FITIS seeks immediate govt. action for speedier ICT sector recovery

•  Amendments to labour and social security laws amongst the demands
• Urges the govt. the importance of safeguarding ICT fraternity to say strong during turbulent times

The Federation of Information Technology Industry Sri Lanka (FITIS), the apex body of the county’s ICT industry, seeks immediate measures from the government for a speedier recovery of the sector including amendments to labour laws and social security laws while retaining its current employee base amidst the COVID-19 pandemic. 

“The broad spectrum of areas which the ICT Industry will continue to contribute will help companies build resilience and reshape themselves for the next normal. Hence, it is important to safeguard the ICT fraternity to say strong during this turbulent time. It is important to plan for recovery now, not later,” FITIS appealed to President Gotabaya Rajapaksa in a letter. 

As a predominantly service-oriented industry, FITIS pointed out that the payroll responsibility of the sector annually accounts to about Rs. 6 billion. Therefore, it sought immediate measures to offer interim amendments to the labour laws to allow for retrenchments whilst ensuring an acceptable amount of pay is received by employees, instead of laying off employees. 

“This will cater to the need of salary/income reductions, pay cuts, reductions and/or non-payment of allowances,” it stated. 

To compliment this measure, FITIS recommended the government to bring in amendments to the laws on Social Security to waive all EPF/ETF contribution from both employer and employee until end financial year 2020-21.
“We propose to waive all EPF/ETF contribution from both parties until end of financial year 2020-21 and that the ‘employee’ would receive the full benefit of the employer contribution value as well to help mitigate deficiencies experienced in salaries,” it pointed out.

Further, the apex body requested the government to reimburse 50 percent of the gross salaries bills of companies who were in operation as at 16th March 2020 until day 0 of the next normal working day.

This measure is expected to support companies to recover a certain amount of funds to their working capital encouraging business continuity and reducing stress on cash flow.  

It also appealed the government to take measures to increase the current Rs. 25 million per bank per borrower threshold up to Rs.40 million as the current threshold might not be sufficient to address the needs of significantly larger companies.

In addition, the apex body also urged the government to provide electricity at a subsidised rate and to sign the World Trade Organization Information Technology Agreement.

“As companies navigate this rapidly developing crisis, ensuring business continuity and saving jobs to secure the talent when the window of recovery opens will be paramount,” FITIS stressed. 

The ICT Industry represents a workforce standing at above 100,000 with a vision to increase the contribution to 200,000 direct employment and US$ 5 billion in exports and enabling the launch of 1,000 start-ups by 2022.