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Sri Lanka looking into taxpayer top up for mandated estate wage hike: Minister

ECONOMYNEXT- Sri Lanka’s taxpayer support may be extended to supplement a state mandated wage hike to workers of plantations plantations companies, cabinet spokesman minister Ramesh Pathirana said.

Pathirana who is also Plantation Industries Minister said the cabinet is “looking into” providing Treasury support for a 1,000 rupee minimum wage for estate workers, up from 700 rupees, decreed by the cabinet of ministers.

“We are looking into that aspect as well, but they (RPCs) have proposed three models,” Pathirana told reporters on Thursday.

“These are the outgrower, productivity-based incentives and also a revenue sharing model,” he said.

“For an interim period of time, the government may intervene if required,” he said.

Sri Lanka’s privatized Regional Plantations Companies grow tea, rubber, coconut, oil palm and spices.

The last administration also gave 50 rupee tax payer top up to a collective for a year in a agreement signed between unions and workers to take the daily wage to 700 rupees from 500.

Pathirana said the RPCs have in principle agreed to the wage hike but negotiations are ongoing on which model the estate sector will take on in the future.

“We should be able to come to a decision by the first week of March,” he said.

Wages are revised every two years, and the government direction has forced a change one year early.

In addition to the labour cost rise, plantations had to grapple with bad weather, which had pushed the industry into losses in the first half of the 2019/20 financial year.

Estate workers have traditionally worked on an attendance-based model, and have received pay even when they show up for a minimum of 25 days of work per month, even if they are not productive.

The 2016 wage negotiations had given rise to a hybrid model, where workers plucking over 18 kilogrammes of tea leaves per day would gain over kilo rates.

The Institute of Policy Studies, a think tank, has said estate workers earn 3,055 rupees below a living wage every month under the current minimum wage structure. (Colombo/Feb13/2020)

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