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Daily wage hike for plantation sector | The illusive cuppa

24 Jan 2021

  • Ministry to step in if stalemate continues 
  • Productivity-based model from end Jan: RPCs
[caption id="attachment_115424" align="alignleft" width="300"] An estate worker participates in a protest staged by the Estate Workers Centre demanding from the Government to increase their daily basic wage to Rs. 1,000 as promised the previous year, Colombo Fort Railway Station, 21 January 2021. PHOTO SAMAN ABESIRIWARDANA[/caption] By Sarah Hannan  Increasing the daily wage for plantation workers to Rs. 1,000 has been long perceived as an election promise that never materialised, and the back-and-forth negotiations between the heads of Regional Plantation Companies (RPCs), trade union (TU) leaders, and the incumbent Government have delayed the matter by yet another year.  When the present Government assumed office, it was President Gotabaya Rajapaksa’s promise to ensure that the daily wage issue would be sorted out immediately, and the Rs. 1,000 daily wage that was promised for the plantation worker was to come into effect by 1 March 2020.  The delay in reaching agreements later forced the governing political party to look at including this as a budgetary promise for 2021, which has led to the RPCs proposing a productivity-based pay model that includes the following proposals: 
  • A fixed daily wage of Rs. 1,105 with the re-introduction of attendance and productivity incentives 
  • Increase the earning of plantation workers by 30%, while removing an upper limit on wages 
  • A productivity-based pay model – a fixed daily wage is to be offered thrice a week, while the productivity-based pay model will be exercised on the other days 
  • The productivity-based model will come into effect under two key performance indicators, where Rs. 50 is to be paid for every kilo of tea plucked, and Rs. 125 for every kilo of rubber latex made 
Government won't force collective agreement  The Sunday Morning contacted Minister of Labour Nimal Siripala de Silva to inquire on the progress following last week’s meeting with the RPC chairmen, and whether the TUs have been informed about the proposed pay model.  De Silva revealed that the negotiations are at a stalemate, as the RPC heads and TUs have not arrived at a collective agreement. He added: “When the RPCs propose their wage structures, the TUs continue to disagree and are requesting that the increment of Rs. 1,000 should factor in the basic wage that is to be increased to Rs. 725, and the additional components such as productivity incentive, attendance incentive, and price share supplement, which should be factored in when the Rs. 1,000 wage is formulated.”  The Labour Minister explained that the RPC heads are willing to pay the Rs. 1,000 daily wage, but have not agreed to increase the basic wage from Rs. 700 to Rs. 725. Moreover, the RPCs had also stated that they are not going to add the price share supplement to the plantation workers’ wages.  “The wage structure that the RPCs have proposed is to offer the Rs. 1,000 daily wage by adding the productivity incentive and attendance incentive to the Rs. 700 basic daily wage. So the difference is not about the sum, but about the components that the RPCs will be factoring into the wage formulation,” de Silva elaborated.  He noted that he is not in a position to force a collective agreement upon the RPC heads and the plantation worker TUs, as both parties should come to terms with the proposed wage structure amendments and devise a collective agreement on their own terms.   Alternatives to be considered   “In my view, it is better to have a collective agreement, as the workers would receive a fair wage, and they could suggest the terms on which the daily wage structure should be designed around. However, should these parties fail to achieve or reach an agreement in the coming weeks, I will have to think of a new modality on delivering the promised daily wage increment to the plantation workers,” de Silva opined.   The Labour Minister indicated that he would have to call a meeting with the relevant Wages Board and propose an increase of the basic wage to Rs. 860, for which the Government can pitch in the allocated budgetary allowance of Rs. 140 and increase the plantation workers’ daily wages to Rs. 1,000.   However, de Silva said that he has given the two parties more time to arrive at a settlement over the daily wage increment issue by the end of this month, failing which he would take action according to the Cabinet paper he has forwarded for approval regarding the Ministry amending the wage structure.  We then asked the Minister of Labour whether there would be an impact on plantation worker daily wages from the amendments proposed to take place to the National Minimum Wage of Workers Act No. 03 of 2016.   De Silva responded: “The daily wage structure that is discussed and in effect at the moment will have no impact from the amendment, as the plantation workers’ monthly earnings are way above the national minimum wage.”   