Yesterday (1 May), on this year’s May Day, the Government responded to long-drawn-out salary related issues raised by the country’s plantation sector workers. 

Issued by the Commissioner General of Labour H.K.K.A. Jayasundara, a gazette notification dated Tuesday (30 April) said that the minimum daily wage for workers employed in the tea and rubber growing and manufacturing trade has been increased to Rs. 1,700. According to President Ranil Wickremesinghe, who spoke about this move yesterday, this wage hike came into effect from yesterday. This decision comes in a context where the sector’s workers demand a minimum daily wage of Rs. 2,000, and the plantation companies maintain that blanket wage hikes that do not reflect productivity will cause the industry to collapse. 

Both employees and employers have raised concerns about wage-related issues in the plantation sector and also the nature of the interventions expected from the Government. While yesterday’s decision appears to be a worker friendly decision, it seems more like a temporary intervention that does not guarantee a fair wage for plantation sector workers and a justifiable expense for the plantation companies. These concerns are not irrational. A few years ago, in response to massive protests, the plantation sector workers’ daily wage was increased to Rs. 1,000. However, even today, plantation sector trade unions claim that it is not easy for an ordinary worker to obtain Rs. 1,000, which is considered the minimum wage, because of certain conditions imposed by employers. At the same time, plantation companies say that the further increase in the daily wage is not possible without an increase in productivity. In this context, it is evident that both interfering and not interfering to increase plantations sector wages in this manner have negative impacts. 

In such a context, instead of attractive May Day decisions, the Government should pay attention to long-term sustainable solutions. In other words, as some economists have pointed out during the peak of the economic crisis, what the Government should do is create an environment where businesses can pay a reasonable wage to their employees, not forcing businesses to give employees wage hikes or the Government itself paying employees.

This can be achieved by adopting and promoting policies, laws and international best practices that ensure fair and scientific wages for the sector's workers, instead of basing wages on various claims made by employees or employers. If there was a scientific wage-related system that depended on inflation, market conditions, income and expenses, the economy and other pertinent policies, neither employees nor employers would have to wait until the Government takes decisions for them. More importantly, until and unless the authorities create such an environment, the plantation sector will not reach international status despite being one of the key foreign income earners.

At the same time, this issue should not be viewed as a matter of daily wages. That is because, as has been observed historically, wages have long-lasting and far-reaching impacts on the plantation sector workers’ lives. The Rs. 1,700 daily wage includes the daily budgetary relief allowance, and more importantly, will be the base amount for the calculation of the Employees Provident Fund (EPF) and the Employees Trust Fund (ETF). In a context where plantation sector workers’ entitlement to job security and retirement benefits, as well as access to alternative job opportunities, are considerably low, the EPF and the ETF are of immense importance. Therefore, ensuring that the base salary for the EPF and the ETF is stable and is subject to improvement is crucial.

At the end of the day, merely increasing plantation sector workers wages with no sustainable plan to ensure the continuation and improvement of the same does not seem like a genuine effort to improve these workers’ lives. Wage is only their main, most visible issue. They are dealing with a number of other issues including those relating to housing and lands, access to services, and more importantly, dignity in the general society. A holistic, sustainable approach to improving their working conditions would improve not just their income, but also other issues that affect them as a community.