PA calls on industry to cooperate in formalising revenue-sharing wage model linked to productivity

From left: Planters’ Association of Ceylon Vice Chairman Dushanth Ratwatte, Media Spokesperson and former Planters’ Association of Ceylon Chairman Dr. Roshan Rajadurai, Planters’ Association of Ceylon Chairman Senaka Alawattegama and Planters’ Association of Ceylon Secretary General Lalith Obeyesekere

• Stresses that continuity of current wage model will be detrimental to industry
• TUs currently looking to increase wages by 100% to Rs.2,000 per day
• Points out revenue-sharing model will give workers greater flexibility in addition to higher earning capacity

By Shabiya Ali Ahlam
The Planter’s Association (PA) of Ceylon called on the industry stakeholders to cooperate and expedite the formalisation of the revenue-sharing wage model that is linked to productivity, so that all players in the sector would stand to gain and collectively reap benefits.

The trade unions (TUs) are currently having discussions to increase the daily wage by 100 percent, to Rs.2,000, which if goes through without any improvement in worker productivity, will severely hamper the plantation sector output.

The senior PA officials pointed out that the Regional Plantation Companies (RPCs) are in agreement that the wages need to be increased, given the rise in inflation and escalating cost of living but stressed that a productivity-linked model is now essential than ever to provide the workers with a sustainable livelihood. 

“If the workers are paid based on how much they pluck and how much that harvest receives at auction, then their compensation would be dynamically adjusted. Had we implemented such a system, in line with what the RPCs had proposed even during the last wage negotiations, there would have been no need for the state to intervene in wage setting,” PA Chairman Senaka Alawattegama said, addressing the media this week.

The system, which directly links wages to the price and quantity of the tea sold at the Colombo Tea Auction, is already in 20 percent of the RPC estates and 80 percent of tea smallholder estates.

While a section of the stakeholders has started to realise the value of the revenue-sharing model, the TUs are still too keen on implementing the same and are determined to continue with the old wage model system, shared the PA senior official. “There seems to be a misunderstanding despite us having explained how the model works. The TUs seem to be under the impression that by opting for the revenue-share model, they would lose the benefits they have been receiving at the estates so far. It’s not the case. The benefits will continue,” said Alawattegama, setting the record straight. If the productivity-based model is implemented on the RPCs, instead of the Rs.1,000 daily wages, the workers would be receiving an average of Rs.50,000-Rs.60,000 per month, if they harvested a minimum of 18kg. In addition to increasing worker earnings, improved labour productivity, which is currently the lowest in the world, would result in a reduction of the industry’s overall cost of production, which is the highest in the world, he added.

Alawattegama affirmed that the productivity-linked wage would also give workers exponentially greater control and flexibility over the time and duration of the work they carry out.