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| Sunday, 21 July 2002 |
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| News Business Features Editorial
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Wage hike not justified by Elmo Leonard The move by trade unions to increase wages of plantations workers was described as unjustified by shareholders of plantation companies who met at their annual general meetings last week. Only 3 of the 26 tea plantation companies were currently running at a profit, a director of a multinational tea company based in Colombo said. "While the current Colombo tea auction price is around Rs 132 per kilo, the cost of production of a kilo of tea was around Rs 120 to Rs 140 per kilo," a tea broker said. Increased wages would mean that the Madulsima and Balangoda Plantations (under the Stassen group) would have to incur a further cost of Rs 250 million to pay salaries, Managing Director of the two companies, Harry Jayawardena said. "The almost annual wage increases are being forced down our throats," Jayawardena said. "We have asked the government to take over the plantations again, and compensate us for the work we have done over the past seven years," he said. The price of electricity and fuel was rising, further adding to the cost of production. Some companies had over 25,000 workers. It would mean that a further Rs 70 to Rs 80 million would be needed to meet increased costs, shareholders pointed out. A spokesman for the Employers' Federation of Ceylon declined to comment on the demands of the trade unions to increase wages, on the grounds that negotiations were ongoing. Colombo's tea trade is unanimous that the wage increases asked for, from time to time, were politically biased. The wage increases were never backed by improvements in the product or productivity on the side of the workers. Shareholders argued that estate employees received housing, electricity, water and education, including creches, free of charge, and some food rations. Balangoda Plantations had spent Rs 22.5 million during 2001 in improving such facilities. Shareholders said the plantation companies should charge for what was now given free of charge, if the politically backed trade unions continued to demand increased wages. This demand for increased wages has been continuing for over a decade. The ninth AGM of Madulsima Plantations Ltd. was told that in spite of a collective agreement signed with the four major unions in June 2000 to be effective till June 2002, the workers had organised a work stoppage in March 2001. The resulting labour wages and labour-related issues such as holiday pay and retiring gratuity act had resulted in an increase of Rs 49 million which was an increase of 54 per cent on the total cost of production. During the year under review, the amount paid to estate staff as salaries had increased by Rs 4.6 million. Shareholders pointed out that all plantation companies were spending large sums of their funds towards improving the social standards of their workers. The Balangoda Plantations Ltd. annual report for 2001 states that the living conditions of the workers improved noticeably over the years and particularly after the privatisation of the estates. Balangoda Plantations Chairman V.P. Vittachi said the two plantation companies in his group and other plantation companies had joined hands with State organisations and other donor agencies to uplift the infrastructure, improve medical facilities and develop water supply schemes. |
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