COLOMBO, Sri Lanka
Tea workers received a 25 percent pay increase last week to $4.70 per day.
Seven unions, representing more than 250,000 plantation workers, sought higher daily minimum to meet rising living expenses but settled following lengthy negotiations, according to Kanishka Weerasinghe, deputy director general of the Employers Federation of Ceylon.
The two-year wage agreement is retroactive to March 31 when the previous agreement expired. The Employers Federation represents 22 regional plantation companies. Wages account for about 60 percent of the production cost of Sri Lanka tea. Wages in India, by comparison are about 50-55 percent of production costs. Wages in Africa are significantly less. Sri Lanka has the highest production costs among the big tea producers.
Tea output has been exceptional this year and is expected to exceed last year’s 329,400 metric tons, according to Sri Lanka Tea Board estimates. The 2011 crop is expected to bring $1.5 billion despite unrest in Middle East and North African markets. Last year’s crop was valued at $1.4 billion, the majority of which comes from exports.
In addition to the day wage, an attendance bonus for workers was increased from Rs. 90 to Rs. 105 (95-cents) and a bonus for exceeding productivity targets was increased from Rs. 12 per kilo to Rs. 17 (15-cents). Workers in a 26-day period are expected to pluck up to 40 pounds (18 kilograms) of leaves a day, the equivalent of 10 pounds of processed tea.
Negotiations continue on social welfare issues such as maternity benefits, temple time off and death benefits for workers.