Planters Association Proposes Productivity -based Wage Model

By Rajiesh Seetharam | Published: 2:00 AM Nov 19 2020

By Rajiesh Seetharam

The Planter’s Association of Ceylon (PA) is proposing to change the current attendance-based wage system to a productivity-based wage system which would increase the earning capacity of worker’s as well as benefit the plantation company with higher productivity. 

Speaking at a virtual Media briefing, PA Chairman, Bhathiya Bulumulla said, “This is the only way forward and we urge all stakeholders interested in the future of plantation families to support the move which will see the employees earn as much as Rs 55,000 to 70,000/- per month. Collective agreements with the trade union comes to an end by January 2021. We will put forward the new model to the trade union. There can’t be any reason for them to oppose the proposed model, as it will provide an opportunity for plantation workers to earn more than their demand wage of Rs 1000/- per day.”

PA Media Spokesperson Dr. Roshan Rajadurai stated that there were 350,000 workers in the plantation sector at the time of privatisation in the early ‘90s, which has now reduced to 150,000 as a result of migration outside estates, caused due to limited earning capacity and a inferiority complex of being a daily wage earner, and the history of being felt inferior in society during the colonial era. 

“All these issues can be sorted with our newly proposed wage model, where workers can become entrepreneurs and take control of their earnings themselves. This will be the first step towards modernising the entire industry to be globally competitive, while ensuring fair and sustainable livelihoods for our employees,” noted Dr. Rajadurai.

Following privatisation in 1992, the Cost of Production (CoP) of the tea industry has increased steadily, although productivity and output have not increased proportionally, noted Dr. Rajadurai. 

“By 2018, CoP has increased by 913% since 1993 (Rs.72 to Rs. 730) and labour wage has increased by 631% (Rs 78 to Rs. 570). The current labour component within COP is 63%, while it is only around 11% for other industries.”

Dr. Rajadurai further noted that the model is successfully followed by small sector estates, few Regional Plantation Companies and also practiced in other countries like India.

When wages are linked to productivity, the total CoP has shown to reduce, while worker earnings increase. This is simply how economies of scale work, added Dr. Rajadurai. 

“We pay our workers more than any other tea producer in the world, and yet we record some of the lowest levels of labour productivity. We do not want to pay our workers less either. Sri Lankan RPC wages are higher than daily wages in the plantation sector of other competing countries, While the Sri Lankan daily wage is Rs 750, it is Rs. 487.20 in South India and Rs 443.30 in Kenya.”

 The spokesman noted that in addition to better earning capacity; the new proposed model can also pave the way to provide workers with much greater flexibility in their working hours, meaning that once they hit their quota, they can utilise the rest of their time for their own purposes. Meanwhile, the newly proposed model does not deprive plantation workers from any current statutory benefits they enjoy stated Dr. Rajadurai.

“Published research has already proved that on estates where wages are linked to productivity, workers have the potential to earn more than Rs 65,000 a month. Even among our employees, there is now an understanding that this reform will benefit them the most.” explained Dr. Rajadurai. 

By Rajiesh Seetharam | Published: 2:00 AM Nov 19 2020

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