December 19, 2006 (LBO) – Sri Lanka’s estate workers clinched a 260 rupee a day wage deal on Tuesday, ending weeks of strikes on tea and rubber estates that resulted in losses of over a billion rupees. Over 90 percent of workers are represented by trade unions the Ceylon Workers Congress, the Lanka Jathika Estate Workers Union and the Joint Plantation Trade Union Centre.
In a round of talks held on Tuesday, employers and trade unions agreed to a basic wage of 170 rupees a day, a guaranteed price share supplement of 20 rupees and an attendance incentive of 70 rupees.
The revised wages will be effective from November 01, the Employers Federation of Ceylon, representing 21 regional plantation companies, said in a statement.
The 33 percent wage increase will be fixed for the next two years under a collective agreement between employers and estate worker trade unions.
Estate workers have to put in a minimum of 25 days of work a month, resulting in a monthly salary of 6500 rupees or a 1625 rupee increase per worker.
All employees who put in 75 percent attendance each month, gets the attendance incentive of 70 rupees.
“In other words, a worker who is offered 25 days work in a month and reports to work on 18 to 19 days will receive the attendance incentive of 70 rupees in respect of all days worked,” the EFC said.
Each one rupee increase will cost companies an additional 50 million rupees for all the plantation companies, excluding other benefits like Employee Provident Fund (EPF), Employee trust Fund (ETF) and gratuity payments.
“The increase of 65 rupees per day will cost the regional plantation companies in excess of 3 Billion rupees per annum. This wage increase will raise the cost of production of a kilo of tea by approximately 21 rupees. To that extent, the cost of production in many plantations will henceforth exceed 200 rupees per kilo.”
“The companies look forward to increases in the prices of tea in the new year without which they would find it extremely difficult to sustain the new wage package,” the EFC said.
Plantation companies and trade unions have asked estate workers to return to work, after a strike that saw work come to a complete halt on some estates over the past few weeks.
With crops overgrown, estates are likely to take as long as January to recover and get back to optimum production, companies have said.
Sri Lanka has over 250,000 estate workers on plantations belonging to the 21 companies, with the industry producing over 300 million kilos of tea a year.