The recent wage hike for plantation workers will result in plantation companies having to fork out an additional five billion rupees annually on wages, claims the Plantation Services Group of the Employers Federation of Ceylon.
Although a wage hike was given for plantation workers, the companies are facing a daunting task to bear the additional cost as they are not getting a better price for their produce.
Plantation companies have come to a collective agreement with three plantation unions – the Ceylon Workers
Congress, the UNP affiliated Lanka Jathika Estate Union and the Joint Plantation Trade Union Center (JPTCU) to give a 20% wage hike from April 1 which is an increase in the daily wage from Rs.515 to Rs.620 according to Plantation Services Group of the Employers Federation of Ceylon.
President Plantation Services Group of the Employers Federation of Ceylon, Sunil Poliyadda said that although a wage hike was agreed for the plantation workers, the employers are finding it difficult to bear the cost as they are not getting a good price for the produce.
“However this increase is much lower than what we have given them previously. The industry cannot afford to increase the wages more than what has been given as although our costs are so high we do not get a competitive price for our produce,” said Poliyadda.
According to him, the plantation industry would collapse if a further wage hike was given.
“Although we have given much higher wages in the past the plantation companies incurred severe losses.
Most of the tea producing companies still cannot absorb the additional cost they have to absorb since the labour force in tea plantations are much bigger than that of other plantations. Since the labour force is much higher in tea, the companies expect a productivity increase from the workers to meet the additional cost,” added Poliyadda.
Poliyadda further said that even the companies that have a mix of tea and rubber is finding it extremely difficult because there has been a sharp decrease in rubber prices in the market.
“The rubber prices at present have come down sharply by 50% compared to last year. The rubber prices have crashed like never before. With all these losses how can plantation companies still survive if the workers do not increase productivity? Although we gave a 20% wage increase the plantation companies do not get a better price for the produce and as a result find it extremely difficult to absorb the additional cost,” said Poliyadda.
According to Poliyadda, apart from the wage increase, the plantation companies have to contend with an increased gratuity payment bill as well, following the latest salary revision.