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The plantation wages issue has taken an interesting turn. Not only the trade unions, non government organisations, general public even the ordinary plantation workers show much interest and express their views on the matter openly. But on the other hand the prolonging of the talks for more than two months has caused frustration among plantation workers, and the issue has become a tussle of prestige among the plantation leadership.

In the meantime the Employer's Federation has said that they could offer only 142 (121 as basic salary and 21 as other allowances). The Federation has stated that if they were to increase wages even up to Rs. 142 they would run at a loss. This contradicts the common sense of the Federation. If one carefully reviews the large increase of revenue brought about after privatisation of the plantations it should be seen that paying Rs. 200 as daily wages is quite feasible and reasonable.

Taxes

Before privatisation the plantation sector was one of the biggest taxpayer to the Government. On 21st December 1992 the value added tax and the export duties were removed for this sector. In the year 1990 the Government have earned as much as Rs. 1536.1 million from tea and Rs. 747 million from rubber totalling to Rs. 2283.1 million in respect of these taxes. If these taxes were not removed the Government would have earned 5 billion rupees, in the year 2002. But due to concessions given to the companies these taxes were not paid to the Government.

At present only the "Cess" tax is levied for tea. On 8.5.1998 the Cess tax on Rubber was removed. In the year 1997 the Government earned Rs. 344.4 million from Rubber as on this account. If this tax was continued to be paid the Government would have earned Rs. 500 million, in the year 2002. Since all these taxes have been removed. The above stated amounts have remained as profit with the companies.

These companies are exempted from the payment of GST - NSL tax even the Value Added Tax payable under the budget 2002 in recoverable in 3 months. In these circumstances of most favourable tax exemptions that has continued for the last 10 years there can be no reason why these companies cannot allocated Rs. 5 billion for the extra wages at the rate of Rs. 200 per month. It is also to be noted that in the year 2000 the tea sold at Colombo Auctions reached Rs. 50 billion.

The number of persons retrenched after privatisation was 194,000. This includes workers and staff. The number of working factories have also been reduced. But on the other hand the production has increased. For example the production has increased to 308.8 million kilos in the year 2000 as against 178.9 million kilos in 1992. Further the 7 billion rupees payable as wages to the retrenched workers numbering to 194,000 has been saved by the companies. If one calculates the EPF and ETF payments payable to these retrenched workers a further one billion has been saved. Accordingly in this particular period along the companies have saved as much as 8 billion on this account, and added to their profits.

Management fees

Before privatization Rs. 3.50 was charged as management fees per kilo of tea. But after privatisation this amount was raised to maximum of Rs. 37.50, and this amount is added to the cost of production. In the year 2000 one company has received Rs. 98.8 million as management fees while another company has received Rs. 70.9 million and still another company Rs. 27.3 million. If the 21 companies reduce these irrational management charges the production cost could be brought down considerably. Further it has to be noted that these management agents are none other than affiliated companies. The managing companies are on the other hand major share holders of the plantations. In this back drop of the management charges are rationalised the wage hike will not make an adverse impact on the profits of the companies.

In the pay slips issued to the workers the number of days work offered is not mentioned. Therefore it would be difficult for the workers to calculate the amount payable as incentive payment. The amounts deducted from the pay slip as name card and other charges for preparing the pay slips etc are added to the profit of the company in an amount of around Rs. 10 per worker per month, by means of not affixing stamps and inflating the charges.

Additional income

The plantation sector companies earn not only by the production of tea and rubber but also through other sources such as timber felling, crop diversification and sub leasing of lands etc. But these amounts are not taken into consideration in reflecting the profit or in working out the wage hike. In the tea auction in the year 1991 Rs. 19,797 million was earned while this amount increased to 50,988.7 million in the year 2000.

The companies have agreed to raise the wages of the workers by 11% annually according to their annual reports. If the wages of the workers were increased in a regular manner on this basis then the difficulty in spending a large amount on the wage hike in the present instance would not have arisen. According to available information the companies were prepared to pay Rs. 135 at the time of the collective agreement signed in year 2000 but the plantation trade unions were not able to substantiate their demand.

If Rs. 60 is to be increased to the present daily wage the amount needed would be 4.7 billion (260,000 workers x 60 x 25 days x 12 months). Which amount could be easily met on the basis of the figures stated above.

The Minister of labour speaking at a function in Hatton on 4.5.2002 stated that he and the Prime Minister are aware that it would difficult for the plantation workers to live with the wages they receive now. But although everyone is aware that this is the plight of the plantation workers no concrete action is being taken to rectify the situation.

If the plantation companies do not come forward to change the situation the plantation workers would be plunged into worse poverty level in the future. The position taken up by companies regarding cost of production and expenditure items require verification and transparency in the interests of all shareholders including the government treasury and the workers. This can be realised by setting up a Regulatory Authority.

The Rs. 142 hike proposed by the companies is not acceptable at all because in real terms the wages would remain the same.

On the basis of the facts stated above the following recommendations are made.

1. Rs. 200 would be the reasonable daily wage and is an amount the companies could well afford to pay, in view of what has been set out above,

2. Or Rs. 121 should be paid as basic salary with a cost of living allowance of Rs. 3.50 per every point of increase in cost of living index be paid. (the least amount of cost of living allowance paid in the private sector is Rs. 3.50)

3. The wages paid for extra kilos of harvest and for cash plucking (Tea) should be increased to Rs. 10 per kilo as the present rates of Rs. 3.75 to 5.50 is grossly inadequate.

(The source of the statics given are as follows - plantations pocket book of statistics, Tea Trade 2000; Central Bank Report 2000; Annual Reports of Companies)

Fr. Guy de Fongaland ,Workers Development , Society Bandarawela

Vasudeva Nanayakkara (United Estate Workers Union)

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