Sri Lankan plantation companies ask unions to compromise to settle wage talks

Nov 16, 2006 (LBO) – Sri Lanka’s plantation companies have asked estate worker unions to compromise on a wage increase, in efforts to jumpstart talks that broke down this week.

Talks between plantation sector trade unions and employers broke down after both sides failed to reach an agreement on a wage increase for workers under a three year collective agreement.

Workers currently take home 180 rupees a day, which includes 135 rupees as a basic wage, a 25 rupee attendance incentive and a fixed price share supplement of 20 rupees.

A variable price share supplement of 15 rupees a day, also applies.

Companies however say that union demands amount to a 50 percent increase in the wage package, which most regional plantation companies are unable to afford.

Companies have offered a daily wage of 220 rupees a day, including a daily wage of 155 rupees, a fixed price share supplement of 25 rupees and an attendance incentive of 40 rupees.

The increase would be a 22 percent hike in worker incomes, in addition to variable price share supplements, the Employers Federation of Ceylon said in a statement on Thursday.

“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 5,500 rupees, plus the “add ons”, the EFC said.

Employers say union demands for a 100 rupee a day increase, without other added costs or employee benefits, would amount to five billion rupees a year.

“The additional impact this increase will have on the cost of production will be approximately 42 rupees per kilo of tea. Such increases will make it impossible for our teas to be sold at a profit in the market.

This time, unions have asked for a daily wage of 295 rupees, which includes a basic wage of 195 rupees, an attendance incentive of 50 rupees and a price share supplement of 50 rupees.

There a 21 regional plantation companies growing tea and rubber, with eight of them recording losses in the last financial year and collective profits by all companies adding up to just 50 million rupees, the EFC said.

“The Companies cannot afford or sustain an increase as requested by the unions. The EFC has informed the Unions to reconsider their proposal having regard to the foregoing, for a continuation of negotiations with a view to reaching a mutually acceptable agreement as in previous years.”

Talks in previous years have also been volatile, with work stoppages on estates as well as yield and productivity losses, as both sides struggled to reach a settlement.

Three unions – the Ceylon Workers Congress, the Lanka Jathika Estate Workers Union and the Joint Plantations Trade Union Centre, represent some 250,000 workers.
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