President Ranil Wickremesinghe has instructed the Minister of Labour and Foreign Employment, Manusha Nanayakkara to cancel the lease agreements of estates that fail to comply with the Government’s Gazette notification to increase the plantation workers’ wages to Rs 1,700.
The President has instructed to draft new laws regarding lease agreements. Minister Nanayakkara was told that these estates will not be reverted to Government control but will instead be leased to other companies under new agreements after the current leases are terminated.
Minister Nanayakkara said that many new companies had expressed an interest in leasing the estates whose agreements are cancelled by the Government. These estates will be leased to the most suitable companies.
He said that about 22 Government estates have been leased to the private sector and future agreements with the Government will be cancelled.
Minister Nanayakkara told the Sunday Observer that all estate employers must implement the wage increase to Rs 1,700 from this month. Estates that do not pay the minimum wage will be taken over by the Government and given to those who comply.
The minister said that small tea estate owners already pay more than the prescribed minimum wage. He acknowledged the challenges faced by regional estate companies that have been privatised. “Estate companies that do not implement the minimum wage will be handed over to the Government. The Basic Act has been drafted to ensure proper implementation, which has been approved by the Cabinet,” he said.
Minister Nanayakkara said that the minimum basic salary in small tea estates and tea factories is already more than Rs. 1,350, with some paying Rs. 1,700 or Rs. 2,000. Therefore, this wage increase should not be a problem for those who already comply. There has been an issue with the amount paid to the Employees’ Trust Fund (ETF) and Employees’ Provident Fund (EPF). In well-paying estates, contributions are based on the Rs. 1,350 basic salary. However, when Government estates are leased to the private sector, some lessees had cut down trees and engaged in other businesses instead of maintaining the estates properly. As a result, many workers have not been receiving proper wages.
The salary increase aims to address these issues and ensure fair compensation for workers. The Government also hopes to improve productivity in these estates. “We support measures to increase efficiency and profitability. Attention has been focused on estate managers who do not show proper profits and fail to pay workers adequately due to their inefficiency,” Nanayakkara added.
“Even after several rounds of negotiations with plantation employers and labour unions regarding labour wages, no agreement could be reached. As a result, we called the Wage Administrator Council under the Ministry’s powers. Despite official notifications, plantation employers did not attend the initial meetings.
Consequently, the authority was delegated to the Labour Commissioner General, who proposed a salary of Rs 1,700, consisting of a Rs 1,350 basic salary and a Rs 350 allowance. This was gazetted on April 30 and May 1, allowing 15 days for objections. No substantial objections were raised, leading us to confirm the gazette announcement officially,” the Minister said.
He said that despite these efforts, employers did not respond favourably, necessitating the Government’s decision to enforce the new salary structure.
The Government has decided to take over estates from inefficient managers and hand them over to capable administrators. This decision aligns with the President’s call for collective support to advance the country. Estate employers are urged to prioritise employee wages over profits during this critical period. “If managing estates proves challenging, the Government is prepared to reassign them to those who can manage effectively,” Nannyakkara added.
The Minister emphasised the importance of unity in moving the country forward, highlighting the leadership of President Ranil Wickremesinghe in rebuilding the nation. He expressed confidence in President Wickremesinghe’s success in the next presidential election, believing the country will continue its progress and never fall back.
“The implementation of the new wage structure will begin this month, with the Labour Department empowered to enforce compliance,” he added.
