Plantations win uneasy peace; insist relief must come in Budget

By Chathuri Dissanayake 

Breaking an 18-month deadlock between unions and plantation companies, stakeholders yesterday agreed to a daily wage of Rs. 730 despite the absence of customary payment of salary arrears, which companies contended would be unaffordable. 

The final agreement was hashed out after several meetings last week involving Labour Relations Minister John Seneviratne and Plantations Minister Navin Dissanayake. However, the Planters Association (PA) maintained that the inclusion of its call for a productivity-based salary scheme in the latest document was motivation to sign the agreement despite having “serious reservations” about the industry’s ability to honour the payments. 

However, the industry expects the ongoing negotiations with the Government for concessions to be fruitful, PA Chairman Sunil Poholiyadde told Daily FT, enabling them to meet the Rs.730 daily payment.  

A statement released by the PA also stressed that “the agreement as it stands in its final form is one which still places the tea industry and the livelihoods of all Sri Lankans employed in the sector in serious jeopardy.” 

The plantation companies cannot simply afford to pay arrears, Poholiyadde explained. Despite concerns, the PA is positive about reaching an agreement to switch to a wage formula that is linked to productivity, which the industry described as “an extremely important step” that would lead to a revenue sharing model. The PA believes the revenue sharing model is the only viable method for industry sustainability. 

According to the new wage formula, the daily wage is calculated at Rs. 500 as a basic wage with additions of Rs. 50 as an attendance incentive, a Price Share Supplement of Rs. 30 and a productivity incentive of Rs. 140. 

Workers will also be paid an additional productivity incentive of Rs. 25 per kilogramme for green leaf harvested above the estate/divisional norm. 

The companies are also in discussion with the Plantation Minister to win back the subsidies and concessions that were discontinued in the last Budget. According to Poholiyadde, the agreement was signed with the expectation of receiving subsidies and concessions from the Government in the upcoming Budget that will be delivered in Parliament on 10 November. 

Further, the PA is also negotiating a solution to deal with the blanket weedicide ban currently imposed by the Government. “It is not viable for commercial agriculture operations of this nature to not use chemicals. If there is a ban then the research institute should at least give us viable alternatives. We are currently negotiating a settlement in this regard as well,” he added. 

“It is with the expected assistance of the Government and productive contribution of the workers that this salary hike is possible,” Poholiyadde highlighted.  

The Ceylon Workers’ Congress (CWC), which is the country’s largest estate sector workers union, maintained that it would not accept a productivity-based model. In its view the latest agreement was accepted on the basis that 300 days of work would be provided for workers in line with previous agreements. 

The CWC claimed negotiations for arrears would continue until the union was able push the companies to pay, CWC Parliamentarian Muttu Sivalingam said. 

“We signed the agreement under protest. We will continue negotiations. There is an interim negotiation which only the Government union, the Lanka Jathika Estate Workers Union, has signed with a clause saying that unions agree to not being paid arrears after a final wage agreement is reached. Since we have not signed it we shall keep negotiating,” Sivalingam told Daily FT. 

Accordingly, the CWC stated that it would negotiate with the plantation companies to obtain the arrears due to workers until 15 October. 

However, Development Strategies and International Trade Minister Malik Samarawickrema, a key negotiator in the wage discussions, insisted that all parties, including the CWC, had agreed not to demand payment of arrears due to issues faced by the tea industry.