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RPCs put the ball in trade unions’court

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Rs. 1,000 minimum daily wage demand

During a meeting last Friday between Minster of Labour Nimal Siripala de Silva and Chairmen of all Sri Lankan Regional Plantation Companies (RPCs), a final proposal was submitted towards ensuring a ‘sustainable’ earnings model for tea estate workers, making it the trade unions’ responsibility to take the next action on the long-standing pain point of the industry.

This proposal takes into consideration the sustainability of both the industry and livelihoods of plantation workers, RPCs said.

“After a very productive meeting with the minister, RPCs have arrived at a final consensus on what we can sustainably offer, while providing the highest possible earnings potential for our workers. Our final offer amounts to a 30% increase in earnings on the fixed model, and there is no upper limit to what workers can earn under the productivity-linked components. This is the first step to modernising our entire industry, and moving beyond a basic daily wage system which is a relic of the colonial era and long overdue for an update,” they said.

“We have gone well beyond the Rs. 1,000 daily wage demand of Trade Unions, and this follows a 40% increase from just two years ago. At a time when others in the apparel and leisure sector are slashing wages and retrenching workers, ours is one of the precious few export industries which has shielded our employees from the negative impacts of the pandemic, and is actively pursuing a wage increase. This is no easy feat, and without improvements in productivity, it will still be extremely difficult for any RPC to remain financially sustainable. There is clear understanding from the government on our position, and it is now up to Trade Unions to make the right decision,” Chairman, Plantation Services Group, Employers’ Federation of Ceylon said.

Under the final proposal, RPCs are offering a fixed daily wage of Rs. 1,105, with the re-introduction of attendance and productivity incentives – a feature which Trade Unions had strongly and consistently opposed in the past, but have since reversed their position in the most recent negotiations.

The breakdown is as follows: Basic Wage – Rs. 700, EPF/ETF – Rs. 105, Attendance Incentive – Rs. 150 and Productivity Incentive – Rs. 150. Under the new proposal, workers will receive a substantial Rs. 6,250 increase to their monthly earnings.

Further to the revised daily wage model, RPCs also propose the implementation of productivity-linked earning components to ensure that workers are finally provided effective incentives and are rewarded for increasing their productivity.

The proposed fixed daily wage model will be implemented 3 days a week, and on the remaining days, RPCs have called for one of two productivity-based models to be implemented based on how suitable they would be to each RPC’s unique capacity – enabling workers to earn far more than the fixed Rs. 1,105.

Under the productivity-linked component, employees can earn Rs. 50 (inclusive of EPF/ETF) for every kilo of tea leaf plucked. In the case of Rubber, this would amount to Rs. 125 (inclusive of EPF/ETF) for every kilo of rubber latex.

Alternatively, employees will be remunerated based on a revenue share model, offering greater earnings, similar to what has long been practiced with success in the smallholder sector in Sri Lanka. Companies who do not wish to continue with either of these models, will reserve the right (at their sole discretion), to continue with the standard daily wage system.

Currently, the Cost of Production (COP) of tea amounts to Rs. 615 a day, higher than any other tea producing nation in the world. Out of this, cost of labour accounts for 63% of the total cost of production. With the proposed increase in daily earnings to Rs. 1,105, the COP will increase up to Rs. 730 a day. Unfortunately, increasing cost of production is expected to be met with stagnant prices in local and international markets, further annihilating the economic viability of the industry.

Previously, the auction price of RPC tea reached an all-time high of Rs. 601 per kg on average (USD 3.99) in 2017 and has since plunged to Rs. 581/kg (USD 3.16). However, Sri Lanka’s global market price for tea has become increasingly uncompetitive, especially in comparison to USD 1.94 for tea at the Mombasa auction in Kenya. Competitors like Kenya have seen a significant increase – as much as 50% – in crop output which has resulted in an oversupply in the global tea market, forcing the market price of tea to reduce further.



