Business

Planters fear big hit from wage increase

By Charindra Chandrasena

The Planters’ Association of Ceylon believes that Friday’s agreement entered into with the plantation workers increasing their basic daily wage would substantially impact earnings of the plantation sector.

Speaking to The Sunday Morning Business, Planters’ Association of Ceylon Chairman S.S. Poholiyadde said: “This wage increase will be a significant hit to our earnings.”

However, in terms of productivity, Poholiyadde was optimistic that the wage hike would not cause a decline.

He said: “We do not expect this to affect the productivity. The unions have also agreed that they will not obstruct productivity. It was based on those terms that we agreed.”

After months of negotiations, in the presence of the Minister of Labour and Trade Union Relations Ravindra Samaraweera and the Minister of Plantation Industries Navin Dissanayake, plantation sector workers’ unions reached an agreement on Friday (25), increasing their basic daily wage from Rs. 500 to Rs. 700 with several incentives including an additional Rs. 50 under the Price Share Supplement (PSS).

The agreement is expected to be signed next week and will become effective immediately.

It approves the increase in amount paid per additional kilo plucked from Rs. 25 to Rs. 40 without any incentives added.

He added: “If they pluck over and above their norm, they would be paid Rs. 40, which would not include any incentives.”

Sri Lankan tea estates do not have a standard quota and therefore the average pluck of tea usually amounts between 18 kg-22 kg.

“Norms differ from estate to estate, division to division, based on the different potential”, he said.

Since last October, workers demanded a basic salary of Rs. 1000 owing to the rising cost of living.

The Employers’ Federation of Ceylon (EFC) came up with a proposal to increase their wages by 20% which was rejected by the workers.

In December, plantations workers around the island began an indefinite strike, demanding a 100% hike of their daily basic wages and later on called it off upon the order from the Ceylon Workers Congress (CWC).

Meanwhile, the Sri Lanka Tea Board (SLTB) has agreed to release Rs. 100 million from its tea promotional fund to the plantation companies to pay the three-month arrears of the workers.

Speaking to The Sunday Morning Business, SLTB Chairman,Lucille Wijewardena stated: “It has been allocated to the plantation companies through the Tea Board funds to the tea estate workers”.

According to Wijewardena, this was not the first time such allocations had been made by the SLTB.

“The Tea Board has contributed bigger amounts before and has contributed throughout,” Wijewardena said.

However, he said pre-planned Sri Lanka’s global tea promotional campaigns in 2019 would not be affected by this allocation.
“It will not have any impact on promotional campaigns which will begin in April and May,” he said.
Sri Lanka is the fourth largest tea producer of tea in the world. The industry directly and indirectly employs over one million people.