Plantation wage hike deadlocked beyond deadline

The estate sector wage hike remains stuck in a stalemate, with plantation companies awaiting a decision from the Government and trade unions.

“We have not heard a decision from the Government yet although we have submitted three alternatives,” Regional Plantation Companies (RPCs) told the Daily FT.

RPCs proposed three models, including out-grower, productivity-based incentives and revenue sharing.

“We have done our part and it is now the Government’s responsibility,” the RPCs added. 

An Employers’ Federation of Ceylon (EFC) spokesperson also noted that it had not been informed of a decision on the estate wage hike thus far.

The hike, starting from this month, was proposed by the Government. Despite multiple attempts, Plantation Industries and Export Agriculture Minister Dr. Ramesh Pathirana or Treasury Secretary S.R. Attygalle were not available for comment.

The Rs. 1,000 wage increase was first promised during the Presidential Election campaign by Gotabaya Rajapaksa, to win the support of the estate worker community. On 14 January, the President said the Government had taken several initiatives, such as a tax exemption and fertiliser subsidy, to increase the quality of this vital sector. The President emphasised that these benefits should pass on to workers.

The EFC urged the Government to abandon the move to hike estate workers’ daily wage by 17% or Rs. 145 to Rs. 1, 000 from March 2020, noting that if the proposed increase were to be mandated on the RPCs it would be inconsistent with the legal provisions as well as values of the “core” ILO Convention 98 on collective bargaining.

Last week, trade unions said that they would not give in to a conditional pay hike, while insisting on a straightforward Rs. 1,000 daily wage.

Meanwhile, the Ceylon Workers’ Congress (CWC), the leading trade union which represents plantation workers, backed out, claiming that some of the proposals by the RPCs were unfavourable for plantation workers.

In addition, the United National Party-linked Lanka Jathika Estate Workers Union (LJEWU) General Secretary and former Parliamentarian Vadivel Suresh told journalists last week that the Government must not play politics over the pending wage hike for plantation workers, while insisting that it must be paid with arrears, without linking to productivity.

Plantation unions are concerned that the wage increase will come with strings attached, where workers will have to pluck more tea and will be subjected to more mandatory work hours, in addition to the new productivity-linked model.

The trade unions demanded a minimum wage of Rs. 1, 000 for workers during the renewal of the previous biennial collective agreement but eventually reached an agreement with RPCs for a minimum daily wage of Rs. 855 with a basic daily wage of Rs. 700.

According to the present collective agreement between RPCs and trade unions, workers receive a daily wage of Rs. 855, which consists of a basic daily wage of Rs. 700, Rs. 40+ for each additional kilogram of tea leaves plucked, and a daily EPF and ETF transfer of Rs. 105.

Noting that the labour component contributes to nearly 70% of the cost of production of RPCs, they estimate that the 17% or Rs. 145 hike will shoot up the wage bill to Rs. 12 billion (including gratuity).