Rupees 1000 – Is It Such An Insurmountable Barrier ?

By Vijaya Kumar –

Professor Vijaya Kumar

Politicians on both sides of the aisle, the print and electronic media and most of our population are sympathetic to the demand of plantation workers for a reasonable wage. It is only the Planters Association and the Regional Plantation Companies that have turned a deaf ear to these demands.

Workers are today paid Rs. 750 per day which is less than what they were paid ten years ago when adjusted for inflation as the cost of living has increased by over 50% since then. It has been shown that an estate household has an average of 4.4 persons of whom an average of 1.7 are employed in the estate. At Rs. 750 per day, an estate household would earn Rs. 1,275, the equivalent of Rs. 290 per member of the household. A per-capita income of less than US Dollars 2 per day is identified by the United Nations as extreme poverty. Our big companies should be holding their heads in shame since the wages they pay ensure estate households get much less, the equivalent of US $ 1.57 per person per day, so that their workers and families are well below the extreme poverty level.

The employers themselves realise their vulnerability on wages as they consistently add statutory employer contribution to EPF and ETF in a bizarre attempt to inflate plantation worker wages, go to extraordinary lengths to claim benefits provided by the government as part of their total package to improve worker standards and relying on statistics for the whole Nuwara Eliya district to counter charges of increased poverty levels in the estates on the basis that the district is mainly populated by plantation workers.

Plantation Management while taking pains to flaunt their degrees in management appear to believe in only two principles of management – minimizing workers’ wages as the easiest route to bigger profits and keeping worker pay at subsistence levels to prevent prolonged strike action. This strategy has been helped by the fact they are dealing with a minority group with a long history of being oppressed.

As Lakshman Kiriella pointed out, the companies earn inordinate profits although they always claim to be making losses especially when wage negotiations are due. Their Annual reports show how closely holding companies are involved with the accounts and internal dealings of their plantation companies. As most of the transactions of plantation companies involve related companies within the group where market rates do not come into play, profits can easily be shown elsewhere. The lack of credibility of plantation management became exposed when soon after maintaining during the 2016 wage negotiations that they would hand back the estates if forced to raise wages, they fought tooth and nail against a budget proposal of Finance Minister Ravi Karunanayake’s that would restrict holdings of regional plantation companies to 5000 hectares.

The plantation companies are trying go back to something like bonded labour through their so-called outgrower’s system, promoted with outlandish claims of providing high incomes, which so far appears to be a means of handing over their less productive lands to workers, who are deprived of their employee status and retirement benefits and paid on a green leaf basis. A proper outgrower’s system should provide the outgrower with security of tenure through ownership or lease and give him or her a choice in deciding on the parcel of land to be taken over.  

The employers in their negotiations with trade unions will true to form make every effort to undermine the Rajapaksa budget proposal by demanding in return their pound of flesh by way of contrived allowances and aggressive conditions which leave the worker with less than the promised Rs 1000 and worse working conditions. The government should insist on a flat Rs 1000 wage or as promised change the management companies which are unable to make the payment.