RPCs told to submit proposals to facilitate wage hike

By Nishel Fernando
The Regional Plantation Companies (RPCs) have agreed to consider favourably and to submit their proposals to implement the government’s decision to increase the minimum daily wage of plantation workers to Rs.1,000, with effect from March 1, somewhat backing down from their earlier position to oppose the wage hike.

Top officials of the Planters’ Association (PA) of Ceylon, representing the RPCs, yesterday held extensive discussions with Plantation Industries and Export Agriculture Minister Dr. Ramesh Pathirana with the participation of key ministry officials, including the ministry secretary and Sri Lanka Tea Board (SLTB) Chairman Jayampathy Molligoda, on the proposed wage increase for plantation workers.

A PA official told Mirror Business that the meeting was cordial and Dr. Pathirana acknowledged the financial concerns expressed by the RPCs. 

“We expressed our concerns to the minister and they were well received and appreciated. He understood our difficult position,” the official added. 

The majority of RPCs are currently loss-making except for a handful of RPCs such as Kegalle Plantations, Elpitiya Plantations, Namunukula Plantations, Talawakelle Plantations and Watawala Plantations.

Low tea auction prices, changing weather patterns, dwindling yields and ad hoc state policies are blamed for the current state of RPCs. 

The PA officials initially briefed the minister that the RPCs were not in a position to accommodate the wage hike, citing that their cost of production would rise to Rs.730 per kilo with auction prices for high-grown teas at only Rs.510 per kilo. The PA has estimated that if the proposed salary increase were to be implemented, the wage bill for the RPCs, including gratuity payments, would increase by Rs.12-14 billion. After hearing the industry concerns, the minister had requested the RPCs to consider the government’s decision to grant the proposed wage hike favourably, either through a productivity-based model or any other model suitable for the RPCs.  “Initially, the RPCs were opposing the wage hike citing financial reasons. However, they agreed to come up with suggestions to implement the government decision during the meeting,” a top government official told Mirror Business. The PA is expected to come back with its proposals within the next two to three days. 

Molligoda, who was a former Deputy Chairman of Bogawantalawa Tea Estates PLC, has been appointed to coordinate the negotiations between the government and RPCs.