Egg on the face

Egg on the face or the Emperor’s new clothes? Pick what you will. Both the president and his government has made a song and dance about a Rs. 1,700 daily wage for plantation workers with President Ranil Wickremesinghe announcing it on May Day at a Ceylon Workers Congress (CWC) rally at Kotagala. Shortly thereafter Labour Minister Manusha Nanayakkara gazetted the wage increase and the matter appeared all done and dusted. But voila! The country was last week treated to the revelation that the state-owned Janatha Estate Development Corporation (JEDB) and the State Plantation Corporation (SLSPC) are not paying the stipulated wages. The exception was Elkaduwa Plantations Ltd., also state owned, which is paying what they must in accordance with the government diktat.

Sad but true, the CWC which has for long been the country’s biggest trade union and a strong political force representing plantation workers of Indian origin has said nary a word about the failure of government in this regard. Whether Mr. Jeevan Thondaman, the union’s general secretary and a cabinet minister in President Wickremesinghe’s government, has raised this matter at the highest levels, we do not know. His cousin, Senthil Thondaman, is the Governor on the Eastern Province and is the leader of the CWC. He too has easy access to the powers that be. It is not only the JEDB and SLSPC that have not been paying the decreed higher wages. Several of the Regional Plantation Companies (RPCs) are also not paying them although a few do comply. So also private proprietary estates and smallholdings hiring labor.

Jeevan Thondaman made waves a few days ago when he and a group of supporters illegally threw their weight about at Pedro Estate, Nuwara Eliya, belonging to Kelani Valley Plantation PLC (KVPL), a Hayleys company. Acting like thugs, they assaulted a fellow employee and demanded the reinstatement of three workers suspended for creating disturbances over land preparation for planting coffee on unproductive tea land. They threatened arson against company property and held plantation executives hostage for several hours. One of them had to be hospitalized.

The Planters Association (PA), in a strongly worded statement, accused Thondaman of forcibly trespassing on the estate, blockading it, and illegally detaining plantation employees and executives against their will for a “harrowing four hours.” It further said these employees were surrounded by a drunk and unruly mob and were subjected to prolonged threats of bodily harm and arson if they did not accept the minister’s demand to immediately reinstate the three suspended workers. Thondaman, like all ministers, is provided with an armed security detail belonging to the Ministerial Security Division (MSD) of the police. There has been an unconfirmed report that the MSD, on orders from the top, withdrew and Thondaman had later apologized to Public Security Minister Tiran Alles for the incident.

Quite apart from not paying the government mandated daily wage to their workers, the state owned plantation companies are also guilty of not paying Employees Provident Fund (EPF) and Employees Trust Fund (ETF) dues for decades. Elkaduwa which is now paying the higher daily wage is bracketed alongside the SLSPC and JEDB in this regard. Massive arrears have built up and State Minister of Finance, Ranjith Siyambalapitiya recently went on record that cabinet had approved five billion rupees to be allocated to clear these dues. “This comprehensive settlement aims to rectify the financial neglect experienced by estate workers and their families,” he said. He added that some workers did not have money to by medicines and had died. There were some 2,000 cases filed over this matter. But he did not indicate whether the state-owned enterprises will be subject to the penalties normally imposed on EPF and ETF defaulters.

Employers falling back on these payments are liable to hefty penalties. While the ETF is solely an employer liability, both employers and employees contribute to the EPF with the employee contributions deducted from wages. The big question here is whether such payments have been deducted and not credited to the workers’ accounts as frequently happens in the case of such defaults. Penalty-wise, is it a case of sauce for the goose and not sauce for the gander?

The Court of Appeal last week denied an injunction sought by 21 Regional Plantation Companies seeking to suspend the implementation of the wage hike. An Additional Solicitor General submitted that the RPCs boycotted a Wages Board meeting convened to discuss the matter and the Labour Commissioner, exercising the powers assigned to the Labour Minister, had taken legal steps to increase wages. The matter remains not concluded as far as court action is concerned. The PA insists that it has no option but continue to resist what it calls a “sudden wage increase.”

It stresses that wages must be intrinsically linked to productivity to ensure sustainability of businesses and the livelihood of workers. Sri Lanka is already grappling with the highest production costs, wages and lowest productivity among all tea growing nations, the PA claimed. It said the newly gazetted wages, notably, is double that of India, creating significant cost disparities. Further, the unilateral increase affects not only the RPCs but also over 400 private tea factories. Whether politicians looking at a bloc of plantation votes at the forthcoming elections will be influenced by these arguments or whether they can be sustained in the courts remains to be seen. The government has already adopted a “pay up or get out” approach. Can it wave its fist at the RPCs when it does not itself pay the mandated wages and defaults on EPF and ETF obligations? Also can it take back the estates and run them viably or find alternate investors? The country has already burnt its fingers by nationalizing the estates.