RPCs submit fresh proposal to boost worker earnings

• Provides hybrid between daily wage model and productivity-linked earning system
• Says will continue to offer fixed daily wage with re-introduction of attendance and productivity incentives
• But proposes mix of 3 days of daily wage and 3 days of productivity-based earnings
• Says under the new daily-wage component of the proposal, workers will be paid a total Rs.1,025 for a day’s work

Taking a cue from the success of the smallholder sector, Sri Lanka’s Regional Plantation Companies (RPCs) have handed over a fresh proposal aimed at radically expanding worker earnings during a recently concluded meeting with the Labour Minister and trade union leaders.

“The newly introduced proposal provides for a hybrid between the daily wage model and the productivity-linked earning systems implemented with great success in the smallholder sector. Adding a productivity-based component will ensure that worker earnings are expanded, and workers have more flexibility and control over their monthly earnings,” a statement issued by the Planters’ Association (PA) of Ceylon said.

Under the new proposal, RPCs will continue to offer a fixed daily wage with the re-introduction of attendance and productivity incentives. In a notable departure from previous years, the RPCs have proposed a mix of 3 days of daily wage and 3 days of productivity-based earnings, where workers will have the capacity to expand their earnings based on their output. The first alternative under the productivity-linked proposal is a system where workers are paid Rs. 50 for every kilo of green tea leaf plucked (inclusive of EPF/ETF). Where a high plucking average of between 30-40kgs a day is attained (over and above the existing norm), workers have the potential of expanding their earnings exponentially. 

“In the case of the Rs. 50 rate, a worker who plucks 20 kg will receive Rs. 1,000 per day, and monthly pay of Rs. 25,000. Current annual plucking averages among RPC companies are between 20-22kgs a day. However, a majority of the best harvesters have plucking averages between 30-40kgs, this means that earnings can now be expanded to over Rs. 37,500-62,000 per month,” the PA statement said.

The next alternative is that workers are remunerated based on a share of the National Sales Average (NSA) ratio of 35 percent.  

Furthermore, under the new daily-wage component of the proposal, workers will be paid a total Rs. 1,025 for a day’s work.  The breakdown is as follows: basic wage – Rs. 700, EPF/ETF – Rs.105, attendance incentive – Rs. 70, production incentive – Rs. 75 and price share supplement – Rs. 75. 

If workers are to be compensated purely on this model, they will see an increase in their monthly earnings by Rs. 4,250. If workers exceed the plucking norm, they will receive a higher compensation. 

In pilot projects conducted on RPC estates and according to studies conducted by the Tea Research Institute, such productivity-linked models have been proven time and again to tremendously increase worker productivity and earnings. 

The RPC proposal also recommends the discretion be given to companies to choose between the implementation of either model. 

“We urge all stakeholders to carefully consider the extremely valuable benefits that our proposals offer. We must move away from the traditional wage system and look towards the sustainability of the industry, where workers can become empowered entrepreneurs. 

“Once productivity models are implemented, workers will have the benefit of flexi-hours, and worker mobility where other family members can contribute towards the earning process as well. Our workers will have a say in when and how they work, and drastically improve their earnings in the process,” PA Chairman Bhathiya Bulumulla asserted.