Estate Workers’ Wages: Forever Promised, Never Delivered

Photo courtesy of Sri Lanka Brief

The NPP government has been in power for a year and it is nearing two years since the release of the Hatton Declaration, a document that pledged to address the fundamental issues faced by the Malaiyaha community.

Before the election, the NPP promised a daily wage of Rs. 2,000 for plantation workers. Later, during the presentation of the 2025 Budget, President Anura Kumara Dissanayake announced that the government would intervene to ensure a wage of Rs. 1,700.

However, many months have passed since that announcement and the government has yet to deliver on this promise. For the Malaiyaha people, who continue to live under severe economic hardship, the NPP’s inaction has been deeply disappointing rather than a cause for celebration.

On September 9, a meeting was convened at the Ministry of Plantation and Community Infrastructure between plantation management and ministry officials to discuss securing the Rs. 1,700 wage. However, the outcome offered little solace to the workers. Addressing a press conference after the meeting, Deputy Minister Sundaralingam Pradeep said sector stakeholders had pointed to the drop in global tea prices, the lack of a fair price for their product, high production costs and the expenses of providing worker welfare. “They did not say they cannot grant a wage increase but they emphasized the challenges that prevent them from doing so,” he said. Plantation companies said that the government had agreed to link wages to production. “The Government has agreed to a production-based wage model and has requested us to submit a plan. We will present it next week, and we are working on a proposal that would allow workers to earn more,” company representatives said. Deputy Minister Sundaralingam Pradeep said that another round of discussions would be held in a month, adding that the government would take steps to raise the daily wage of estate workers to Rs. 1,700 as pledged.

Hunger spreads in plantations

The UNHRC, citing reports from the World Food Programme, has revealed that 16 percent of Sri Lankan families lack access to adequate and nutritious food. Female-headed households are among the most vulnerable with more than half of families forced to cope with hunger by cutting down on meals, reducing portion sizes or giving up preferred foods, according to WFP data.

As a result, one in four families now eats fewer meals and the rate of undernutrition among children under five has worsened, rising from 12.2 percent in 2021 to 17 percent in 2024 due to insufficient weight gain. The High Commissioner’s Office also reported that the country’s prolonged economic crisis has doubled the poverty rate with food insecurity pushing poverty levels to 24.5 percent between 2021 and 2024.

Among the hardest hit are the Malaiyaha Tamil plantation workers who were already struggling with deep poverty. The report warns that the ongoing economic crisis and mounting debt burden have left this community disproportionately vulnerable. In such an environment, the failure to increase wages for plantation workers will only intensify their hardships, further entrenching hunger and malnutrition.

After years of struggle by workers and unions, a gazette notification was finally issued by the Department of Labour on August 13, 2024 during the administration of President Ranil Wickremesinghe. The notification set the minimum daily wage for tea and rubber plantation workers at Rs. 1,350, with an additional Rs. 350 as a productivity incentive, raising the total to Rs. 1,700 per day.

The Labour Tribunal, convened on June 8, 2024 by the Red Flag Organization, has submitted its recommendations on the pressing problems faced by workers. The evidence presented by plantation workers was described as heart breaking. The three member bench, visibly moved by the testimonies, concluded that the central issue confronting workers is the daily wage, which they said had increased far too slowly and even when raised has not been fully passed on to workers.

In its recommendations, the tribunal declared that estate workers are entitled to a minimum daily wage of Rs. 1,700 and urged that all public and private stakeholders take immediate steps to implement it without delay. It further recommended that the government appoint a special committee, comprising estate employers, women workers and experts in the field, to review the current economic conditions and cost of living of estate workers in order to determine a fair and sustainable wage structure.

Plantation companies remain reluctant to increase workers’ wages. Since colonial times, estate owners have treated the Malaiyaha community, brought to Sri Lanka as semi-slave laborers, with indifference and exploitation – a practice that continues to this day. Employers argue that raising wages would push up the production costs of tea and rubber, which they claim cannot be absorbed in light of declining global demand and fluctuating prices.

The numbers tell a different story. According to Asia Pacific’s analysis of customs data, Sri Lanka’s tea exports rose to 23 million kilograms by June 2025, an 11 percent increase compared to the first half of the previous year. Export earnings for the first six months of 2025 reached $743 million, the highest revenue for this period since 2014 when 157 million kilograms of tea exports earned about $805 million. A particularly striking trend is the growth in packaged tea exports, which now account for 46 percent of total exports, up from 39 percent the previous year.

According to the Central Bank, export revenues from key plantation crops continue to climb even as workers’ wages remain stagnant. Coconut exports earned $155 million in the first quarter of 2025, compared to $125.6 million in the same period last year. Tea export income rose by 6.2 percent to $478.3 million. Rubber exports recorded the most dramatic jump, increasing by 37.8 percent to $11.2 million.

