Will continue to oppose 70% wage increase, says Planters’ Association

• Asserts wages must be intrinsically linked to productivity
• Says fixed wage hike will elevate cost of tea production to Rs.1450 per kg, surpassing auction sale average of Rs.1250 per kg

The Planters’ Association of Ceylon (PA) yesterday said it would stand its ground and not agree to pay the sudden wage increase to the plantation sector as announced on May Day. 
Stating it has “no option”, the PA yesterday issued a statement asserting it would continue to oppose the sudden Wages Board decree to increase the fixed wage of the tea and rubber sector workers by an unprecedented 70 percent, on account of a lack of due process and unaffordability, with the matter being taken up for consideration before the Appeal and Supreme Courts. 

The PA emphasised that the wages must be intrinsically linked to productivity, to ensure the sustainability of the businesses and workers’ livelihoods. 
Sri Lanka already grapples with the highest production costs, wages and lowest productivity among all tea growing nations. Notably, the newly gazetted wage is double that of India, creating significant cost disparities in the global market, it pointed out. 
“This unilateral increase affects not only the regional plantation companies but also over 400 private tea factories in the Sabaragamuwa and Southern provinces, smallholders employing external labour and all rubber producers and factories,” the PA said. 
According to the PA, the fixed wage hike will elevate the cost of tea production to Rs.1450 per kilogramme, surpassing the auction sale average of Rs.1250 per kilogramme. 
“This substantial gross loss poses serious financial challenges to the industry’s sustainability. The industry has heavy borrowings, a Wages Board-mandated business failure will also impact the financial sector,” it said. 
The PA went on to highlight that the annual cost of the 70 percent fixed wage increase exceeds the consolidated tea and rubber profitability of all Regional Plantation Companies by several multiples. 
Currently, the workers receive income from both fixed wages and productivity-based formulas, alongside the EPF, ETF, gratuity and other provided services. 
The PA concluded its statement pointing out that it is committed to safeguarding and enhancing employee livelihoods in a sustainable manner, which secures the long-term viability of the industry and its employees.