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Planters’ Association of Ceylon Spokesperson, Roshan Rajadurei said that, even under pressure, RPCs will not agree to a minimum wage hike to Rs 1,000, further adding that the industry was unable to afford the existing offer it had already made.
He said the industry would collapse if RPCs were forced to honour the wage hike. Minister of Hill Country New Villages, Infrastructure and Community Development, Arumugam Thondaman, at a recent roundtable discussion with industry stakeholders, said that if RPC’s were facing losses, it was due to their own mismanagement.
“Our workers have nothing to do with this. If RPCs are making losses, they must hand it over to the Government. RPC CEOs are paid Rs 2-3 million; managers are paid up to Rs 200,000-300,000, while our workers are paid so little,” the Minister pointed out.
Thondaman also claimed that several acres of estate land had been given out on the ‘out-grower system’ without any negotiation with the relevant parties, which he claimed to be a clear violation of the Collective Agreement. “I will go to the President and Prime Minister and tell them to take over.”
“Diwali advances have only been paid by some RPCs. We don’t want an interim allowance; we want the salary increment and arrears for the past couple of days we have wasted discussing the wage increment,” he pointed out.
Meanwhile, Thondaman also claimed that newly-appointed Prime Minister Mahinda Rajapaksa had instructed him to hold discussions with the Finance Ministry to accommodate the Rs 1,000 basic wage request by the workers.
Sri Lanka Tea Board Chairman, Lucille Wijewardena, speaking to Ceylon FT, said that it was nonsensical to assume the Government would think of taking over RPC estates, adding that the rest of the industry is run by tea smallholders.
Speaking of the wage agreement, he said it was paramount that both parties sat together to agree on a living wage that was advantageous for both sides.
Rajadurai, speaking to Ceylon FT, said there was no violation of the Agreement as claimed by the Minister.
“There is a severe reduction of workers in the estates. Workers have reduced by 50%. Hence, there is land which cannot be abandoned. We don’t have the required labour to work in these lands. Hence, most of the current workers work on these blocks and earn more than Rs 50,000 in total, along with their daily wage,” he stated.
“These workers have spoken to the managers and have started plucking. We are giving a different rate on these blocks, though. Why is the union objecting when workers are earning extra cash from these blocks?” he questioned.
He said the Government was most welcome to take over the lands, but noted that this would be no easy task. “They have to reimburse investments to the companies; and there are many other expenses attached to estates,” he said.
Highlighting that close to 400 estates came under the purview of 20 RPCs, he commented that all of these companies were making losses, as the world market price for tea was Rs 575 per kilo - which is below the current production cost of Rs 630 per kilo.
“There is no mismanagement in the RPCs. If we are facing losses, it is because the world prices are going down,” Rajadurei said.
However, Wijewardena said world prices for Sri Lankan tea will increase due to the huge demand it garnered. He said that currently, the price of tea was approximately Rs 600 per kilo.
“RPCs contribute only 25% to the total tea production in Sri Lanka. The remaining 75% of production is done by the tea smallholders. They are being paid Rs 25 for every kilo they pluck, under the productivity-based wage model.”
According to Rajadurei, the Collective Agreement is still in force, at least until new terms have been agreed upon.
He confirmed that Diwali advances of Rs 10,000 were given by all the RPCs.
Rajadurei said the only way a wage of over Rs 1,000 could be given was if the industry shifted entirely towards a productivity-based wage model, which trade unions have vehemently opposed. In this model, Rs 46 would be paid for every kilo of tea harvested, meaning workers would be able to earn more than Rs 1,000 for 22 kilos plucked.
The PA said under the previous Collective Agreement, workers were provided a basic salary of Rs 500 in addition to an Attendance Incentive (AI) of Rs 60, a Productivity Incentive (PI) of Rs 140, a Price Share Supplement (PSS) of Rs 30, and EPF/ETF of Rs 75, amounting to a total daily wage of Rs 805.
As of their last and final offer, RPCs have proposed a 20% increase in the basic wage up to Rs 600, a 33% increase in the AI up to Rs 80, and a 20% increase in ETF/EPF up to Rs 90 in addition to the PI and PSS, leading to a maximum total daily wage of Rs 940, which is an average increase of Rs 3,375 per month per worker.
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