FAIR TRADE PRACTICES ON TEA ESTATES IN SRI LANKA
by Lalith Guy Paranavitana – President and Founder of Empire Tea Services LLC, USA. www.empiretea.com
tea industry in Sri Lanka was started by the British Planters nearly
150 years ago. The first commercial tea estate (Loolcandura) was
planted by James Taylor in 1867. The British pioneer planters were a
law unto themselves, but were also benevolent owner/operators because
their success depended on the work force. During these times there were
no organized unions to protect the rights of workers, but the planters
had a fairly satisfactory system in place, governed by the Planters
Association. Workers lived on the estate and were provided housing,
water service, medical facilities, child care and even an elementary
school for their children. The cost of these social programs was built
into the cost of production. Dry rations were distributed through a
store on the estate and the cost deducted from the wages. The workers
were pretty much dependent on the estate
management and vice versa.
In about the early '50s trade unions started recruiting estate workers
and formed several estate worker's trade unions. Initially the British
owned tea companies opposed them, but the laws in the country were such
that they were compelled to recognize them. The unions grew very strong
and there was much agitation and clashes with management over several
major issues like wages, living conditions, work norms, social issues,
British government gave independence in 1949 to Sri Lanka or Ceylon, as
it was then called, organized labor became more powerful and clashed
with management frequently. The estates were at this time managed by
agency houses looking after the interests of the owning companies. The
agency houses were located in the city of Colombo and they appointed
Superintendents (Managers) to live on the estate and manage it for
them. Like all organized labor unions, they fought for worker rights
and minimum wages etc and the labor laws were becoming more and more
favorable towards the workers. Over a period of time worker benefits,
wages and work norms were regulated in favor of the workers under the
auspices of the labor department.
some of these union leaders are elected members of parliament in the
Democratic Government of Sri Lanka and continue to be Presidents of the
Workers Union also. One might even consider this a conflict of
interest, but that is how it is! Wages (daily, not hourly) are set by
the government and workers have to be guaranteed 5 days work per week
and have to be given 8 hours work a day. Unlike in the US where hourly
paid workers can be sent home if there is insufficient work, in Sri
Lanka any person who reports for work in the morning has to be given a
full days work or paid full wages in lieu!!! Disciplinary action and
termination of services of estate workers is contested by the unions at
Labor Tribunals which come under the purview of the Department of
Labor. A worker who is dismissed from employment cannot be evicted from
the house that he/she has been living in on the estate!!! This is the
law!!! In a sense, estate management is crippled as a result of such
stringent labor regulations. Unlike here in the US where the laws are
pro management, in Sri Lanka they are pro labor and stifles management. Perhaps this is one of the reasons why it is still a third world country whereas countries like Singapore which were economically behind Sri Lanka in the '50 and '60s are well
today and on par with any western country. Tea estate worker’s rights
are upheld in Sri Lanka more than a comparable worker in the USA!!! As
such when people talk about fair trade, they should put everything in
perspective and not merely go by a label. According to the facts
described above, every commercial tea estate in Sri Lanka (about 650)
qualifies for fair trade certification by default!!!
illustrate my point, I would like to document some of the benefits that
tea estate workers are entitled to by law, and in some instances by
practice (valame) or tradition.
Wages are set by the government of Sri Lanka. Usually this is done in
conjunction with the Trade Unions and the Estate Employer’s Federation
under a collective agreement renewable every 2 years. However, in
certain instances (such as in 2006) trade unions resorted to strike
action to force a wage increase of 25%.
2 Workers are Guaranteed 40
hour work week (5 days per week) and have to be paid the wages set by
the government (as described above).
3 Workers have a right to join
trade unions and for union subscriptions to be deducted from the
payroll. Trade union leaders have to be given time off to represent
urgent matters to the management.
4 Casual laborers have to be made
permanent after 1 year of employment. The first day of casual
employment is regarded as the date of first employment for purpose of
computing retirement benefits.
5 Permanent workers must be paid the
wages set by the government, plus contributions to a Provident Fund
(retirement account) at 10% - worker and 15% - Employer.
vacation of up to 42 days (holiday wages and attendance bonus)
depending on the attendance in the previous year, have to be paid.
