Family Based Wage System deceives the Plantation Community

By Rev. Fr. S. Guy de Fontgalland

 Cont. from yesterday
Family Based System of Wage Determination

Unlike any other ‘organized’ industry, plantations consider family as the unit of the wage determination. At the beginning of the plantation industry, workers were settled in plantations as family units and not as individual workers. All members of the family – men, women and children – were made to work on the basis of differential wages. This is true till 1980s. With the abolition of the child labour and the reduction of labour force and also it is a universally recognized principle that wages must be determined by considering an employee as a unit and not the family as a unit. Stagnating Real Wages
Throughout history, the plantation companies resisted and delayed any recommendations by way of increasing emoluments of the workers. The tea and rubber plantations, being a labour industry, the planters resisted any suggestions of an increase wages as it may affect their profit margins. The real wages for the plantation workers has remained stagnant over the years. The money wage increases have not neutralized in the galloping consumer price index. The Employers Federation has decided the wage increment for the plantation sector of a 5 % of rupees 285 is equal to rupees 12 and cost of living allowance rupees 600divided by 30 is equal to rupees 20. That is, the workers have to work tirelessly for a pittance. If this is the pattern of thinking of the Employers Federation, this will invariably lead to a general strike in the plantation which was not there for the last three years. In the last agreement, the wages were increased by 30 %. This time the wage has to be increased by 50 %. The budget increment is for the public sector who have the monthly minimum wage of Rs.16 980/-.  They have a number of monthly holidays and also more than 40 statutory holidays. They are not daily wage earners depending on changes of the climate or works offered for a month. In real terms, in the year 2005, money valued at Rs.23 780/- is equal to Rs.40 000/- in the year 2010.

Wage Increase Related to Productivity

The management takes recourse to hackneyed worn-out principles of “capacity of the industry to pay”. The major inputs in the plantation industry – land and labour – are neither as abandoned nor as cheap as they were when the plantations were established more than 150 years ago by the British. Every time that there was a demand for increase of wages by the workers, the Planters Association refused to meet the demand and they relate wage increase to productivity. But, productivity does not only link with wages. Increase productivity is defined in the classical sense, that is, as obtaining more output for the same input. The fundamentals of economy remains that good productivity is the only way to prosperity. Improving the productivity of the capital by way of adding value to the product and the cost effectiveness of the capital expenditures is also to be seen as part of the productive approach. The factors affecting productivity in the plantation are manifold and include capital input, productivity – variety of  tea planted and the age of the bush, field maintenance of land under tea cultivation and  yield per hectare.

The workers productivity alone would not increase the production and this includes all the above. Tea is fast moving from commodity market to brand market. That is, differentiation of the products and branding is given highest priority in the export sector and also for local consumption. The branded tea is sold to the consumer at very high prices both locally and abroad. For example: one plantation group has come out with a Green Tea for local and foreign consumption; 50g of which is sold in Sri Lanka for Rs.135/-, accordingly a kg of this tea is sold locally for Rs.2700/-. Same thing will be sold abroad for about more than five times. Another innovator in the Sri Lankan tea market, has launched out green tea adding ‘Gotukola’.

A packet of 40g of this tea is sold locally for Rs.150/-, accordingly a kg of this tea is sold for Rs.3750/-. Like this, all the value added tea are sold for very high prices locally and abroad. Therefore, we can conclude without any hesitation that both tea and rubber are moving forward in the right direction. This will enable the Planters Association to pay a real wage without justifying the wage increase in the budget 2011. Therefore, the Employers’ Federation should determine to give more benefits to the workers in the agreement than taxing them. It is important that the workers who face the elections also should highlight their demands unanimously and vote for those who give guarantee to fulfil their demands.

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