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Wednesday, 27 January 2021 00:22 - - {{hitsCtrl.values.hits}}
By Uditha Jayasinghe
Attempting a different approach to end a two-year deadlock over plantation wages, the Cabinet has approved a proposal to take the issue before the Wages Board so the daily wage of a plantation worker can be increased to Rs. 1,000, triggering mixed reactions from stakeholders yesterday.
Cabinet on Monday approved a proposal presented by Labour Minister Nimal Siripala de Silva to present the matter before the Wages Board.
Despite the Cabinet decision, Minister de Silva told reporters there was still time for Regional Plantation Companies (RPCs), represented by the Employers Federation of Ceylon (EFC) and trade unions to formulate a collective agreement to set the daily wage at Rs. 1,000.
“There have been multiple rounds of discussions, but no agreement was reached so I had no choice but to resort to involving the Wages Board. However, under the present regulations it takes a minimum of two weeks for the Wages Board to be summoned. So, there is still time for the plantation companies and the trade unions to come to an agreement.
“I’m still open to taking forward the collective agreement but we can’t wait a long time. If they are willing to talk, I think we should reach a decision in one week,” he said at a gathering at the Labour Secretariat yesterday.
As a back-up measure the Minister insisted he would commence the process to convene the Wages Board from today. Ministry sources said the gazetting of new Wages Board members is likely to take a few days. The Board, once constituted, will have representatives from RPCs, unions and the Labour Minister.
Former Planters Association Chairman and Hayleys Plantations Managing Director Dr. Roshan Rajadurai described the move by the Labour Minister as “short-sighted” and “unsustainable”, warning that the industry did not have the capacity to earn the additional Rs. 12.5 billion needed to meet the cost companies would have to pay if the daily wage is set at Rs. 1,000.
He also pointed out that SL was already contending with high costs of production and low global prices, which would result in RPCs having to engage in serious cost cutting measures to meet the increased wage expenditure.
“We have made it very clear that the industry cannot meet this expense. Already our earnings in 2020 per kilo of tea is about Rs. 580, but the cost of production is Rs. 615. If the daily wage is set at Rs. 1,000 without being tied to productivity then we will only be able to pluck and sell. There will be no funds for fertiliser, upkeep and other measures. But we will engage with the Wages Board and see what happens,” he told Daily FT.
The Government has supported the trade unions demand for a Rs. 1,000 daily wage with the proposal entered into the Budget for 2021. Nonetheless, both the RPCs and some smaller trade unions and civil society organisations are worried that the intervention of the Wages Board will end the tripartite collective agreement, which also included a welfare component that will not be covered by the Board.
They also warned taking the daily wage issue to the Wages Board could trigger more demands for higher basic wages from other sectors that would also need to be addressed. Currently, the Wages Board cannot set salaries for only the plantation sector and it is unclear how the Labour Ministry will deal with this hurdle.
“We believe it is essential for the daily wage to be increased to Rs. 1,000, but given the diversity of the Wages Board members there is no guarantee they will agree to our demand. If a collective agreement is not possible then the Labour Minister should draft a wage bill and pass it through parliament to ensure the change.
“Unfortunately, the Wages Board operates under the Labour Ordinance that does not have a welfare component so the welfare aspects included in the collective agreement could be overlooked by the Board,” said Movement for Plantation People’s Land Rights Convenor Thangavel Ganeshalingam, whose organisation has over 6,000 members covering five tea growing provinces.
Hit by the COVID-19 pandemic and other challenges, the Tea industry weathered a tough year in 2020, with exports down and production plunging to its lowest in 23 years, according to the latest report by Forbes and Walker Tea Brokers.
Tea export volumes in 2020 declined by 9.2% or 27 million kilos to 265.5 million kilos from the previous year, whilst in value terms, the performance was down by Rs. 10.4 billion or 4.3% to Rs. 230.1 billion from 2019, which recorded the highest figure. The latter is despite Free-on-Board (FOB) unit value of tea rising to its highest ever of Rs. 866.70 per kilo, up by 5.4% from 2019.
