By Professor A.S. Chandrabose &  Dr. R. Ramesh –

The demand for Rs.1,000 as daily wage was made by the trade unions and political parties of the plantation workers  in 2015, but the long –standing demand only became a reality in March 2021, after six years of struggle. Yet, in practice, it has caused more harm to the workers rather than benefiting them in a manner so as to improve their life -style. Accordingly, the daily wage was increased by Rs.300 from the existing daily rate of Rs.700 paid until February 2021. It is pertinent noting here that the wage increase of three hundred rupee includes hundred rupees contribution from the national budget, which can be considered as a major victory in the history of wage increase for the estate workers in Sri Lanka. It was indeed an exciting news for the estate workers, which of course materialized their demand after long periods of struggle. Unfortunately, the new wage became a deadlock in many estates that came under the purview of the Regional Plantation Companies (RPCs) in the country. Within a short period it became a nightmare for the workers in the RPC estates. This article thus attempts to highlight the impact of the new daily wage of Rs.1000, the outcome of the new wage for tea workers and to identify alternative income generating activities that can be carried out in the estate sector to overcome the current crisis and to sustain the industry.

Problems related to the new daily wage of Rs.1000

The trade unions of estate workers initiated the demand for Rs. 1,000 as the daily wage in 2015. However, the regional plantation companies (RPCs) were resisting the demand made by the trade unions. Nevertheless, from the inception, the Rs.1,000 daily wage for estate workers had gained major attention in the country’s media discussions and they gave a wider coverage on this issue. The demand put forward by the estate workers’ trade unions were largely supported to by other counterpart as well – political parties, various civil society movements, academics, the university students and individuals who were alien to the demands made by the estate workers’ trade union intervened, mounting enormous pressure on the government to increase the daily wage of estate workers. There was also a massive demonstration, in the midst of the wage demand, organized by the plantation youth working in Colombo, which held at the Gall Face Green in the month of October 2018. It was considered to be the first protest organized plantation youth in Sri Lanka by using social media such as Facebook. Thus, the estate worker’s daily wage became a nationally as well as internationally important issue indicating that government intervention was imperative.  It should be noted that several political parties supporting the president at that time also backed the demand for the Rs.1.000 daily wage for estate workers while it was also one of the main items in the election manifesto of the major political party that contested the election in 2019.

Eventually, the newly formed government accepted the cabinet paper to increase estate wages from January 2021 onwards. Furthermore, the cabinet had also decided to amend the Wages Board Regulations (WBR) by making it mandatory for tea plantation workers to be paid a minimum of Rs.1,000 a day. The Finance Minister, during his Budget Speech in the parliament, vowed to make a suitable amendment to the Wage Board Regulation in 2021. As such, the new daily wage has two components i.e. Rs.900 provided by the RPC and Rs.100 form the budget allowance.  The EPF and ETF contributions will be based on the total daily wage of Rs.1.000.

According to the new wage, those who work for 20 days in a given month are able to receive around Rs. 17,000 to Rs. 18,000 with all the statuary deductions. Thus, for instance, two people from a family working in the estate will have a combined monthly income of around Rs.34,000 to Rs.36,000. This prospect, is to some extent, 40 percent higher than the monthly income that they had received prior to the announcement of the new estate wage rate. It should be noted that wages were Rs.700 per day prior to announcement of the Rs.1,000 daily rate. Though it took several years to implement this new rate for the workers, they were greatly pleased by this achievement and considered it a milestone victory.

However, there is no uniqueness among the RPCs in implementing the new wage rate for the workers. The management in several estates are not in a position to provide the sufficient number of working days for workers to get the maximum benefit from the new wage. Because the workers’ monthly wage was considerably reduced.  Most of the estate management reiterated that the new wage was decided under wage board regulation, and therefore, the existing Collective Agreement (CA) signed between the trade unions and the Employers’ Federation is no more valid. In the past few months, the mainstream media of this country is also reporting about the instability and emerging issues in the estates in the wake of wage hike. In this regard, several rounds of negotiation between the estate management and the trade unions ended without any pragmatic and amicable solutions. 

