Sri Lanka plantations firms propose wage model

ECONOMYNEXT – Sri Lanka’s Regional Plantations Companies have proposed a wage model which they say allows daily wage f 1,105 rupees including provident fund contributions or a revenue share model that can lead to higher earnings.

A daily wage of 1,105 rupee had been proposed with an attendance and productivity allowance made up of a Basic Wage – Rs 700, EPF/ETF – Rs 105, Attendance Incentive Rs. 150 and Productivity Incentive Rs. 150.

Under the proposal, workers will receive a Rs. 6,250 increase to their monthly earnings, the RPCs said.

The RPC say the daily wage would be give for three days and on remaining days
one of two productivity-based models to be implemented based on the characteristics of each plantations, which can allow workers to earn more than 1,105 rupees.

Under the productivity-linked component, employees can earn Rs. 50 (inclusive of EPF/ETF) for every kilo of tea leaf plucked. For Rubber, Rs. 125 (inclusive of EPF/ETF) for every kilo of latex would be paid.

“Alternatively, employees will be remunerated based on a revenue share model, offering greater earnings, similar to what has long been practiced with success in the smallholder sector in Sri Lanka,” RPCs sad.

“Companies who do not wish to continue with either of these models, will reserve the right (at their sole discretion), to continue with the standard daily wage system.”

Currently, the Cost of Production (COP) of tea amounts to Rs. 615 a day, higher than any other tea producing nation in the world.

Labour was 63 percent of the total cost of production. With the proposed increase in daily earnings to Rs. 1,105, the COP will increase up to Rs. 730 a day.

The auction price of auction price of RPC tea reached an all-time high of Rs. 601 per kg on average (USD 3.99) in 2017 and has since fallen to Rs. 581/kg (USD 3.16).





But it was still higher than the USD 1.94 in Mombasa auction in Kenya.

Countries like Kenya has raised production by 50 percent, which had increased supplies, the companies said.

The firms say they are offering a higher wage as other industries like apparels have slashed wages amid a Coronavirus outbreak. (Colombo/Jan16/2021)

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