According to the collective agreement signed with the Ceylon Workers’ Federation, which represents the Planters’ Union, plantation workers can be paid a daily wage of Rs. 750, including a fixed price allowance of Rs. 50, which is in addition to the basic salary of Rs. 700, attendance incentive allowance, and production incentive allowance.   The Employees’ Federation of Ceylon (EFC) has stated that the daily salary can be increased up to Rs. 920, excluding contributions to the Employees Provident and Employees' Trust Fund with the allowances of the price share supplement.   But the plantation unions have objected, emphasising that the need is for a daily wage increase of Rs. 1,000, which was a term that was proposed to Parliament during the 2021 Budget in November 2020.   Over Rs. 6,000 increase in earnings  Meanwhile, in the proposed wage increment structure presented to the Minister of Labour last week, the RPCs stated that they would offer a substantial increase of Rs. 6,250 to the plantation workers’ monthly earnings, with the daily wage going up to Rs. 1,105, which will comprise the basic wage of Rs. 700, Employees Provident Fund/Employees Trust Fund (EPF/ETF) of Rs. 105, attendance incentive of Rs. 150, and productivity incentive of Rs. 150.   “The Ministry has agreed to the terms that were proposed by us; now the trade unions need to be told about this. The existing wage structure agreement will come to an end on 28 January; therefore, we are looking at drafting the present wage model that we proposed from that day onwards,” Planters Association of Ceylon Chairman Bathiya Bulumulla told The Sunday Morning.   While the trade unions had presented several other requests to the association, Bulumulla noted that given the current situation and the economic condition, the RPCs have offered the maximum possible increment to the workers this year. In terms of policy and ordinance amendments, those decisions will be the sole responsibility of the Ministry of Labour, and the Department of Labour and the Wages Board, as trade unions had also requested a fixed pay rather than daily wages for the estate sector.  Two-year timeline of daily wage issue  January 2019 – The Ceylon Workers’ Congress (CWC), Lanka Jathika Estate Workers’ Union (LJEWU), and Joint Plantation Trade Union Centre (JPTUC), along with representatives of the RPCs, representatives of the Ceylon Employers’ Federation, and other stakeholders, sign the Collective Agreement in the presence of former Prime Minister Ranil Wickremesinghe.  Trade unions that demanded a Rs. 1,000 basic daily wage lowered their demand to accept the offer by RPCs to increase the basic wage to Rs. 700 – an increase of Rs. 75 from the earlier offer of Rs. 625 made by the plantation companies – along with an increment of Rs. 20 from the then Rs. 30 in Price Share Supplement (PSS), bringing the total daily wage to Rs. 750.  The Collective Agreement also saw a hike in the payment of additional output by Rs. 15 per kg. The Rs. 140 incentive allowance that was earlier a part of the Collective Agreement was removed.  February 2019 – Former Plantation Industries Minister Navin Dissanayake announces that the Government had decided to add Rs. 50 to the wage given by plantation companies. Funds were to be allocated through the 2019 Budget.  January 2020 – President Gotabaya Rajapaksa announces the increment of the daily wage of plantation workers to Rs. 1,000, with the decision supposed to come into effect from 1 March 2020. At the time, under the Collective Bargaining Agreement (CBA) between Regional Plantation Companies (RPCs) and trade unions, workers received a daily wage of Rs. 730, comprising a basic wage of Rs. 500, a price share supplement of Rs. 30, an attendance allowance of Rs. 60, and a productivity incentive of Rs. 140.  February 2020 – Prime Minister Mahinda Rajapaksa assures that arrangements are currently being made to pay the proposed daily wage of Rs. 1,000 to estate sector employees. According to the Prime Minister, the plantation companies agreed with the Government’s decision in principle, and arrangements were supposedly made to increase the daily wage of estate sector employees to Rs. 1,000 from 1 March 2020.   July 2020 – The Government and private sector look at introducing an outgrower model with proper rules and regulations that would benefit the workers as well as the companies.  Minister of Plantation Industries and Export Agriculture Dr. Ramesh Pathirana however stated: “Workers can follow the outgrower model if they wish to, but I accept that there may be some shortcomings such as the lack of (Employees’ Provident Fund/Employees’ Trust Fund (EPF/ETF) benefits. But the proposals transitioning to this model will ensure such benefits are awarded.”   December 2020 – Discussions continue between RPCs and TUs on wage increment terms.  January 2021 – RPCs propose productivity-based pay model to Ministry of Labour; await TUs’ agreement to terms.  


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