Sri Lanka tea wage crisis over, Rs6bn extra cost

Sept 14, 2009 (LBO) – A dispute over a wage hike that disrupted tea supplies from Sri Lankan plantations had ended with labour unions agreeing to a deal which will cost the industry about six billion rupees a year, a senior official said. Regional plantations companies (RPCs) and labour unions are to sign a deal today or tomorrow to renew the two-year collective wage agreement that expired in March, said industry spokesman Lalith Obeysekere.

Obeysekere, chairman of the Plantation Services Group of the Employers Federation of Ceylon, which represents the plantations firms in negotiations with unions, told LBO the deal will cost the industry six billion rupee extra each year.

Movement of made tea, which had been disrupted by unions in up-country estates to back demands for a wage hike, had resumed Sunday, said Obeysekere, who is also chief executive of two RPCs, Balangoda and Madulsima.

The RPCs had agreed to raise a worker’s daily wage to 405 rupees from 290 rupees previously. The unions had been demanding a daily wage of 500 rupees.

“The financial impact of the agreement is huge,” said Obeysekere. “For every rupee increase in wage, it will cost the industry 52 million rupees.”

He said the RPCs would be hard-presse