Estates to cough out Rs.4 bln more to pay workers
View(s):By Sunimalee Dias
The new collective agreement reached between Regional Plantation Companies (RPCs) and estate unions would result in an additional cost of Rs.4 billion to the owners. The new pact envisages raising the current wage of Rs. 620 to Rs. 730 effective October 15 for both tea and rubber. However with statutory dues it goes up to Rs. 805 against Rs. 687.50 earlier. The additional cost for the RPCs as a result of the wage hike would be about Rs.4 billion, Planters Association Immediate Past Chairman and Managing Director of Hayleys Plantations Roshan Rajadurai told the Business Times on Thursday. It is learnt that the plantation companies were compelled to agree with the trade unions on the new rate despite previous assertions that they would want to change the structure on the estates by moving to a new proposed out-grower model.
Earlier the government ‘push’ to RPCs to obtain a loan to pay the workers’ wages by a further Rs.100 per day for two months led to the companies being compelled to finalise a deal with the trade unions. However, the RPCs have been able to convince the government authorities and the trade unions to include a clause in the new collective agreement that would ensure the next round of discussions in 2018 would involve the establishment of the proposed out-grower model. Another clause entered in the agreement is that the companies would agree to ensure cleanliness of the work environment thereby increasing work for the male workers, some who have been plucking tea leaves instead of their normal routine manual work. RPCs maintain that it was not possible to include the limited supply of labour on the estates for maintenance work since the revenue is generated only through the sale of black teas as a result of which all workers were involved in plucking.
Though prices of tea leaf at the Colombo auctions had improved it was found that this was mainly due to the reduced supply of tea. Crop yield has come down by about 30 per cent compared to last year, Mr. Rajadurai said. Meanwhile during the 10 days of strike action by the estate workers the companies were unable to supply tea to the world market and this type of constant disruption has irked the RPCs. “Workers are the lifeblood of the industry and the future of this industry is in their hands and if they are not willing to be productive it will continue to go down,” Mr. Rajadurai explained adding that in some rubber plantations where work was halted workers would not be paid upto 15 days of salary. Planters Association Chairman Sunil Poholiyadde said in a statement soon after the signing of the agreement that the fact that
“we were finally able to secure a wage formula that is linked to productivity is ultimately an extremely important step, one that will help to transition our industry towards a revenue sharing model which the RPC’s firmly maintain is the only viable method of returning the sector towards a more sustainable trajectory”. The current collective agreement will be applicable for two years after which the unions have agreed to undertake to support the improvement of productivity of the industry and at estate level by moving to a productivity linked wage regime based on revenue share/ out-grower model through the next agreement, the agreement stated. As a result of this the trade unions and the RPCs would commence discussions in this regard from next month. The last agreement was entered into in 2013. The lease agreement of the RPCs would complete 25 years next year and there are another 30 years to go. Companies feel that short term leases were not favourable and the government is currently studying the increase in the term of the lease agreement.