Plantation workers greatly welcomed the Rs 1,000 wage increase announced by President Gotabaya Rajapaksa in his Thai Pongal Day message.The increase means that Rs 250 would be added to the current daily wage of Rs 750 (basic plus Rs 50 Price Share Supplement).
The Regional Plantation Companies (RPCs) did not welcome the message in the same manner and 19 RPCs are up in arms inquiring as to how on earth this could be implemented when they quote the tea production is in shambles and running at a massive loss. According to a seniormost RPC official, if they have to pay Rs 1,000, the annual loss would hit Rs 6 billion.
The RPCs will announce their decision soon and are still holding discussions on the sudden announcement by the President. They think that the Government is thinking 'out of the box' and if the Government bears the burden of paying Rs 1000, it's well and good, provided that the RPCs are not weighed down with it.
Early 2019 plantation workers protest
2019 saw one of the biggest protests held by plantation workers where thousands of plantation workers held strikes and protests in opposition to a sell-out wage deal signed by the trade unions and the plantation companies, with the backing of the former government.The RPCs said the demand was unreasonable and that 35 per cent of RPC tea was unsold.
During the presidential election campaign held in late 2019, the incumbent President then a candidate said he has a people-centred economic plan, that tea estate labour should be viewed in a humanistic way and a mechanism for a better wage structure should be implemented.
A seniormost RPC official wanted to know what sort of a mechanism that would be unless it comes under the collective agreement that was signed two years. The Collective Agreement between the RPC and the Trade Unions is where the salary is decided upon. There is one more year for the Collective Agreement to expire and for its renewal.
RPC mismanage estates
True enough the tea industry is suffering from many maladies however there are many who claim that the RPCs have mismanaged and badly maintained the estates.
In 2017 there were 707 tea factories in operation, however, a year later 62 factories out of 707 were shut down, keeping only 645 in operation.
For the last three years tea production levels have been nearly static and well below the record crop of 338 million achieved in 2014.
This downward trend has been contributed to industrial malpractice and indiscipline amongst most stakeholders including certain factory owners said former Sri Lanka Factory Owner's Association president Harith Ranasinghe when he left office last year.
Vice President of Ceylon Worker's Congress (CWC) Kanapathy Kanagarjah said the Rs 1,000 per day wage announcement made the plantation workers smile. "The good news was the talk of the town and we appreciate the move.
No President of Sri Lanka, political parties or Cabinet Ministers took a decision but all the time played with the trade unions and the RPCs making people continuously suffer."
He added that come what may the Rs 250 will be added to their daily wage from 1 March 2020, and they can only appreciate this kind gesture by the President.
Mechanism outlined by Government
According to him, there is a mechanism that was outlined by the government. It was not given blindly.
He pointed out that the RPC will give a tax reduction which means the income will increase.
The fund from the Tea Board for tea production will be distributed to the RPC is what has been suggested.
He said that during the last governments tenure this was followed for two months where the Tea Board funded the RPC and there is no reason why it cannot be carried out now.
Suggestions have also been made to provide subsidies for tea fertiliser etc. Currently 50% of the tea land on each estate is not utilised and has turned 'forest land'. This is another reason why the tea industry is failing. High production is the way out to boost the tea industry.
On the number of workers, he added that there are 250,000 to 300,000 plantation workers currently working for the tea industry but there is an even bigger number of some 1 million workers who are employed as 'cash pluckers' which means hired on daily and paid for the number of kilograms of tea they pluck. He said these one million workers should be absorbed too to the mainstream tea industry.
One of the many underhand methods utilised by the tea companies is to offer early retirement to workers and later recruit them instead as cash pluckers so that they don't have to pay their ETF and EPF.
There are many other tricks played on the plantation workers and all these deceitful methods should stop, action should be taken to motivate the worker to increase production.
A long-term plan after offering the Rs 1,000 should be drafted soon and discussions are going on as to how it can be justified along with the continuation of payments of other incentives like the cost of living allowance and other benefits that a plantation worker must have.
"These proposed regulations are already with the CWC and in time to come we will work on these as we consider the plantation industry is the backbone of the government." The CWC has a sound vote base and have three MPs; they also have the strength to continue to work with the Government to achieve targets.
UNF MP M. Thilakarajah welcomed the Rs 1,000 wage increase and inquired under what scheme this was to be granted, how it would be added to the Collective Agreement and whether this was under the minimum wage or not.
If the government is giving an additional Rs 1,000 and RPCs cannot take a collective decision on this matter, then the government should take over all the RPCs. What is required is the mechanism of how this Rs 1,000 would be paid.
Minister Mahindananda Aluthgamage said the Government will fund the Tea Board but the Tea Board says they have not been informed of such an arrangement.
MP Thilakarajah opines that the Rs 1,000 is a gross salary and that is not the minimum wage.
But he recalls that in 2019 the RPCs agreed for Rs 950 plus Rs 50 but it was not implemented. The basic Rs 500 was increased to Rs 700 he added.
Tax reduction and subsidies to RPCs
A.S. Nallusamy, a social worker and trade unionist from Lindulla Estate, noted that the government has given tax reduction and subsidies to the RPCs for fertilisers, hence these benefits should be shared with the plantation workers.
The workers have asked to abolish the Collective Agreement system that deals with their wages. The trade unions and the RPCs are drafting the salaries for the plantation workers is the known truth.
If you go by the Cost of Living Index, each plantation worker should receive around Rs 1,200 and before the Collective Agreement came into practice in 1992 (when the Tea industry was privatised) the wage was drafted based on the COL Index that came under the Wages Board Ordinance. When the cost of living was high, people were paid accordingly.
Today coconut, rice, sugar and all basic commodities' prices have increased and if they were under the Wage Board Ordinance their salaries would be better placed.
Earlier there was a supplementary income where each worker owned a cow and they sold milk, today there is hardly any side business for the workers and they solely depend on their salaries from the tea industry.
"Now the ball is in the CWC's court, and they have to implement the wage hike as per the announcement, and once that is sorted out it will be good for the tea industry."
SL world's third-largest producer of tea in 1995
Earlier the Government showed a high importance to the tea industry because the economy of the country depended on tea as much as on rubber and apparels.
Sri Lanka was the world's third-largest producer of tea and the industry is one of the country's main sources of foreign exchange and a significant source of income for labourers, with tea accounting for 15% of the GDP, generating roughly $700 million annually.
In 1995, Sri Lanka was the world's leading exporter of tea, (rather than producer) with 23% of the total world export, but it has since been surpassed by Kenya. The Tea industry is also highly politicised and it has been never been free.
There are other human rights issues also related to the workers in the plantation sector.
There are many still living in 100 years or more old-line rooms. Some of the estates do not have a school and educating their children is one of the toughest tasks for them.
The way forward is to uplift their lives and that is also possible with a proper wage and other benefits.
The tea sector employs directly or indirectly over 1.3 million people, If they are recognised and their grievances addressed surely the tea industry will regain its lustre.