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A Note on 'Tea Wages'

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  23 Aug 2015 12:00 AM GMT

By J N Dutta

Tea is one of the top agro-based Industry in India. The Tea Industry is the oldest and the best organized manufacturing sector. It is also the single largest employer in India where about one million permanent workers are engaged and out of which about fifty percent of the workers are female. Ironically, even though they are part of a vast organized sector, workers of tea estates remain one of the most margilized sectors of the society even today.

Wages of tea plantations workers are considered the lowest in the organized sector. The decision of the wage Board for Tea Plantations Industry in 1966 to take 1.5 units of consumption to determine the need based minimum wage instead of 3 units of consumption as agreed upon in the 15th Indian Labour Conference held in 1957 has resulted in such low wages for tea plantation workers. This is, in fact, lower than the stipulated wages in most of the unorganized sectors.

Daily wages of tea garden workers in Assam are determined through collective bargaining between the workers’ union and the representatives of the employers, in connivance with the State Government Conciliation Officer. Ironically, these wage negotiations are made basing on the existing wages whereas these should have been done after taking cognizance of the existing need based minimum wage.

The wage structure of tea garden permanent workers is in two parts, viz. the cash component part and the factors of fringe benefits such as food grains, dry tea, fuel etc. and the statutory welfare facilities in the forms of housing, medical, education, leave, sickness benefit, maternity benefit, P.F., bonus, gratuity etc. The major complaint is that the negotiated wage as the cash component is far less than the minimum wages notified by the State Government. The negotiated daily wage should be above the notified minimum wage.

It has been a long standing demand from various unions and forums to increase the daily wage upto a reasoble and decent rate that is above the minimum wage, and not merely the minimum wage notified by the State Government.

Some employers are of the opinion that implementation of some statutory provisions under the Plantation Labour Act (PLA) increases the cost of production of tea thus making the Industry nonviable, particularly in the context of realization of sale prices in the market, be it in the auctions or in private sales.

While the PLA and the Rules framed there under ensure protection of the living condition of the workers through various statutory provisions such as housing, health, education etc. cost of which, to the contrary, should not be deducted from the daily rate of wages arrived at through agreements. The Tea Industry maintains a reckoble workforce of temporary workers to whom most of these facilities are not extended. The Industry is now in transition and there is a need to see how rights and benefits could be extended to this class of workers.

When the Central Government has ected several Rights-based legislations and a host of flagship programs which entitles all citizens of the country to have food security, basic education, health services, housing, sanitation, social security etc., than why a section of tea garden workers remain bereft of such beneficial entitlements is questioble.

The wages of tea garden workers are decided through bipartite/tripartite agreements, hence settling for cash wages below the statutory minimum wage by way of deductions of the cost part of the statutory facilities provided by the Magement is considered unrealistic and illogical which needs reassessment. Wage payments need to be in monetary terms as the minimum wages cannot be provided in kind. Since the Central Government has no jurisdiction to dictate over the fixation of Minimum Wages which is a State affair, the State Government must play an effective role in ensuring that the minimum wage is guaranteed.

The Inter-Ministerial Committee constituted at the behest of the Parliamentary Standing Committee of Commerce to find solution to the problem of sharing the social cost due to higher cost of production and thinning of profit margins on account of higher labour wages and rise in input cost, recommended in its Report dated 9th August, 2012, the sharing of the social cost in the ratio of 10:40:50 (10% by the concerned State Government, 40% by the Central Government and 50% by the Plantations owners). This recommendation was re-examined by subsequent Committees and then by the I.I.P.M. which was entrusted with the study of the issue. It has been emphasized that all efforts should be made to adopt the formula of sharing the social cost so to uplift the working conditions of the workers and their families which has a direct bearing on the productivity of the worker. Since welfare of tea garden workers is paramount, onus lies on the owners of tea estates.

In this connection, it may be mentioned here that the State Government has already notified that VDA should be paid to the employees of different categories of industries payable from 1st April 2014. With the inclusion of the new rate of VDA, the monthly wages of different categories of workers are as follows :-


Categories of Workers Wages including VDA per month

(w.e.f. 01.09.2014 )

1. Unskilled Workers Rs. 4623.90

2. Semi Skilled/Unskilled Supervisory Rs. 5335.20

3. Skilled workers/Clerical works Rs. 7398.30


In the meantime, the Government of Assam with due consultation with the State Minimum Wages Advisory Board for the plantation workers has issued a Notification dated 29.07.2015 proposing to revise the minimum rates of wages for the ordiry daily rated plantation workers in tea estates in Assam. As per this proposed revised minimum wages daily wage rate in cash of a worker will be Rs.143.50. This rate, payable in cash, is inclusive of VDA but exclusive of :-


a) Foodstuff at concessiol rate Rs. 14.20

b) Dry tea to workers Rs. 2.16

c) Firewood compensation Rs. 5.74

d) Earned Leave Rs. 7.73

e) Festival holidays Rs. 3.86

Rs.,33.69 per day

The above amount of Rs.33.69 along with the minimum wage per day (in cash) of Rs.143.50 comes to a total of Rs.177.19 per day minimum wage in cash. The rate of wages so fixed includes the component of the wages for the rest days during the month. Further, the rates notified as above is exclusive of other fringe benefits being enjoyed by the workers and their dependants under the provisions of different laws, agreements, settlements or award of any court of law.

In the above referred Notification dated 29.07.2015, a period of sixty days, from the date of publication of the notification, has however been given to the aggrieved parties to raise or file any objections against the proposed enhancement in the rates of daily wages for the ordiry workers of tea plantations. According to the opinions of the barons of the Tea Industry the Industry is now in the threshold of dooms and if any further attempt to raise the daily wages of tea garden workers is made beyond the rates that have already been offered by the Industry, there will be no option left but to shutter down the business of running a tea estate. The present trend of realization of prices of tea in the auctions as well as in the open sales indicates the impending danger as realization of prices is at a very low ebb and the viability of the Industry is at a stake. Let us see whether the Industry swims together or sinks together!

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