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Govt to take stern action against RPCs failing to pay wage hike for workers

By: Staff Writer

May 28, Colombo (LNW): The Government has issued a new gazette on 21 May, mandating an increase in the wages of plantation workers consequent to President Ranil Wickremasighe’s directive to cancel the lease agreements of state-owned estates, land, and property leased to plantation companies and private firms if they fail to pay Rs. 1,700 per estate worker.   

Even 30 years after privatization of 24 regional plantation companies, the plantation industry says companies cannot bear the cost of unprecedented 70% wages hike for workers toiling hard to maintain the plantations.

They raised its strongest possible objections to the Government’s arbitrary, reckless, unilateral decision to drastically hike minimum wages for tea and rubber sector workers.

Issuing a statement the Planters’ Association of Ceylon stated that this current effort to force such a clearly unsustainable mandatory minimum wage on tea and rubber smallholders and the Regional Plantation Companies (RPCS) is impossible for the industry to absorb, even with radical cuts to basic operational necessities.

The continuity of the entire plantation sector is now at risk, and most critically the livelihoods of the very workers and communities who are connected to the industry across Sri Lanka, leading members of the association said.

The Private sector management of RPC’s failure to make the plantation industry profitable even after 30 years of their administration clearly indicates that something was wrong somewhere, several senior officials of the finance ministry said.

Planters association’s blame of handing over loss making plantations 30 years ago cannot be justified and they should explain the reasons behind the failure to improve the productivity of the industry, they added.    

The Finance Ministry will form a committee to investigate the issue. The committee will assess whether these companies’ financial difficulties stem from external factors or internal management problems, state minister of finance Ranjith Siyambalapitiya said.

According to the gazette, the basic salary of plantation workers will rise to Rs. 1,350 per day, effective immediately. This increment includes a total increase of Rs. 1,700, incorporating a Rs. 350 special allowance.

Siyambalapitiya highlighted that around 24 Regional Plantation Companies (RPCs) currently lease Government-owned plantation land.

He warned that if any company claims inability to pay the increased wages, the Finance Ministry will form a committee to investigate the issue.

The State Minister emphasised that companies failing to meet the new wage standards due to internal inefficiencies risk losing their leases. He also stated that the Government is prepared to terminate tax agreements with non-compliant companies and seek new investors for the estates.

These new investors will be selected through a competitive process, focusing on their capability to manage export-oriented operations, ensure employee welfare, enhance infrastructure, and incorporate new technologies. Siyambalapitiya assured that the Government is committed to improving the living standards of plantation workers. He stressed that the new lease agreements would prioritise investors who demonstrate a strong commitment to these principles.

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