Serious issues about validity of agreement

Plantation Workers' Wage Collective Agreement 2007

By Jaya Peri Sundaram – Lawyer and former Senior Vice President of the CWC

The recently concluded "Plantation Workers' 'Wage Collective Agreement" between three plantation workers' Trade Unions (CWC, LJEWU, JPTUC) and the Employers' Federation of Ceylon covering plantation workers employed in the estates of 21 Plantation Companies came in the wake of President Mahinda Rajapaksa's pledge that they will be given an increase of Rs.30 in the daily basic wage plus a minimum monthly income of Rs.5000.

This article attempts to analyse the Collective Agreement in the context of its content, scope, anti applicability in law and whether the core issues namely the increase in the daily wage and Rs.5000 monthly income have in fact been given effect to and recognition in law by this agreement. If not then will this agreement have to be ditched and replaced by a new one that will incorporate and ensure that the above promises of President Rajapaksa are fulfilled and more importantly implemented in consonance with the laws of the country and not in breach of same.

Paragraph 2 of page 1 of the agreement states that consequent to the discussions held under the aegis of the President the parties mutually agreed to "amend the remuneration package applicable to the employees..". The amendment was to be effected to the earlier Col1ective Agreement No.37 dated 19.12.2006.

Quite apart from the legal aspect whether the Industrial Disputes Act permits the amendment of an existing Collective Agreement one should ascertain whether the so called amendment has achieved the desired objective of guaranteeing a minimum wage of Rs.5000 per month to the plantation workers.

Wide publicity was given to the fact that the President had implemented his pledge to the plantation workers that they too like other industrial workers will be guaranteed a minimum monthly wage of Rs.5000. All other workers are entitled to a minimum wage of Rs.5000 through the Wages Boards effective May 1, 2007. In addition they are also entitled to Rs.1000 per month effective August 1, 2005 under the Budgetary Relief Allowance Act No. 36 of 2005. Hence all workers covered by Wages Boards are now guaranteed a minimum wage of Rs.6000 per month effective May 1, 2007.

How does this compare with the remuneration package given to the plantation workers effective November 1, 2007? Are they even entitled to the minimum monthly wage of Rs.5000 quite apart from the Budgetary Relief Allowance of Rs. l 000 to which they are not legally entitled in view of Section 3 (4) of the B.R.A. Act which excludes workers covered by a Col1ective Agreement?

The rationale of excluding workers covered by Collective Agreements from the application of wage increases effected by statute was based on the principle that workers covered by such agreements are entitled to a Cost Of Living Allowance under these agreements - and hence their salary/wage structure contains an in-built mechanism to look after any increases in the COL. But in the case of plantation workers the COL Allowance component in the wage structure was abolished several years ago. Hence there is clearly discrimination in the case of the plantation workers covered by the above agreement because this does not contain an in-built mechanism to cushion the impact of any increases in the COL.

Consequently the plantation worker is in a disadvantaged position under the Collective Agreement 2007 for the reason that (a) he is not guaranteed a minimum monthly wage of Rs.5000 and (b) he is not entitled to the Budgetary Relief Allowance of Rs. l 000 per month for the reason that he is allegedly covered by a Collective Agreement which unfortunately does not contain any provision for the payment of a COL Allowance.

Let us now consider the various aspects of this agreement. As noted earlier para 2 of page 1 states that the present agreement amends the remuneration package applicable to the employees under the earlier Collective Agreement No.37 of 2006. However, later clause 2 of page 2 goes on to state that "the provisions of this Agreement shall supersede and replace the provisions of the Plantation Workers Wage Collective Agreement No.37 of 2006." Has this agreement sought to both amend and replace the earlier Collective Agreement No. 37 of 2006?

The Industrial Disputes Act contains no specific legal provision for the amendment of a subsisting Collective Agreement. Nor can one amend a document which is replaced. According to the later clause 2 of page 2 the earlier agreement of 2006 is non existent. If that be the case, how could one amend an agreement which is no longer in existence? Confusion becomes worse confounded when one considers clause 5 of this agreement which states as follows "This Agreement is entered into in accordance with Clause 6 of the Collective Agreement between the parties entered into on 24th July 2003" (CA No.13 of 2003)." How can the parties sign a Collective Agreement today under the ID Act in terms of an earlier Collective Agreement which is no more in force and signed four years ago? The apparent conflict between clauses 2 and 5 of this agreement adds to this confusion.

Yet again there is no evidence so far that this agreement has been extended under Section 10 (2) of the Industrial Disputes Act. Before the Minister extends the agreement he is obliged to call for objections in the newspapers in three languages and in the Government Gazette. This has not happened and it is only an agreement that has been published in the Gazette that could be extended under Section 10 (2) to make it legally binding. Hence this would not apply to workers employed in estates which are not members of the Employers' Federation thus resulting in employers of non-EFC member estates being under no obligation to adhere to the present Collective Agreement remuneration package.

There is also an issue that is relevant in deciding whether the earlier Collective Agreement No. 37 of 2006 is still in force. It is common knowledge that the unions that were a party to this agreement repudiated it. If that be the case the agreement stands terminated. In these circumstances Collective Agreement No.37 of 2006 is no longer valid. Then how can the parties to such an agreement amend or modify it as stated in the present Collective Agreement?

Yet another 'aspect that needs to be highlighted is that in terms of Section 6 of the Estate Labour Indian Ordinance which is still in force the employers of all resident workers of Indian origin are obliged to offer six days work or in the alternative six days wages. Hence these plantation workers will be entitled to the Daily Attendance Incentive in respect of six days in the week. This is another cardinal aspect that has to be kept in mind. Thus any limitation imposed by employers in curtailing the number of days work as per, the present agreement will be in conflict with the above statutory provision. Here too the present Collective Agreement will lose its validity.

To summarise the above position the Plantation Workers Wage Collective Agreement 2007 is open to challenge.

Will the plantation worker once again be left high and dry and be back to square one? Because of these shortcomings will even the Rs. 5000 minimum guaranteed wage promised by the President not be forthcoming, especially in view of the fact that the plantation industry is subject to vagaries of weather and more importantly at the mercy of the estate employers who have now been given the license as per the present Collective Agreement to act in breach of the Estate Labour Indian Ordinance?

For the reasons set out above the present Collective Agreement will not achieve the desired objective of guaranteeing a minimum monthly wage of Rs.5000 as pledged by the President.

There appears to be no other option but for the parties to the present Collective Agreement to renegotiate a fresh Collective Agreement in consonance with the existing laws of the country, if it is to be a valid collective agreement and that the plantation worker is guaranteed a monthly wage of Rs.6000 like all other workers covered by Wages Boards.