Amidst the ongoing tussle between the Government and plantation companies regarding increasing estate sector wages, the situation of the workers themselves remains unresolved. 

After gazetting a 70% hike in the daily wage of plantation workers to Rs. 1,700, the Government has said that the privatised plantations would be taken back by the State if a wage hike order was not carried out. 

According to the gazette notice, plantation workers will have to be paid Rs. 1,350 a day, with a daily special allowance of Rs. 350 and an over-kilogramme rate of Rs. 80 a day.

“The new minimum wage is based on Fairtrade International’s recommendations for a living wage for estate workers in Sri Lanka. Achieving this has been an uphill battle which faced stiff resistance from Regional Plantation Companies (RPCs) and I expect further objections from them,” Estate Infrastructure Development Minister Jeevan Thondaman said on X at the time. 

He has also revealed that an expert panel was reviewing lease agreements with the RPCs in order to take action if necessary. 

However, the Planters’ Association of Ceylon (PA) has issued strong objections to what it terms as the “Government’s arbitrary, reckless, unilateral decision to drastically hike minimum wages for tea and rubber sector workers by an unprecedented 70%”.

PA Spokesperson Dr. Roshan Rajadurai told The Sunday Morning: “We made our stand clear at the press conference and we are now awaiting its outcome. This is not affordable; we are selling a low priority commodity called tea. What we earn from that is what we can distribute as wages.”

The association stated: “This current effort to force such a clearly unsustainable mandatory minimum wage on tea and rubber smallholders and the RPCs is impossible for the industry to absorb, even with radical cuts to basic operational necessities. The continuity of the entire plantation sector is now at risk, and most critically the livelihoods of the very workers and communities who are connected to the industry across Sri Lanka.” 

Need to improve productivity 

Meanwhile, Colombo Tea Traders’ Association (CTTA) Chairman Sanjay Herath said that while the wage increase could be considered reasonable, there was a pressing need to improve the productivity of the plantations. 

“The problem is that the plantation sector labour force used to be 450,000; now it has whittled down to 100,000. There is no labour in the plantations; there is a labour shortage. The plantation companies have to have a dialogue with all these unions to work out a model on how to get ends to meet,” he said.

Explaining the compensation model for tea pluckers, he noted that the norm in Sri Lanka was for pluckers to harvest 18 kilos, which was low when compared to other countries such as India and Kenya, where it was the norm to harvest 35 kilos and 45 kilos, respectively. 

Stressing that this number needed to be increased to at least 25-30 kilos, he also noted that the over-kilogramme rate which used to be Rs. 40 had been increased to Rs. 80, which was an incentive, since workers were being compensated the harder and more efficiently they worked. 

Accordingly, he noted that plantation companies had to hold discussions with the unions and reach a compromise. “At the end of the day, everybody is in business to make money, but not at the sacrifice of these poor people. The companies are unable to do any work without these workers and there is a labour shortage, so they need to get the best out of them.” 

Addressing the gazette, Herath said: “It is a take it or leave it situation. If any management company finds it difficult to pay, they’ll have to say they are unable to meet these wages and that they wish to exit. The Government will then give them to other people who can manage.”

Impact on tea

The PA has claimed that the Government’s decision will increase operational costs, rendering Sri Lanka’s tea and rubber industries uncompetitive in the global market. 

Given this context, Herath noted: “The reason tea prices are so high today is because of demand and supply – supply is low and there is more demand, so prices are fairly buoyant and high. 

“Comparing Ceylon Tea prices against any other origin, our tea costs almost $ 1.5-2 more, which means we are losing out on our competitive edge. As exporters, we have been telling the producers and the Tea Board, etc. that we need to increase the production of Ceylon Tea.”

Accordingly, since 70% of the cost of production comprises wages, he noted that an increase in wages would affect profitability, but added that if the companies managed to get the optimum productivity out of the available labour, they would be able to make ends meet. 

However, he pointed out that some plantations were running at a loss at present, especially the high-grown plantations. 

