ECONOMYNEXT – Sri Lanka’s regional plantations companies – commercial farms growing tea, rubber and oil palm – should start wage negotiations early, Plantations Industries Minister Navin Dissanayake said.
The negotiations for a collective agreement is usually held with the involvement of unions, the Employers Federation of Ceylon which represents companies.
He urged companies not to be caught by surprise but be well prepared.
The companies have been pushing for productivity related wages, on which some progress has been made.
Minister Dissanayake said with better tea prices over the last year, unions are also likely to demand a higher wage.
Politics is also likely to come into the negotiations, he told top mangers of regional plantations companies in Colombo Friday.
The higher prices are partly coming because the central bank printed money and broke a soft-dollar peg in 2016 and continued to depreciate the currency in 2017 despite, running contractionary policy (sterilizing dollar purchases) as credit slowed.
The inflation generated from currency depreciation has undermined real wages of all workers.
Economic analysts say the broad-brush collective agreements may be hurting workers, with more productive workers not being given a chance to earn more and may also work against labour mobility.
Though some plantations are facing severe shortages – especially those bordering the Western province – there is no incentive for workers to move from excess areas as wages are the same.
Some plantations have moved to oil palm to reduce the demand for labour. (COLOMBO/June03/2018)