Tea owners and workers still at loggerheads over pay hike

Chathuri Dissanayake

The Planters’ Association, yesterday, tossed the ball back on to Plantation Minister Naveen Dissanayake’s court to reach a compromise with the trade unions demanding a wage increase.

Discussions between plantation companies and trade unions ended in a stalemate as two of the main trade unions, Ceylon Workers’ Congress (CWC) and Joint Estate Workers’ Union, both signatory to the collective agreement, were not present. The CWC claimed that they were not invited to yesterday’s discussion and are to meet on 13 October for negotiations.



“Plantation companies are going by the statement made by Labour Minister John Senevirathne where he said all trade unions have agreed to the proposed wage,” Planters’ Association Chairman Sunil Poholiyadde told Daily FT.

The CWC, the largest trade union membership in the sector, claimed they were not informed of yesterday’s meeting.

Indicating a division among the trade unions, CWC parliamentarian Mutu Sivalingam said that they are unaware of what the other trade unions have negotiated on. 

Sivalingam also lashed out at the leaders of Lanka Jathika Estate Workers’ Union – the only union present at yesterday’s meeting – for misleading the membership.

“They have told some Tamil media newspapers that they will not step down from the original demand of Rs. 1,000, but have already agreed to the offered Rs.730. Listening to them, workers are still demanding Rs.1,000 wage,” he said.

“There were workers’ strikes in Nuwera Eliya even yesterday due to this.”

When asked if the CWC was in agreement with the current offer made by the plantation companies, Sivalingam said that they would have to know the exact details of how the wage increase is calculated before agreeing.

 However, according to the statement issued by the Ministry of Plantation Industries, details of the wage increase are to be finalised before signing of the agreement on 14 October.

The companies yesterday offered a basic wage of Rs. 500 totalling to Rs. 730 which includes productivity based incentives.  Plantation companies have maintained that they are ready to increase the wage based on a productivity based formula. However, the trade unions have been largely opposed to a productivity based wage formula from the beginning of wage negotiations last year.

Poholiyadde highlighted that the plantation companies had agreed to the increase despite being unable to afford such increases due to low commodity prices, as they view the move as the first step towards a productivity based wage formula.

“Taking into consideration the future of the industry, the companies have agreed to increase the wages because this is a step to move into a productivity based wage,” he explained.

Poor crop boosts tea sales average to record high in Sept.

In the backdrop of a sharp decline in production due to extremely dry weather conditions, the Colombo tea auction averages reached and all time high of Rs. 512.03, a gain of Rs. 143.85 from a year earlier, produce broker Forbes and Walker said.

However it said whilst the current tea prices look attractive, plantations still continue to be unprofitable due to the extremely poor crop intake coupled with high production cost.

Auction average totalled Rs. 512.03 for the month of September 2016 showing a gain of Rs. 143.85 vis-à-vis Rs.368.18 of September 2015 thus recording the highest-ever average for a single month, Forbes and Walker Tea Brokers said. 

High Grown average totalling Rs. 463.46 have shown a gain of Rs.83.65 vis-à-vis Rs.379.81 of September 2015. Similarly Mediums too averaging Rs. 455.83 have shown a substantial gain of Rs. 121.46 vis-à-vis Rs. 334.71 of September 2015. 

Low Growns once again have shown a fairly significant increase with the September 2016 average of Rs. 537.74 showing a gain Rs.165.73 vis-à-vis Rs.372.01 of September 2015.It is also noteworthy that these levels show a significant gain in USD terms too when compared to September 2015.

The January-September cumulative average of Rs. 442.08, show a gain of Rs.41.00 vis-à-vis Rs. 401.08. Here again High Growns totalling Rs. 426.83 show a gain of Rs.43.22 vis-à-vis Rs. 383.61 of January-September 2015 whilst Mediums averaging Rs.400.07 show a gain of Rs.37.95 vis-à-vis Rs.362.12 of January-September 2015. 

Low Growns totalling Rs. 457.94 for the period of January-September 2016 show a gain of Rs. 41.24 vis-à-vis Rs. 416.70 of January-September 2015. It is also relevant that these averages have shown a growth in USD terms too, when compared to January-September 2015.