Thus, the authors of the essay were able look in to this issue and found the gravity of these issues by looking at the monthly wage slips given by the estate management to the workers. The daily wages were compared in three stages: prior to the new increase; after implementing Rs.1,000 as the daily wage; and the post scenario of the new wage. The three wage slips are illustrated in the following Table 1:

Table 1: Monthly Wage Received by Estate Workers in Selected Months – 2021

According to the table 1, the daily wage for the month of February was Rs. 700. The estate workers who worked for 22 days in the month of February had received a total payment of Rs.18,210. The worker had performed additional work and had received extra money for plucking additional kilos of tea and hence received incentive allowances as agreed in the wage negotiation. Hence, after deduction, the total take home payment was Rs13,397 in the month of February 2021. 

However, in the month of March, workers received salary according to the new pay scale of Rs.1,000 per day, aimed to obtain the maximum benefit of the new wage, worked for 27 ½ days and received Rs.27,200. Finally, with total deductions, the take home pay was Rs.23,297 which was an increase of nearly Rs. 7,900 which is 34 percent higher than the wage received in the previous month. In fact, the new wage has brought about significant changes in the income of workers -a family with two people working in the estate for 27 days would see their  monthly income increase from (Rs 15,397 x 2) Rs.30,794 in the month of February to (Rs.23,297 x2) Rs.46,594  in the month of March 2021. 

However, the new wage became unrealistic for estate workers in the following months, within a short span of time. The third column in Table I provides details of the wage received by the worker during the month of May 2021. The wage of Rs.10,520 is almost a 58 percent reduction when compared to the total wage received in the month of March which is also a 28 percent reduction when compared to wages prior to implementing the Rs.1,000 daily rate. This is an unprecedented situation with regard to wages in the estate. Accordingly, at present, in most cases, the wage was calculated based on the amount of tea leaves plucked by the worker instead of the Rs.1,000 per day calculation which was unwillingly agreed by the RPCs. This appears to be an arbitrary decision of the estate management where they have simply disregarded the government decision. There are no usual monthly pay slips given to the workers which had been in practice for several decades. The statutory deduction of EPF is not made and trade union subscriptions are also not given, which has put the estate workers under the category of temporary or causal workers during the month of May 2021 and this state of affairs continue to date shortly after the wage hike. 

As illustrated in the third column in the above table, the estate management began to calculate worker’s wage rates based on their production.  Hence, the payments were calculated based on the harvest collected; green leaves at the rate of Rs.40 per kilogram. Thus, the total payment for 437 Kilograms of green leaves plucked by the worker in the month of May 2021 was (Rs.40 x 437 Kgs) Rs17,480 which was the total payment for that month. The deductions were Rs.6,960 for food items that were purchased from the corporative shop, bank loan etc. and the final take home money was merely Rs.10,520.

Undoubtedly, the estate workers trade union’s demands for wage revision were based on the grounds of the rising cost of living which was accepted, as mentioned above, due to the numerous pressure exerted not only from trade unions and political parties but also from the civil society movements etc. which made this a reality. It is a well-known fact, that on several occasions, the wage demand put forwarded by trade unions of estate workers were turndown by the RPC representatives at the negotiation table.  And, in case it was agreed, it would be only a marginal increment to the existing daily wage. Even for a marginal increment, the RPCs always expected additional work for the newly adjusted wages. The prime concern of tea estate management is to obtain higher levels of labour productivity at each level of wage increment. As stated above, it becomes very clear that the RPCs have ultimately disregarded the legitimate agreement to pay Rs.1,000 as the daily the wage to the workers. The income distribution in the month of May 2021 is clear evidence to this statement and this stalemate continues to prevail in many RPC estates in the country.

The estate management gave the following reasons for their inability to increase wages and they will be discussed in the second part of the article in detail:

1. Higher wages and  labour cost 

2. Low level of labour productivity 

3. Increasing need for productivity based wage model 

*To be continued..

*The writers can be approached at the following address: Professor A.S.Chandrabose. Department of Social Studies, The Faculty of Humanities and Social Sciences, The Open University of Sri Lanka, Nawala, Nugegoda: ascha@ou.ac.lk/asboseou@yahoo.com  and Dr. R. Ramesh,  Senior Lecturer  Department of Political Sciences,  Faculty of Arts, University of Peradeniya: ramnaresh45@yahoo.com