• Trade unions raise concerns over clarity, transparency in wage legislation
• Deputy Minister insists no worker will lose pay under new laws
• Integration of BRA could weaken future wage negotiations, critics warn
• SC previously dismissed union challenges to BRA amendments

The Government has refuted claims by certain trade unions that the recent amendment to the Budgetary Relief Allowance of Workers Acts of 2005 and 2016 would result in the reduction of wages for certain workers.

Speaking to The Sunday Morning Business, Deputy Minister of Labour Mahinda Jayasinghe stated that with the amendment of the Budgetary Relief Allowance of Workers Acts of 2005 and 2016, the payment of Budgetary Relief Allowance (BRA) would cease as it would be included in the minimum wage by then.

Responding to an allegation by certain trade unions and activists that with the cessation of payment of BRA, people earning between Rs. 27,000 and Rs. 40,000 would stand to lose the benefit of the Rs. 2,000 BRA paid under the 2016 act, he claimed that there was no truth to such assertions and that the wages of workers would not change. 

“The National Labour Advisory Council (NLAC) and the trade unions represented in the NLAC have accepted the cessation of BRA payments,” he stated.

He further remarked that despite certain trade unions having previously challenged these bills before the Supreme Court on the same basis, such challenges had been unsuccessful. Accordingly, he concluded that the present assertions were without merit.

“The BRA will be added to their basic salary,” he stated. 

The National Minimum Wage of Workers (Amendment) Bill, increasing the minimum wage to Rs. 27,000, was passed with amendments and without a vote on Tuesday (22). 

Similarly, the Budgetary Relief Allowance of Workers (Amendment) Bill to amend Act No.36 of 2005 and the Budgetary Relief Allowance of Workers (Amendment) Bill to amend Act No.4 of 2016, both of which seek to conclude the payment of the respective allowances with effect from 31 March 2025, were passed by Parliament on Tuesday without any dissenting votes.

Speaking to The Sunday Morning Business, Commercial and Industrial Workers Union (CIWU) and United Federation of Labour (UFL) President Swasthika Arulingam said that the Government had justified the removal of the payment of the BRA by claiming that it was now included in the minimum wage that had been increased to Rs. 27,000 by the new Minimum Wage of Workers Act. 

“The Government’s argument is that the BRA has been included in the minimum wage. Therefore, we have the right to abolish the BRA,” she stated.

However, Arulingam asserted that the Government’s position overlooked a fundamental issue: when the BRA is maintained as a distinct component separate from the minimum wage, it affords workers the latitude to advocate for increases in allowances. 

Conversely, its absorption into the minimum wage creates space to resist such demands on the basis that the BRA now constitutes an inseparable element of the minimum wage. As a result, any proposed adjustment thereto would be too complicated, thereby effectively limiting any potential increase to nominal increments in the minimum wage, which historically have been demonstrably marginal. 

Furthermore, Arulingam stated that the recent amendments to the Budgetary Relief Allowance Acts were also silent as to whether the workers who were paid between Rs. 27,000 and Rs. 40,000 would continue to receive the BRA.

“What the Minimum Wage Act says is that the minimum wage will include the BRA, so the new minimum wage of Rs. 27,000 will include the BRA. But let’s assume you are a worker who gets paid less than Rs. 40,000 as basic wage. In such an instance, does your BRA fall into the Rs. 27,000 or should it be laid out separately in your pay sheet? None of this is very clear in the legislation that has been passed,” she stated.   

Arulingam further said that, contrary to the claims by the Government, the actual increase in the minimum wage amounted to only Rs. 6,000, rather than the purported Rs. 17,500-27,000 hike. This discrepancy arises from the inclusion of the BRA within the revised minimum wage, which had previously been treated as a separate entitlement.

Elaborating on the history of the payment of the BRA in Sri Lanka, she stated: “In 2005, we had the Budgetary Relief Act, which stated that anyone getting below Rs. 20,000 would get a BRA of Rs. 1,000. Then, in 2016, another BRA act was passed; it was not an amendment but a new act that provided that anyone getting below Rs. 40,000 will get a BRA of Rs. 25,000. 

“As a result, from 2016 onwards, anyone getting below Rs. 20,000 would be entitled to Rs. 3,500 as BRA, because of the Rs. 1,000 in the 2005 act plus Rs. 2,500 in the 2016 act. Similarly, anyone getting below Rs. 40,000 would be entitled to Rs. 2,500 as BRA.”

Arulingam further asserted that it had recently been uncovered that certain employers had completely ignored their obligation to remit BRA payments. She emphasised that the failure to pay BRA was similar to non-compliance with EPF and ETF requirements and constituted a statutory offence.