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HNB partners with Gammadda to develop Yaya 6 village in Anuradhapura

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HNB PLC recently signed a Memorandum of Understanding with The Capital Maharaja Group’s initiative Gammadda Sri Lanka, the country’s largest rural development movement to develop infrastructure facilities of the Yaya 6 village Mahawilachchiya, in the Anuradhapura District.

The project is powered by HNB’s exclusive private banking proposition, The Club HNB, with the goal of engaging members and in opportunities for focused, impactful philanthropy.

A special event was hosted at The Club HNB premises on Greenpath which was attended by special guests from Yaya 6, Gammadda News 1st team and exclusive invitees of The Club HNB, during which HNB Managing Director/ CEO Jonathan Alles and Capital Maharaja Group Director Chevaan Daniel inaugurated the partnership with the signing of a Memorandum of Understanding.

“Rural communities form the backbone of this nation, therefore, HNB is proud to partner with the Capital Maharaja Group to support their ambitious and vital work under the Gammadda initiative. We are also grateful to The Club HNB membership and our branch network for once again stepping forward and contributing generously towards the upliftment of rural communities across Sri Lanka,” Alles said.

Providing access to clean drinking water is the 1st step in the agenda and a RO plant will be installed under the first phase of the development project. This will not only save lives but also prevent Chronic Kidney Disease (CKDu) prevalent in the region.

A new fully furnished library and computer lab will be just two other infrastructural additions to the village school Saliyamala Vidyalaya Pemaduwa, in addition to new washrooms which are to be constructed for the students and staff members. The project also entails renovation and refurbishment of the main road, the village temple, cleaning of the agrarian tank and construction of a new community hall under the initiative.

“It has been amazing working with HNB to achieve our mutual goal of providing Yaya 6 with much-needed infrastructure facilities. This project would not have been possible if not for the HNB customers, who came forward with their generous contributions to help this village in need. Therefore, I would like to take this opportunity to thank everyone of you who made this possible,” Capital Maharaja Group Director Chevaan Daniel said.

Notably, acclaimed Sri Lankan pianist and music director Soundarie David’s composition of ‘Stand up and be the change’, that was created to help raise funds and create awareness about the project was performed at the event by Soul Sounds with music provided by Ranga Dasanayake at the event.

Editor-in-chief and founder of ARTRA magazine Azara Jaleel, who was also present at the event, auctioned off a painting from the ARTRA Canvas collection to The Club HNB members in aid of the project.

“I am happy to be here today, where two great institutions have come together for this great cause. We are fortunate as customers to be able to contribute in any way possible, and we hope to join you in visiting Yaya 6 soon,” a valued Club customer,Mrs Niloo Jayatilleke said.

Those who wish to make a contribution to the initiative can make a payment via HNB SOLO, through a direct payment on the payment app or deposit funds to the account titled ‘We are the change’, account number: 005010173025.

With 252 customer centres across the country, HNB is one of Sri Lanka’s largest, most technologically innovative banks, having won local and global recognition for its efforts to drive forward a new paradigm in digital banking. Over the recent past, the bank was ranked among the World Top 1,000 Banks list compiled by the prestigious UK-based Banker Magazine. HNB has a national rating of AA- (lka) by Fitch Ratings (Lanka) Ltd.

HNB was also declared Best Sub-Custodian Bank in Sri Lanka at the Global Finance Awards 2020, in addition to winning the coveted Best Retail Bank in Sri Lanka Award for the 11th time at the Asian Banker Awards 2020, in recognition of its sustainable growth and continuous improvements in processes, products and services amidst a challenging macroeconomic environment.

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The Finance Houses Association announces revision of Self-Regulation Code

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The Finance Houses Association of Sri Lanka (FHA) the apex body of all Registered Finance companies has announced the introduction of its revised Self-Regulation Code which has been voluntarily practised by member companies over a long period of time, but has to be adapted to changing times.

The timely revisions to the Code were effected with a view to maintaining the highest standards on strategic and business operations in Sri Lanka’s Non-Banking Financial and Leasing Institutions (NBFI) sector.

