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Tea companies may go for layoffs

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  2 Aug 2015 12:00 AM GMT

1.5 lakh temporary workers likely to bear the brunt, winter wages could stop as well


DAILY WAGES

What the industry is giving currently

Cash - Rs 115

Additiol compensation Rs 6

Concessiol foodgrains - Rs 14.20

Firewood - Rs 5.74

Tea - Rs 3.66

Medical facilities - Rs 16.75

Housing - Rs 13.07

Education facilities - Rs 2.83

Welfare facilities - Rs 5.60

Leave/ festival holiday - Rs 12.77

Bonus - Rs 26.75

PF - Rs 17.76

Gratuity - Rs 8.95

TOTAL - Rs 249.08

What the Government has

proposed

Cash - Rs 143.50

Concessiol foodgrain - Rs 14.20

Tea - Rs 2.16

Firewood - Rs 5.74

Earned leave - Rs 7.73

Festival holidays - Rs 3.86

TOTAL - Rs 177.19


By Our Staff Reporter

Guwahati, Aug 1: Grappling to cope with the burden of increasing cost of production and staring at a steep wage hike that the State government has proposed for tea workers, the tea industry is contemplating on a slew of "survival" measures that also include laying off temporary workers and stopping winter wages paid during the lean months.

"Given the present scerio that has raised several challenges for the tea industry, we will be left with no option but to go for such drastic steps. In fact, some companies are talking about measures like layoffs and stopping of winter wages," said a top industry source.

There are 5.5 lakh permanent tea workers and another 1.5 lakh temporary workers. In case the companies go for a layoff, the temporary workers may be the first to bear the brunt.

As on date, the source argued, a tea worker, besides the daily wage of Rs 115, is getting non-statutory and statutory benefits up to Rs 134.08. "It all adds up to a worker getting total daily wage of Rs 249.08," said the source, citing a study by an independent auditor.

The teas industry is worried that if the State government implements the new proposal to hike cash wages to Rs 143.50, it will put an additiol burden on the companies as the total daily wages will rise to around Rs 290.

"Already bearing the brunt of increasing cost of production, low yield, decreasing exports and discouraging auction prices, the tea industry will not be able take the burden of such an abnormal increase in cash wage which would have a far reaching consequence on the sustaibility of the industry," said the source.

Labour constitutes around 60 per cent of the total cost of production. Eighty per cent of the total costs are fixed in ture with little scope for reduction.

The industry has been receiving power at a level of 30 to 50 per cent of the requirement, compelling dependence on self generation at high cost. "In fact, many tea estates have been forced to cut costs by postponing modernization plans and replacement of old bushes, putting at risk their long-term viability," the source added.

While the current cost of product is around Rs 170 per kg, average prices at the tea auction are hovering around the Rs 156 mark.

Adverse weather has also affected yield in the first quarter of this year, with production showing a decline of around 4.4 million kgs. Auction prices have dropped by around Rs 6 as compared to the corresponding period in the previous year.

Notwithstanding opposition from the industry, the Assam government has proposed to hike minimum wages of tea workers to Rs 143.50.

Earlier, the Consultative Committee of Planters Association (CCPA) and Assam Chah Majdoor Sangha (ACMS) had on February 26 inked a bilateral agreement, effecting a hike in the wages of daily labourers in tea gardens. According to the three-year agreement, the wages with effect from January 1 this year will be Rs 115. It will be raised to Rs 126 with effect from January 1 next year and then to Rs 137 in the third year. The wages as per the previous agreement was Rs 94.

The State government, however, did not ratify the agreement this time though it had been traditiolly endorsing the wages negotiated between the companies and workers union in the past. Instead, it formed the minimum wages board.


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