He opined that the solution to the labour shortage was specialisation, in that there would be specialised groups of pluckers, pruners, etc. “If you get the best out of these people and have specialisation, you can ensure efficiency, which will help to overcome the wage hike.”

Estate worker woes

In this backdrop, estate workers continue to express their dissatisfaction with the new measures as well as their current situation. 

Speaking to The Sunday Morning, All-Ceylon Estate Workers’ Union President Kithnan Selvaraj claimed that neither the gazette nor the promise that those in State plantations would receive increased wages was valid, stating that this was not a sufficient amount for estate workers to live on and describing the measure as mere Government trickery. 

“The amount proposed by the Government is completely unjust. The gazette is simply a recommendation. If we were to increase wages according to the living conditions at present, it should be at least Rs. 2,000,” he said, going on to address the futility of the move. 

“The Minister says that the State plantations will provide Rs. 1,700 from 1 June. However, we know that 90% of Janatha Estates Development Board (JEDB) plantations are idle. Moreover, since 1992, 80% of workers have left the industry. The remaining 10% of workers are to be given Rs. 1,700. The Minister has made this statement with no analysis. This is politically motivated in relation to the Presidential Election.”

He noted that the plantation companies’ claim of a wage hike impacting profitability was a common refrain whenever they had to agree to increase wages, saying: “Neither the Government nor the companies are intervening to develop the tea industry or use its output to develop the country. This is just what they always say.”

According to him, the situation in the plantations is worsening and no Government intervention can be seen to uplift their conditions, with many workers having withdrawn from the industry, in addition to the collapse of welfare and clean drinking water systems, among others. 

Need for job security, better living conditions

Elaborating on the conflict between plantation companies and workers, Ceylon Workers’ Congress (CWC) Vice President Bharat Arulsamy said that estate workers deserved a liveable wage. 

“Traditionally, since 1992 until now, every two years, there has been a wage hike. Up until 2021, we have requested that through the collective agreement. After the collective agreement, we now request through the Wages Board. We do understand they have a problem, but when you consider the larger public interest, plantation sector workers deserve more attention and salaries because their living conditions are poor. We are not not asking for an unachievable figure; we have made this requirement based on various reports and studies.”

He further shared that the RPCs had been reluctant to come to the table with the workers, adding: “We have also not taken an ex parte or arbitrary decision; this was arrived at after numerous discussions with the Plantation Ministry and Labour Commissioner, as well as a subcommittee appointed by the Labour Ministry. 

“However, during the discussions, the RPCs never came forward to increase the basic wage. Instead, they only proposed an incentive increment. That is not the purpose of this wage demand. When there is a wage requirement, the basic wage should increase.”

Speaking further, Arulsamy said: “Wages and the welfare of the workers cannot be coupled; those are two different things,” adding that greater worker participation required more attractive packages and a decent working environment. “This is why we are urging the Labour Ministry to have a proper legal framework for this and come up with a proposed employment act soon, incorporating many things as a law.”

Moreover, he noted that the sustainability of the industry depended on these workers, which therefore required that they received equitable treatment. “What we want for our workers is a living wage. Like RPCs, we are also concerned about the sustainability of the industry. If all the workers in this industry migrate or leave this job, there will be no workers at all in the industry to work. More than the RPCs, we are concerned about the industry because we made this industry thrive.”

“This is the only industry where you have jobs the moment you open the door. Despite that, people are migrating to other districts or other countries seeking employment, since there is no  dignity in this job,” he said, stressing that the CWC too wished for a productivity-based methodology for the industry which was uniform, in order to ensure that no employer could exploit the workers.

“The wage should have increased in 2023, but we didn’t create any trouble owing to the pandemic year and the subsequent financial constraints. However, since everything is returning to normal, workers’ concerns need to be addressed,” he said, adding that the wage should be over Rs. 2,000 by rights. 

“Considering the sustainability of the industry, we have asked for a decent wage increment. I hope the plantation companies will develop their business models and stick to the gazette notification,” he said.