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Plantation firms warn tea industry may collapse, but Govt. insists on wage hike
View(s):Amid dire warnings by plantation companies that the proposed Rs. 1000 wage hike for estate workers would see the “collapse” of the tea industry, the Government insists that the hike must be given as decided.
Industry sources told the Sunday Times that the proposed hike would send wage bills skyrocketing to Rs. 6 billion, excluding incentives such as EPF, ETF and
gratuity.
Employers made their views on the matter known at a meeting of the National Labour Advisory Council (NLAC) on Friday.
It was the first meeting of the NLAC attended by Labour Relations Minister Dinesh Gunawardena.
According to veteran trade union leader Palitha Athukorala, Employers Federation of Ceylon (EFC) Director General /CEO Kanishka Weerasinghe criticised the recent cabinet decision at the meeting saying plantation companies were unable to pay this amount.
“He (Mr. Weerasinghe) expressed the view that already there is a collective agreement on wages between plantation unions and plantation companies and the new decision would affect this agreement,” the union leader said, adding that unions represented on the NLAC were, however, supportive of the wage increase.
The EFC, which represents the 22 Regional Plantation Companies (RPCs), also issued a short but strongly worded statement on Friday pointing out that, at present, the RPCs and two signatory unions – the Ceylon Workers’ Congress (CWC) and the Lanka Jathika Estate Workers’ Union (LJEWU)– were bound by a collective agreement that decided on current wages. It noted that this agreement would be effective at least till January 2021.
“As such, if the proposed increase were to be mandated on the RPCs, it will not only be inconsistent with the legal provisions as well as the values of ‘core’ ILO Convention 98 on collective bargaining,” the statement pointed out.
It claimed that financially, the move would have a disastrous impact not only on the RPCs but also on the smallholders and eventually lead to the collapse of the industry.
Tea Industry Development State Minister Kanchana Wijesekera, however, claimed the Government had taken the initiative to increase wages of estate workers to facilitate the development of the tea sector.
He noted that the plight of estate workers, who drew a meagre daily wage, was a pressing issue and this was why President Gotabaya Rajapaksa had stepped in to increase their wages.
Mr Wijesekera pointed out that the Government had granted a large number of tax concessions to companies such reducing the Value Added Tax (VAT) rate to 8% from 15% and abolishing the Nation Building Tax (NBT).
He said subsidised fertiliser would be provided to small and medium enterprises engaged in export crop production.
“We will also ask the Tea Board to intervene to give relief to smallholders,” he said.
Given the concessions granted to estate companies, there was no reason why the benefits should not be transferred to the workers, he insisted.