RPCs and unions reach settlement; estate workers to receive 40% wage increase

Plantations Industries Minister  Navin Dissanayake shakes hands with CWC Leader Arumugam Thondaman as Minister of Labour and Trade Union Relations Ravindra Samaraweera looks on

• Daily Basic wage increases to Rs. 700 from 500
• Trade unions abandon demand for Rs. 1000, while RPCs increase from Rs. 625 
• New wage formula sans incentives for attendance and productivity 
• PSS increases from Rs. 30 to Rs. 50, over kilo payment increases to Rs. 40
• Three months’ wage arrears to be paid, with Tea Board contributing Rs. 100 million

By Chathuri Dissanayake 

Closing months of negotiation between plantation worker trade unions and Regional Plantation Companies (RPCs), the two parties reached a settlement yesterday to increase the basic daily wage to Rs. 700, with a Rs. 100 million pledge by the Government to help companies pay three months’ wage arrears. 

The trade unions, which earlier called for a Rs. 1000 basic wage, brought down their demand to accept the offer by RPCs to increase the basic wage to Rs. 700, up Rs. 75 from their earlier offer of Rs. 625. The Collective Agreement on the wage negotiations is to be signed next week, while discussions on the General Agreement, dealing with other aspects of plantation employees’ welfare, will also commence in the coming weeks. 

The representatives from Ceylon Workers Congress (CWC), LJEWU and Joint Plantation Trade Union Centre (JPTUC) present at the meeting agreed to the Rs. 700 basic wage offered, with a Rs. 20 increase from the current Rs. 30 in Price Share Supplement (PSS), totalling a total daily wage of Rs. 750. The negotiations also saw an increase in payment for additional output by Rs. 15 per kilo.  “The basic wage has increased by 40% from the current basic wage of Rs. 500, this is the largest percentage increase I have seen in a period of close to 20 years,” Joint Plantation Trade Union Centre (JPTUC) General Secretary S. Ramanathan told Daily FT. “Although we are not fully satisfied, this is the best offer and we have settled for it.”

With the new agreement reached, the wage formula used to date, which included incentives for the workers, has also changed.

The new wage formula will only include the daily basic wage, PSS and over kilo rate, while both attendance incentive and productivity incentive have been removed. Further, the plucking norm is to be set at estate or regional level.“The workers did not want these incentive-based payments, even though the plantation companies offered it. So we have taken it off the formula,” CWC General Secretary Muttu Sivalingam told Daily FT. 

The RPCs have also agreed to pay the arrears in wage payments from October, when the Collective Agreement signed in 2016 lapsed. In a bid to ease the financial burden on the companies, Minister Navin Dissanayake has agreed to allocate Rs. 150 million from Tea Board funds to finance the payments. 

“As a goodwill gesture, we have agreed to pay the arrears, although technically there is no such thing as the agreement is to be signed next week. We also cannot calculate arrears as the wage formula is completely different as well,” Planters’ Association General Secretary Lalith Obeysekere told Daily FT. 

Obeysekere said that the arrears payments are likely to cost over Rs. 200 million. However, a proper calculation is yet to be done, he said. 

In early January, Minister Navin Dissanayake intervened in the wage negotiations, which have dragged on since mid-last year, following requests by the trade unions. However, Dissanayake was not immediately able to reach a settlement, with discussions ending in a stalemate for three weeks. Following the final meeting with all stakeholders, the Minister said that the increase of Rs. 200 can be considered a victory for the workers. 

“The estate workers contribute a lot to the economy, and it is a victory to have received an increase of Rs. 200, which is equivalent to a 40% increase in the basic wage,” he said.