RPCs submit radical new proposal aimed at transforming earnings in the plantation sector

Taking a cue from the success of the smallholder sector, Sri Lanka’s Regional Plantation Companies (RPCs) handed over fresh proposals aimed at radically expanding worker earnings during a recently concluded meeting with the Minister of Labour and Trade Unions leaders.

The newly introduced proposal provides for a hybrid between the colonial-era, daily wage model and the productivity-linked, earning systems implemented with great success in the smallholder sector. Adding a productivity based component will ensure that worker earnings are expanded, and workers have more flexibility and control over their monthly earnings.

Under the new proposals, RPCs will continue to offer a fixed daily wage but with the re-introduction of attendance and productivity incentives, and the price share supplement. In a notable departure from previous years, the RPCs have proposed that this daily wage model will only be practiced 3 days of the week. Thereafter, RPCS proposed a collaborative arrangement with the employees for the remaining working days to move towards one of two productivity linked earning models where workers are remunerated based on their output.

The first alternative under the productivity-linked proposal is a system where workers are paid Rs. 50 for every kilo of green tea leaf plucked (inclusive of EPF/ETF). Where a high plucking average of between 30-40kgs a day is attained (over and above the existing norm), workers have the potential of expanding their earnings exponentially. In the case of the Rs. 50 rate, a worker who plucks 20 kg will receive Rs. 1,000 per day, and monthly pay of Rs. 25,000. Current annual plucking averages among RPC companies are between 20-22kgs a day. However, a majority of the best harvesters have plucking averages between 30-40kgs, this means that earnings can now be expanded to over Rs. 37,500-62,000 per month.

The next alternative is that workers are enumerated based on a share of the National Sales Average (NSA) ratio of 35%.

Furthermore, under the new daily-wage component of the proposal, workers will now be paid a total Rs. 1,025 for a day’s work. The breakdown is as follows: Basic Wage – Rs. 700, EPF/ETF – Rs. 105, Attendance Incentive – Rs. 70, Production Incentive – Rs. 75 and Price Share Supplement – Rs. 75. If workers are to be compensated purely on this model, they will see an increase in their monthly earnings by Rs. 4,250, amounting to a minimum guaranteed monthly earning of Rs. 25,626 if they meet the 16kg plucking norm. If workers exceed the plucking norm, they will receive a higher compensation.

In pilot projects conducted on RPC estates and according to studies conducted by the Tea Research Institute, such productivity-linked models have been proven time and again to tremendously increase worker productivity and earnings.

The RPC proposal also calls for discretion to be given to companies to choose between the implementation of either model, depending on what their workers prefer, their pre-existing agreements with workers, and the suitability of a given system to the individual requirements of each company.

“We urge all stakeholders to carefully consider the extremely valuable benefits that our proposals offer. We must move away from models that were suited for colonial times and look instead to a future where workers can become empowered entrepreneurs. If we are allowed to implement productivity models, we are also able to introduce flexi-hours, and labour mobility. Teams of workers can be assigned to specific blocks – just like in the smallholder sector whose success on productivity is indisputable. We can finally give our workers a say in when and how they work, and drastically improve their earnings in the process,” Planters’ Association of Ceylon Chairman, Bhathiya Bulumulla asserted.