RPCs give three options to Govt. on estate wage hike

Monday, 17 February 2020 02:01 - - {{hitsCtrl.values.hits}}

By Charumini de Silva

Plantation Industries and Export Agriculture Minister Dr. Ramesh Pathirana says no final decision has been made yet on the three proposals submitted by the Regional Plantation Companies (RPCs).

Accordingly the three models proposed by the RPCs include outgrower, productivity-based incentives and revenue sharing model.

“We are still in the process of exploring how best we can work this out, to be able to provide a Rs. 1,000 daily wage for the estate workers March,” the Minister told the Daily FT.

With few more days to finalise the modality of the wage hike, when asked the Minister of the three proposals which seems to be considered best option, he said it was still difficult to disclose as the discussions with stakeholders were still ongoing.

It was said that discussions with Secretary to President Dr. P.B. Jayasundera, RPCs, trade unions and the Plantation Industries and Export Agriculture Ministry were still continuing.

Noting that the basic wage increase is Rs. 145, the Minister previously said that they were considering whether it can be borne by the Government for a short period, given that the RPCs and workers also improve their productivity.

Dr. Pathirana was also of the view that the RPCs would be in a better position once the savings on tax cuts and relief on fertiliser come into effect.

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

According to the present Collective Agreement between RPCs and trade unions, workers receive a daily wage of Rs. 855, which consisted of a basic daily wage of Rs. 700, Rs. 40+ for each additional kilo 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), higher than the value of the bond scam.