Plantations wage negotiations stalled

Negotiations between plantation unions and plantation companies virtually collapsed last week with unions pulling out of the discussion after both sides failed to reach agreement on a new wages pact.

But the Employers’ Federation of Ceylon (EFC), representing the companies, expressed hopes that the negotiations would continue.

"The EFC has informed the unions to reconsider their proposals. We continue to look forward to working with the trade unions in this regard," EFC Director-General Gotabaya Dasanayake said in a statement.

M.S.A.H. Mohideen, Administrative Secretary to the Lanka Jathika Estate Workers' Union (LJEWU) told The Sunday Times FT that the discussions held this past week were a failure and the unions have withdrawn from the bargaining process.

He said the unions met last week and agreed on a wage demand. The current wage for plantation workers is Rs.180 which includes a basic wage, an attendance incentive and Price Share Supplement (PSS). The unions are asking for an increase of Rs.115, the breakdown of which would be Rs.155 as a basic wage, Rs.50 as an attendance incentive and Rs.50 for the PSS, bringing the total to Rs.295. The EFC in return informed the unions they are only willing to increase wages up to a total package of Rs.220, constituting a basic wage of Rs.155, an attendance incentive of Rs.40 and a PSS of Rs.25, signifying a 22% increase from the current wage rate. "We were willing to come down in our demands when the Employers Federation refused our price," said Mohideen, adding that the unions were willing to compromise and bring their asking price down to Rs.280. However, the EFC had refused this offer as well which led to the halt in negotiations. "After all, cost of living has gone up and workers need better pay." The EFC statement said that at the rate of 25 days of work per month which the companies are obliged to offer, the monthly minimum income of a worker in terms of the company proposals would be Rs 5,500 plus the "add ons". Since 1998, the EFC has through the collective bargaining process revised employee wages on a regular basis through four Collective Agreements. The average increase provided for in each such agreement was approx 20% of the wage package.

Dasanayaka also says that the wage increase asked by the unions in the current negotiations exceeds 50% of the current wage package. On the basis of an average of approx 50 million man days per year for the tea and rubber plantations, a Rs 115 per day increase as sought by the unions will without any "added on" costs such as EPF, ETF, gratuity, etc amount to about Rs 5 billion per year. The additional impact this increase will have on the cost of production will be approximately Rs 42 per kg of tea. “Such increases will make it impossible for our teas to be sold at a profit in the market. In the last ended financial year for the 21 tea/rubber companies, eight recorded losses in operations and the profit made by the companies put together was less than Rs 50 million. The companies cannot afford or sustain an increase as requested by the unions,” Dasanayaka’s statement said. Mohideen disagreed saying the companies are making huge profits and that though the COP shows the companies running at a loss, they are making substantial profits. "There is no transparency with the companies." Mohideen who formerly worked as a medical assistant on a plantation and knows the workings of plantations closely said: "At least they can pay a living wage." The unions are meeting this week to decide on the next course of action.