Plantation sector wage deal hits deadlock

• RPCs submit “final” proposal aimed at ensuring sustainable earnings model for the sector
• Estate sector unions oppose proposal to extend duration of Collective Agreement up to 4 years 
• Labour Minister says if no agreement reached, he will have to grant salary hike under provisions of Wages Board Ordinance

By Nishel Fernando
With the latest attempt to reach a consensus between Regional Planation Companies (RPCs) and trade unions on a wage structure to grant Rs.1, 000 minimum daily wage to plantation workers bearing no fruit, Labour Minister Nimal Siripala de Silva is looking forward to seek the approval of the Cabinet of Ministers this week to grant the proposed wage increase under the provisions of the Wages Board Ordinance.

Although, RPCs and plantation sector trade unions appear to have reached a consensus on the structure to grant Rs.1, 000 daily minimum wage for plantation workers, which was also proposed in the Budget 2021, the proposal by RPCs to extend the duration of Collective Agreement up to four years from the current two years has been opposed by the trade unions.
In a meeting with the chairmen and top management of RPCs last Friday, Minister de Silva announced that plantation sector trade unions had only agreed to extend the duration of the Collective Agreement only up to two and half years, although the trade unions have finally agreed to a productivity-based wage structure proposed by RPCs to grant the wage increase.
The trade unions earlier had demanded an increase in daily minimum wage of plantation workers to be based on the basic wage instead of allowances. 

Issuing a press release last weekend, RPCs announced that it had submitted a “final” proposal aimed at ensuring a sustainable earnings model for the sector.  “Under the final proposal, RPCs are offering a fixed daily wage of Rs.1,105, 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 in the most recent negotiations,” RPCs said in a statement.

The breakdown of the proposed new wage structure includes a basic wage of Rs.700, EPF/ETF of Rs.105, attendance incentive of Rs.150 and productivity incentive of Rs.150.
The statement noted that under the new proposal, workers would receive a substantial Rs.6, 250 increase to their monthly earnings.  

Minister de Silva pointed out that due to current differences between RPCs and trade unions, it has become impossible to enter into a new Collective Agreement this year.  Hence, he warned both parties that he will be forced to implement the proposed wage increase by resorting to the provisions in the Wages 
Board Ordinance.

“I’m trying my best to settle it and persuade them to enter into a tri-party Collective Agreement as done earlier, but that may take a few days, failing which I have to gazette the salary under the Wages Board Ordinance,” he told Mirror Business. 

The Minister plans to seek the Cabinet approval for this proposal at the Cabinet meeting scheduled for today, if the RPCs and trade unions fail to reach a consensus to enter into a new Collective Agreement granting the proposed wage increase.