This year, with multiple rounds of work stoppages, the Railways Department has also taken to trade union action, and the economic impact has been harder to ignore. Public mobility is significantly impacted when the Railways strike, and it has a crippling effect on industry and day to day life.
According to the Sri Lanka Railways Administration Report 2023, passenger ticket sales generated just over Rs. 13.2 billion for the year, marking a 56% increase from 2022. On average, that translates to around Rs. 36 million in revenue each day, underscoring how costly even a single day of strike action can be. While past reports often cited strike losses in the range of Rs. 15-20 million per day, the official data indicates the real figure is far higher.
The reality is that if there is a strike in the private sector, the sector suffers immediately and the State later on. Nevertheless, the State has options to deal with a private-sector strike. However, in Sri Lanka’s current state-sector configuration and structure, the State is largely helpless when it comes to trade union action of State-Owned Enterprises (SOEs), which also runs the risk of coordinating strikes to pressure the State. The cost to the State, and the erosion of faith in the State apparatus can have a devastating impact. The time is ripe to rethink how Sri Lanka has structured its state sector and SOEs. These vulnerabilities cannot be carried forward as we attempt to get back on our feet and face an ever-changing world. We simply cannot afford the risk, and the cost.