Cabinet approves Treasury to settle State-run plantation firms statutory allowances

Cabinet Co-Spokesman and Minister Bandula Gunawardena 

• Instructs Commissioner General of Labour to reduce maximum amount deductible from surcharges payable by SLSPC, JEDB, Elkaduwa Plantation Ltd.
• Move contrasts Govt.’s assertion of taking over RPCs if they fail to comply with 70% wage hike
• Cabinet Co-Spokesman and Minister Bandula Gunawardena reveals over 2,000 legal cases being heard regarding non-payment of statutory allowances by State-run estates
• Says income of these institutions are insufficient to cover accrued arrears of statutory allowances — EPF, ETF, gratuity
• Asserts Govt. will provide funds as a loan from Treasury, to be repaid in instalments from earnings of three estates
• Plantation industry warns that forceful implementation of a minimum wage hike could lead private RPCs to similar financial struggles

By Charumini de Silva

The Cabinet of Ministers, at its meeting on Monday, approved the allocation of necessary funds from the Treasury to pay the arrears of statutory allowances owed by the Sri Lanka State Plantation Corporation (SLSPC), Janatha Estate Development Board (JEDB), and Elkaduwa Plantation Ltd. 

The decision also includes instructing the Commissioner General of Labour to reduce the maximum amount deductible from the surcharges payable by these institutions, as per the Employees Provident Fund Act No. 15 of 1958, following the payment of the arrears.

The move comes hot on the heels of the Government’s declaration that it will reclaim Regional Plantation Companies (RPCs) from the private sector if they do not implement the mandated minimum wage increase of Rs. 1,700 from next month.

Speaking at the weekly post-Cabinet meeting media briefing yesterday, Cabinet Co-Spokesman and Minister Bandula Gunawardena, revealed that over 2,000 legal cases are currently being heard across various provinces regarding the non-payment of statutory allowances by SLSPC, JEDB, and Elkaduwa Plantation Ltd.

“The earnings of these institutions are insufficient to cover the arrears of statutory allowances, such as EPF, ETF, and gratuity, that have accrued over the years,” he said. 

On Monday, the plantation industry stakeholders holding a collective media briefing, claimed that the State-run plantation companies have not given the statutory allowance owed by the SLSPC, JEDB and Elkaduwa Plantation Ltd. to its workers for the past 10 years. 

They warned that the forceful implementation of the Rs. 1,700 minimum wage hike will only lead the private RPCs also to the same benchmark set by the State-run estates, where statutory allowances for workers will be reduced.

Gunawardena said that due to the large number of court cases dragging on for years and resulting substantial legal costs to the Government, it has been deemed appropriate to provide the necessary funds as a loan from the Treasury. 

“These funds will be repaid in instalments from the earnings of the three institutions involved,” the Cabinet Co-Spokesman added.

Gunawardena explained that the decision aims to address the longstanding financial challenges faced by these plantation corporations and ensure that statutory allowances are duly paid, providing relief to the affected employees and helping stabilise the operations of the institutions involved.

The Employees Provident Fund Act No. 15 of 1958 allows the Commissioner General of Labour to reduce the surcharge amount payable related to these arrears. 

The proposal to implement this measure, submitted by President Ranil Wickremesinghe in his capacity as the Finance, Economic Stabilisation and National Policies Minister, received Cabinet approval.