The FHA collective of 39 Licensed Finance Companies (LFCs) is the driver of financial inclusion of Sri Lanka’s MSME sector which has a large footprint in the Bottom of the Pyramid segment of the country. The MSME sector is no less than the backbone of Sri Lankan economy involving over 70% of businesses in Sri Lanka, providing employment for 45% of the labor force and generating 52% of GDP.

Titled “Code of Conduct of Licensed Finance Companies Sri Lanka” the updated instrument was handed over to the Governor of Central Bank of Sri Lanka Prof. W. D. Lakshman and Bank’s officials by FHA Council members on March 18 at the Central Bank premises.

Niroshan Udage, chairman of FHA elaborated: “FHA’s time tested gentlemen’s agreement that was codified some time ago needed revisions and updates as per the requirements of today’s changing times. The overall objectives of updating the Code were to comply to all current regulatory and legal requirements while adhering to industry best practices. We take humble pride in the fact that the Code was not imposed on our sector by any authority but was self-introduced by all FHA members on their own will, which demonstrates the members’ strong commitment to sectoral integrity and their social responsibility.”

On March 18 members of FHA also handed over their Sustainability Mandate to the Governor of Central Bank Prof. W. D. Lakshman and top officials of the Bank. “The purpose of the Sustainability Mandate is to serve as the guideline for the LFCs to integrate sustainability principles holistically into their businesses, enabling sustainable value creation through their own financing approaches, in line with defined sustainability guidelines that would ultimately contribute towards national sustainability agenda and UN Sustainable Development Goals” said chairman Niroshan Udage.

 

 

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‘CSE to bounce back, provided Corona-19 is held in check’

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By Hiran H.Senewiratne 

The CSE was, once again, somewhat sluggish yesterday on account of investor fears over a possible Covid-19 third wave, but the expectation in some sections that May corporate earnings will be exceptionally good had an uplifting impact on the market during the latter part of the day. The CSE could be expected to bounce back, top stock market analysts said.

” CSE will bounce back within the next few weeks if the Covid 19 new wave  does not impact  the global scenario, Head of Sales, Softlogic Stockbrokers (Pvt) Ltd. Eardley Kern  told ‘The Island Financial Review’.

He said that the upcoming quarterly corporate earnings will likely be among the best in recent times and this would enable the market to perform in a positive way.     

Windforce Ltd., the renewable energy firm, began trading above its price of Rs. 16 per share yesterday after raising Rs. 3.2 billion for wind power projects in Sri Lanka and Senegal. It contributed more than 28 percent to market turnover from its IPO, Kern said 

Windforce stocks fetched Rs. 17.90 initially  and rose to as much as Rs. 19.00 in intra-day trading, after being heavily oversubscribed, but settled at Rs. 18, which was an increase of Rs. 2.40 or 15 percent.

Amid those developments, both indices moved downwards. All Share Price Index declined by 105.53 points  and S and P SL20 went down by 47.08 points. Turnover stood at Rs. 2.61 billion with two crossings. Those crossings were reported in Windforce, which crossed 7.2 million shares to the tune of Rs. 131.6 million; its shares traded at Rs. 18.50 and Sampath Bank 400,000 shares crossed for Rs. 20.4 million; its shares fetching Rs. 51.

In the retail market, five main contributors to the turnover were, Windforce Rs. 738 million (40.3 million shares traded), Browns Investments Rs. 281.5 million (44.6 million shares traded), Dipped Products Rs. 195 million (3.4 million shares traded), Piramal Glass Rs. 126.4 million (11 million shares traded) and Hayleys Rs. 113 million (1.5 million shares traded). During the day 139.3 million share volumes changed hands in 19927 transactions.  

  “The indices exhibited significant volatility during the early hours of trading and witnessed a continuous downwards movement during the whole session but Windforce gave some notable impetus to the market yesterday, analysts said.

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