Plantation Assn chief unable to consider wage increase

by P. Krishnaswamy

Chairman, Plantation Association of Ceylon (PA), Roshan Rajadurai said that they are unable to consider a wage increase under the current financial straits. This was in response to the government’s warning that estates under the Regional Plantation Companies (RPC) would be taken over if they refused to grant wage increases to the workers.

Labour Relations Minister W.D.J. Seneviratne who mediated at the final three rounds of talks between the plantation trade unions and the RPCs on wage increase to the workers under the biennial Collective Agreement (CA) that expired on March 31, 2015 had said in Parliament, when the talks were deadlocked, that the government would take over the estates if the management companies were rigid on the wage increase issue.

Higher Education and Highways Minister and Leader of the House, Lakshman Kiriella also reiterated it.

The estates are under the management of 22 RPCs on a 55-year lease from 1992. The RPCs were set up in 1992 after the first phase of privatisation formed a major component of the plantation sector in the country, a majority of which comprises tea estates.

The PCs have taken big loans from the World Bank (WB), Asian Development (ADB) and also from local banks to manage the estates in the context of the considerable drop in world market tea prices and the increase in the cost of production, Rajadurai said. While it is not clear whether the statements by the Ministers reflect the government’s stand, the RPCs being legal entilties to the 55-year lease, all its liabilities running to several billions of rupees also should be taken over by the government, Rajadurai said.

There are 193,000 workers under the companies and a Rs.100 wage increase per day would amount Rs.6 billion annually, he said. Under a take over by the government, the gratuity payments to the workers would be a staggering Rs.40 billion, he said.

The sustainability of the industry that is now facing downturn can be ensured only through a production-related wage/remuneration model instead of the CA model, Rajadurai said.

Minister John Seneviratne last Saturday, December 19 told Parliament that the plantation workers would also be encompassed under the Rs. 2,500 pay hike announced under the budget to the private sector employees thus making them liable to receive a Rs.100 wage increase per working day. General Secretary S. Ramanathan of the Joint Plantation Trade Union Centre (JPTUC), one of the three major unions that are signatories to the CA, said that when their discussions with the RPCs were not making any headway, they approached Prime Minister Ranil Wickremesinghe to explain the plight of the workers in November and submitted a written representation to him. It was on his instructions consequently that Minister Seneviratne took steps to get the Rs.100 per working day wage increase to the workers, he said.