By Uditha Jayasinghe
The years-long battle for plantation workers to be given a Rs. 1,000 daily wage wound to a close yesterday after the Government issued the necessary Gazette notification.
The Gazette was issued by Labour Ministry Secretary M.P.D. Mapa after the Wages Board cleared the way on 1 March. Under the Gazette, the basic wage has been raised to Rs. 900 and workers will be given an additional Rs. 100 as a budgetary allowance. The new daily wage will be applicable from 5 March.
Labour Minister Nimal Siripala de Silva hailed the breakthrough yesterday, recounting to reporters the two dozen rounds of talks that had taken place since last August to find a common ground between trade unions, Regional Plantation Companies (RPCs) and representatives of the Employers Federation of Ceylon.
The Minister argued that even though the Wages Board had side-lined the collective agreement, which promoted a more productivity based model, there was still room for increasing productivity in the sector.
“Now that this goal has been reached, I appeal for RPCs and trade unions to work together to improve productivity and develop the plantations industry. At a time when Sri Lanka needs foreign exchange this sector can provide much support to the national economy,” he said.
In January a Cabinet paper tabled by the Labour Minister received approval for the salary issue to be decided upon by the Wages Board as the collective agreement was accepted to have lapsed at the end of January.
In February the matter was placed before the Wages Board after nearly 14 rounds of talks between the trade unions, RPCs and the Employers Federation, talks that had gone on for over two years and still failed to reach an agreement.
RPCs had earlier routinely protested the move insisting it was “unsustainable” as the industry did not have the capacity to earn the additional Rs. 12.5 billion needed to meet the cost companies would have to pay if the daily wage is set at Rs. 1,000.
Companies had also pointed out Sri Lanka was already contending with high costs of production and low global prices, which would result in RPCs having to engage in serious cost cutting measures to meet the increased wage expenditure. The RPCs favoured a basic wage of Rs. 725, a price share supplement of Rs. 50, an EPF/ETF of Rs. 108, and an Attendance and Productivity Incentive of Rs. 225, which has been reintroduced. This, they argued, would take the daily wage beyond Rs. 1,000.
Under the RPCs proposals, a fixed daily wage model would have been applicable for three days a week. On the rest, employees were to be remunerated based on one of two productivity-linked earning models – one where employees will earn Rs. 50 for every kilo of tea leaves plucked, the other being the revenue share model where employees could become entrepreneurs.
However, the trade unions were adamant on a Rs. 1,000 all-inclusive wage, which will now be implemented by the Government.
Hit by the COVID-19 pandemic and other challenges, the Tea industry weathered a tough year in 2020, with exports down and production plunging to its lowest in 23 years, according to a report by Forbes and Walker Tea Brokers.
However, the country’s tea production in January increased by 5% to 23 million kg compared to 21.9 million kg a year earlier, where the boost of production was generated entirely from the low grown sector.
The year-on-year (YoY) low grown sector production increased from 13.3 million kg in 2020 to 14.9 million kg, which is at a three-year high following more favourable growing conditions and availability of fertiliser. But the high and mid growns were lower YoY from 2020 by 5% and 6% respectively.
Sri Lanka Customs data analysed by Asia Siyaka Research confirmed that the country’s export volume in January dropped by 6% to 20.8 million kg compared to 22 million kg shipped in a year earlier. However, the earnings in January increased by 6% to Rs. 19.2 billion ($ 101 million) compared to Rs. 18 billion ($ 99.7 million) recorded in the corresponding period last year.