Cabinet decision sought to overcome plantation sector wage stalemate

Labour Minister Nimal Siripala de Silva and officials in negotiations with plantation sector trade unions and RPCs

• Trade unions and RPCs fail to reach Collective Agreement on wage increase 
• Govt. says committed to deliver on its Rs.1, 000 daily wage promise 
• Labour Minister to submit alternative proposal to Cabinet to compel RPCs to pay Rs.1, 000

Amid continuous opposition from the Regional Plantation Companies (RPCs) to implement the proposed Rs.1, 000 daily wage for plantation workers, Labour Minister Nimal Siripala de Silva is expected to present a proposal to the Cabinet of Ministers today compelling the RPCs to grant the wage increase.

Negotiations were held last week between plantation sector trade unions and RPCs, represented by the Employers’ Federation of Ceylon (EFC), with the participation of the Labour Minister and other officials. However, the negotiations failed to reach consensus in order to enter into a Collective Agreement.

“As the Minister of Labour, it’s my duty to ensure the implementation of the government’s policy and proposals. Therefore, I will be informing the Cabinet of Ministers the outcome of these discussions and will be proposing an alternative way in which we can compel the employers to pay this wage increase,” Minister de Silva said in a statement issued by the Labour Ministry. 
In Budget 2021, the government proposed to increase daily wages of plantation workers up to Rs.1, 000 from the current Rs.750.

However, Minister de Silva didn’t specify the alternative method that’s being proposed to force RPCs to implement the wage increase.  

The government has warned that it wouldn’t hesitate to alter the management agreements with the RPCs, which fail to increase the proposed daily wage of plantation workers to Rs.1, 000.

Biennially, the RPCs and plantation sector trade unions enter into a new Collective Agreement following negotiations. The last Collective Agreement was signed in January 2019. 

However, Minister de Silva hinted that it might change this time around. “In the past, a Collective Agreement was signed between the EFC and trade unions most of the time. But as of now, there’s no consensus, hence we are not in a position to reach an agreement and enter into a Collective Agreement,” he said.

According to the Labour Ministry statement, EFC had insisted that RPCs were not in a position to grant the Rs.1, 000 daily wage demanded by the trade unions due to severe drain on the sustainability of the companies, if it was granted. 

“They (RPCs) say there’s a gap of Rs.80 and they cannot afford to pay that amount and if it’s given, their industry will collapse. However, the point of view of the trade unions is that the employers are able to pay this amount and that must be paid,” Minister de Silva noted.

The RPCs have been proposing a productivity-based wage model to increase the wages and to enhance the output, which is not welcomed by the trade unions.

While expressing the determination to implement the proposed wage hike for plantation workers, Minister de Silva stressed that the government has facilitated number of opportunities for both parties to reach a consensus.

“I am hopeful after the next Cabinet meeting, we will be able to implement the pledge given by the government,” he said.