Worker wages with revenue share is only solution: Plantation Companies


Oct 21, 2015 (LBO) – Sri Lanka Regional Plantation Companies (RPCs) have come up with a model for the pressing wage problem of plantation workers and recommend a revenue sharing model for remuneration, a statement said.

“The revenue sharing model is now clearly the only viable, mutually beneficial and sustainable solution for the country’s plantation industry and its workers, particularly considering that there is room for significant improvement in the daily plucking average of tea even without increase in overall plucking time,” Roshan Rajadurai, chairman of Planters’ Association was quoted saying in the media release.

“Clearly, persisting with the present model which has resulted in labour costs spiralling to unviable levels and has dragged the industry further downwards, cannot be sustained and all stakeholders must break away from the redundant thinking of the past and accept the present-day reality,” he said.

“We must have the courage to move out from the current attendance based wage model which under the current prevailing conditions will only lead the industry to disaster and to eventual dissipation,”

“We must be wise enough not to persist in a system that we know will cause harm to both constituencies; the workers and the estates that provide their livelihood. Saner counsel and the spirit of partnership must prevail in order that long term interests of the one million or so dependents are protected, by ensuring that the estates are in operation for years to come and are in sustainable business.”

He said about one million people are dependent on the Regional Plantation Companies although only 183,000 are registered workers and this system.

The RPCs also proposed a productivity-based wage model earlier which however did not receive the consent of estate sector trade unions.

RPC says with incurring a staggering loss of 4,000 million rupees on tea and rubber last year, the new proposal enables high labour costs to be mitigated by improving worker productivity through performance-related pay – similar to the smallholder model – while enabling workers also to earn well beyond their present income and represents a win-win, with an increase in the daily wage with no link to productivity being economically infeasible.

In the new model, remuneration depends on the worker’s output as opposed to the archaic attendance-based wage used at present, which provides little incentive to increase productivity and the new model thus also gives workers greater control over their earnings.

Based on the proposal, the harvesting operation – which is the only revenue generating operation in the estate – is to be executed in this manner initially and the harvesters will be paid a predetermined value as already done in the Bought Leaf Formula, based on the prices realised at the Auction.

All the other agricultural, agronomic and management practices and inputs, supervision, support services, logistics and the traditional services, facilities and benefits will be continued in the usual manner without any change.

“Fundamentally this model is to enhance and to increase the ability and the opportunity for the workers to earn as much as they wish to work for, instead of being confined to a daily wage purely based on attendance.” the statement said.

RPC’s say in addition, the Employees’ Provident Fund (EPF) and Employee’s Trust Fund (ETF) contributions will be made jointly based on the income earned.

Accordingly an agreement will be signed between each registered worker and the company for six months and each worker shall be allocated to pluck a specific number of tea bushes from all categories/yields.