By Charumini de Silva
Members of the Ceylon Workers Congress (CWC) continued their strike for the third week as plantation companies’ efforts to resolve the labour crisis over demands for a higher wage appeared to fall short.
The Employers Federation of Ceylon (EFC) on Sunday had a meeting with the three main plantation trade unions - CWC, Lanka Jathika Estate Workers’ Union (LJEWU) and the Joint Plantation Trade Union Centre (JPTUC) - on the Collective Agreement, where they were still unwilling to accept the 20% increase to Rs. 600 per day by the Regional Plantation Companies (RPCs). “The situation has gone from bad to worse now. We really can’t see any reason why unions should reject such a good offer.
We have offered alternative schemes to encourage and reward productive people who are keen to earn more. However, this unfair wage hike demand by unions is causing severe damage to the Ceylon Tea brand and its market share globally,” sources told Daily FT.
The Planters’ Association of Ceylon (PA) last week revealed that with attendance and productivity incentives and price share supplement, the daily wage will be Rs. 940 per day and if 22 kilos were plucked per day a worker stood to earn Rs. 1,055 per day, which is higher than unions demand.
“Given the ongoing worker strike, the buyers have already made up their minds that Sri Lanka is no longer a credible market and have placed orders in alternative markets to meet their demands. There is going to be a huge negative impact on our tea industry,” he added.
It was also pointed out that Sri Lanka was fast losing its world market share as a result of the continuing strike.
“The worker strike has negatively impacted the start of what is known as the Western Quality Season when teas grown in the hill county region are of their best quality and fetch high prices. The trade union action has really messed up all our markets. We will end up missing the usual export target of $ 1.5 billion and below 300 million kilograms this year. Whatever negotiation or correction we will make now, it will still impact all our future endeavours negatively,” he stressed.
Sri Lanka produces only 6% of global tea supply, while other tea-growing economies like Kenya, India and Indonesia are fast catching up the world market share with larger volumes of supply.
He cautioned that the country was fast losing global market share and particularly premium markets like Japan, while there is already pressure in the Middle Eastern and Russian markets.
In addition to the ongoing industrial dispute, tea prices have slipped about Rs. 60 and they continue to decline every week by Rs. 10 to Rs. 20, while around 30% to 35% of Ceylon Teas are being unsold, creating an alarming situation for the entire economy.
The biannual Collective Agreement wage negotiations reached a fierce situation this year after trade unions issued death threats to some PA members.
“This 150-year-old industry was built with great care and responsibility. But the deadly combination of politics and trade unions is now dragging this glorious industry to its worse times. The damage has been down already, but let’s hope that they will soon realise the gravity and agree with the RPCs’ offer,” he added.