RPCs submit final report to Labour Minister
All Sri Lankan Regional Plantation Companies (RPCs) on Friday (15), submitted their final report, on ensuring a sustainable earning model for the sector to Minister of Labour Nimal Siripala de Silva.
Under the final proposal, RPCs are offering a fixed daily wage of Rs 1,105 to the plantation workers, with the re-introduction of attendance and productivity incentives - a feature which Trade Unions had strongly and consistently opposed in the past, but have since reversed their position at the most recent negotiations.
The breakdown is as follows: Basic Wage – Rs 700, EPF/ETF – Rs 105, Attendance Incentive – Rs 150 and Productivity Incentive – Rs 150. Under the new proposal, workers will receive a substantial Rs 6,250 increase to their monthly earnings.
Further to the revised daily wage model, RPCs also propose the implementation of productivity-linked earning components to ensure that workers are finally provided effective incentives and are rewarded for increasing their productivity.
The proposed fixed daily wage model will be implemented three days a week, and on the remaining days, RPCs have called for one of two productivity-based models to be implemented, based on how suitable they would be to each RPC’s unique capacity - enabling workers to earn far more than the fixed Rs 1,105.
Under the productivity-linked component, employees can earn Rs 50 (inclusive of EPF/ETF) for every kilo of tea leaf plucked. In the case of Rubber, this would amount to Rs 125 (inclusive of EPF/ETF) for every kilo of rubber latex.
Alternatively, employees will be remunerated based on a revenue share model, offering greater earnings, similar to what has long been practiced with success in the smallholder sector of Sri Lanka. Companies who do not wish to continue with either of these models, will reserve the right (at their sole discretion), to continue with the standard daily wage system.
Currently, the Cost of Production (CoP) of tea amounts to Rs 615 a day, higher than any other tea producing nation in the world. Out of this, cost of labour accounts for 63% of the total cost of production. With the proposed increase in daily earnings to Rs 1,105, the COP will increase up to Rs 730 a day. Unfortunately, increasing cost of production is expected to be met with stagnant prices in local and international markets, further annihilating the economic viability of the industry.