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Sri Lanka plantations offer Rs1,000 wage for higher productivity

EconomyNext – Sri Lanka’s regional plantation companies have said they are willing to meet labour union demands to raise daily pay to 1,000 rupees if workers agree to improve their productivity and pluck more tea.

The productivity-based formula provides opportunity for workers to improve earnings through greater output, the Planters’ Association which represents RPCs said.

“The demand of plantation sector trade unions for an unconditional increase of the daily wage of estate workers to 1,000 rupees – a massive 62 percent increase from the 620 rupees at present – is inconceivable in any industry,” it said.

A statement said the RPCs are finding even the present daily wage to be significantly above production costs and are experiencing negative cash flows.

The RPCs have proposed an 11 percent increase in the basic wage to 500 (from 450 rupees at present) for a minimum daily plucking average of 15 kg of tea leaves.

Each additional kilogramme plucked will be paid for at 40 rupees, an increase from the 23 rupees paid at present.

This will enable a worker who plucks 25kg of tea leaves to earn 1,000 rupees a day (including provident fund contributions), “enabling productive workers to significantly increase their incomes,” the statement said.

The productivity based proposal of the RPCs have been discussed with trade unions and offers a more sustainable solution to the workers’ needs for an increase in income, it said.

“An unconditional increase of the daily wage to 1,000 rupees is impossible at present, as it would require the average revenue from a kilogramme of tea at the Colombo tea auction to be 660 rupees, for a plantation company to merely breakeven,” the statement said.

In contrast, in June 2015, the average price of a kilogramme of tea at the auction was only 400 rupees while the production cost exceeds 450 rupees.





The RPCs said there is significant room for improvement of productivity, particularly through increase in ‘effective plucking time,’ time actually spent on the plucking of tea.

Labour productivity and effective plucking time are among the world’s lowest in the tea industry in Sri Lanka – despite wages and other benefits including housing being among the best among tea producing economies, they said.
(Colombo/July 13, 2015)

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