Housing must be provided along with water service and sanitation.
Retired or dismissed workers cannot be evicted from their houses even
though worker housing is owned by the management.
8 Around worker
housing a small portion of land is allocated for a home garden for
cultivation of vegetables etc., depending upon land availability.
Permission is also granted for the construction of a cattle shed for
the purpose of raring cattle. Ravines and grasslands are accessible
free of charge to workers to cut fodder.
9 Disciplinary action must
be preceded by a formal inquiry. Termination of a worker is always
contested by the union and will most likely be followed by Labor
department intervention. If not resolved, trade union action such as
‘go slow’ or ‘strike’ may be resorted to and finally, the union would
appeal to the labor tribunal (labor courts), for unjust termination of
the worker. These are
provisions under the labor laws of Sri Lanka.
Workers and their dependents have to be provided medical benefits. A
health practitioner is employed by the management and a well stocked
dispensary is available. Free transport to and from the nearest
hospital is provided for those that need hospitalization. Workers are
entitled to sick leave pay at the rate of ½ days wages per day of
hospitalization, up to 14 days.
11 Pre-natal and post-natal clinics
are available for women and there is a midwife employed by the
management under the purview of the health practitioner. A welfare
supervisor employed by the management liaises between management
and the social welfare of workers.
12 Incentives are provided for birth control.
Pregnant workers are given 90 days paid maternity leave for the first
two children and 45 days for later pregnancies. After birth, mothers
are given time off for feeding their infants, twice a day at 10 am and
14 Pre-schools and infant/toddler day care centers (crèches)
are provided on the estate, and trained workers are employed by the
management for this purpose. Mandatory immunization programs are
strictly monitored. A free nutritional supplement (Thriposha) is given
to children up to 1 year. This is a UNICEF sponsored program, under the
auspices of the health department of Sri Lanka.
15 When there is a
death of a worker of a retired worker, work on the estate is cut short
by 2 hours so that workers can attend the funeral. There is no cut in
wages. Funeral expenses are paid for workers and their dependents. The
adage ‘womb to
the tomb’ could not be more appropriate than when it is used to describe the relationship between a worker and the estate.
Retirement benefits – Mandatory after 5 years of employment, and is
computed at the rate of 1 month wages for each year of service. This is
in addition to the Provident Fund described above. It should be very
clearly understood that the cost of all these social welfare programs
and benefits are the responsibility of the management and such
expenditure is included in the cost of production of every pound of tea
that is produced on the estate. No subsidies or grants are given by the
the above facts it would be apparent to any reader, that the Tea estate
workers in Sri Lanka are well looked after by the management and the
Government of Sri Lanka and in no way are they victimized or exploited.
To the contrary, their conditions of employment are superior to most
workers in developed countries in relative socio-economic terms.
Therefore ‘labels’ like Fair Trade Certification which are controlled
by Western organizations in developed countries, causes a disservice by
selling and profiting from their ‘certification’ on criteria set by them.
the facts are not presented to the consumer in the manner that they
should be, the labeling of 'Fair Trade' would merely permit
unscrupulous companies in the tea importing countries to create yet
another marketing niche, this time with dubious and misleading
Lalith Guy Paranavitana is the President and Founder of Empire Tea Services LLC, a specialty tea company in the USA involved with import and blending of high end teas from around the world. He was a Tea Planter (Tea estate manager) in Sri Lanka from
1970 - 1987 and then a Director of one of the largest tea corporations in Sri Lanka till 1989 when he immigrated to the US (please check out the 'about us' page on the web site www.empiretea.com ). He was trained by a British tea company called George Stuart & Co. which, like all other privately owned tea companies was nationalized in 1973. Thereafter he was absorbed into the Government owned State Plantations Corporation, became a Superintendent in 1977 and a Director in 1987. He travels to Sri Lanka every year to visit tea estates and meet with tea management executives. Tea estates were denationalized and sold back to the private sector in 1994. He conducts Tea Tours to Sri Lanka with the intention of showing tea entrepreneurs in the USA and worldwide, the fallacy of Fair Trade Certification in the Sri Lanka tea industry.