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Sri Lanka to pay 300,000 public servants to stay at home
Colombo, Nov 20: Sri Lanka today announced cutting 300,000 jobs and offered a severance package that will effectively pay employees to stay at home under an unprecedented voluntary retirement scheme.
Colombo, Nov 20: Sri Lanka today announced cutting 300,000 jobs and offered a severance package that will effectively pay employees to stay at home under an unprecedented voluntary retirement scheme.
Finance Minister K N Choksy said they had been asked to sack 30 per cent of the workforce of 1.09 million workers in the state-sector, but the government decided to come with the severance package.
He said that the golden handshake will cost $ 84.2 million in the first year alone.
Some 100,000 employees are expected to take advantage of the VRS in January and hoped that another 200,000 will leave by 2006. Public servants taking advantage of the VRS will receive a year's salary plus the salary at the time of leaving paid to them for the rest of their lives till they reach the retirement age of 55.
Thereafter, they will be entitled to the full pension which amounts to about 85 percent of the salary. This is the best VRS offered in Sri Lanka so far, officials said.
"We are effectively paying public servants to stay at home," said labour minister Mahinda Samarasinghe defending what he called the generous golden handshake. Those taking advantage of the VRS will have also have small loans up to 24,000 rupees ($252) taken from the government written off.
"Employees with no distress loans or loans less than 24,000 will be paid equal monthly payments over two years so that they enjoy the same total benefit as those whose loans have been written off," Choksy said.
Bureau Report
He said that the golden handshake will cost $ 84.2 million in the first year alone.
Some 100,000 employees are expected to take advantage of the VRS in January and hoped that another 200,000 will leave by 2006. Public servants taking advantage of the VRS will receive a year's salary plus the salary at the time of leaving paid to them for the rest of their lives till they reach the retirement age of 55.
Thereafter, they will be entitled to the full pension which amounts to about 85 percent of the salary. This is the best VRS offered in Sri Lanka so far, officials said.
"We are effectively paying public servants to stay at home," said labour minister Mahinda Samarasinghe defending what he called the generous golden handshake. Those taking advantage of the VRS will have also have small loans up to 24,000 rupees ($252) taken from the government written off.
"Employees with no distress loans or loans less than 24,000 will be paid equal monthly payments over two years so that they enjoy the same total benefit as those whose loans have been written off," Choksy said.
Bureau Report