When looking at specific markets, Iraq emerged as the largest importer of tea, with purchases rising 28 percent to 18.7 million kilograms. Libya showed the most dramatic surge with imports climbing from 3 million kilograms to 11.4 million kilograms, a record 280 percent increase.

By contrast, Russia, traditionally Sri Lanka’s top tea market, saw a decline in imports dropping from 13 million kilograms to 11.2 million kilograms due to the ongoing Russia-Ukraine conflict.

These figures suggest that the plantation companies’ reluctance to pay the proposed wages of workers stems not from profit-loss realities but from a deeply ingrained attitudinal problem. For over two centuries, the Malaiyahas have remained trapped in conditions reminiscent of the British colonial era, where their labor  was exploited without regard for dignity or equity.

In fact, labor struggles against the importation of workers from India to Sri Lanka and Malaysia pressured both the British colonial rulers and the plantation owners to respond. Under this pressure, the Indian government announced on January 20, 1921 that it would ban the recruitment of workers for Sri Lanka’s plantations.

This decision eventually led to the appointment of a committee in 1925 tasked with investigating plantation wages. The committee was chaired by S. Renganathan, India’s representative in Sri Lanka, and included Director of Census and Statistics, L.J.B. Turner. On Renganathan’s advice, a report was prepared analysing the daily living expenses of plantation workers, categorized by three regions: upcountry, mid country and low country.

From this study emerged the Minimum Wages Ordinance of 1927, a landmark law that faced fierce resistance from plantation owners. Even then, it took two additional years before the Act was finally enforced.

Plantation workers and the trade union movement

From the beginning, plantation workers were marginalized in the trade union movement. In the early 20th century, estate workers’ wages were negotiated between three actors: the employers, the government and the workers. Workers were formally represented by the Kankani system, an intermediary structure in which Kanganis acted as labor supervisors and wage distributors. However, while workers received their wages, much of it was often funneled back through the Kanganis, leaving laborers trapped in cycles of exploitation and debt.

By 1920–1921, some estate staff and Kanganis temporarily aligned with workers but plantation laborers still lacked true representation. The mainstream trade union leadership, dominated by A.E. Gunasinghe, focused primarily on the urban working class. Gunasinghe, who became known as the father of the labor movement, paid little attention to the plight of plantation workers whose conditions were far harsher.

For the first time, plantation workers were nominally included when a deputy chairman of Gunasinghe’s Ceylon Labour Union came from among their ranks. However, this limited representation was not born out of genuine solidarity; it was largely tied to the political opposition to migrant labor practices rather than to improving the actual living and working conditions of estate workers.

The trade union movement led by Natesa Iyer became a major challenge for estate owners who thrived on maintaining a semi-slavery system. To protect their interests, elaborate plans were put in place to remove Iyer’s influence from the estate sector.

Later, when the Lanka Sama Samaja Party (LSSP) gained traction among plantation workers, the movement faced another setback with the banning of the party, which crushed its organizing strength in the estates. Even when the LSSP re-emerged and entered the ruling coalition in 1970, it further weakened its credibility by opposing plantation workers’ struggles, thereby eroding its own trade union power.

Meanwhile, the Ceylon Workers’ Congress (CWC) from its inception functioned largely in line with the interests of the estate owners. Instead of representing the genuine struggles of workers, the CWC often worked to contain them. To this day, it continues to stand more firmly with employers than with the workers it claims to represent.

Tripartite collective agreements and the role of Thondaman

In 1997, under the government of President Chandrika Kumaratunga, a tripartite collective agreement was introduced to determine the wages and benefits of estate workers. This agreement involved the Labour Commissioner, employers  and trade unions.

The main trade union representing estate workers at the time was the Lanka National Estate Workers Union, affiliated with the UNP and historically influenced by the CWC. Other estate trade unions also participated jointly in the agreement. Although the NPP achieved a significant victory in recent elections in the hill country defeating the CWC the influence of traditional unions has remained largely intact.

These trade unions have consistently acted in favor of the plantation companies when determining wages and other rights of estate workers through collective agreements. Historically Soumyamurthy Thondaman, the long-time leader of the CWC in the plantation sector and later his successor Arumugam Thondaman, signed such agreements in ways that largely protected the interests of the employers rather than the workers.

When the Wage Control Board recommended an increase in estate workers’ wages, the plantation companies challenged the decision in court, resulting in the annulment of these collective agreements.

A significant milestone in the history of estate workers occurred on October 24, 2018 when a protest was organized at Galle Face demanding higher wages for plantation workers. Notably, this protest was led by the children of Malaiyahas who had migrated from estates to the capital city and taken up other jobs, without any involvement from traditional plantation trade unions. Despite the peaceful nature of the demonstration, the police responded with tear gas and batons.

The battle to increase the daily wage to Rs. 1,000 lasted over three months. Ultimately, the resulting collective agreements favored estate owners, with participation from the UNP and CWC, and tacit approval from the Tamil Progressive Alliance. Meanwhile, trade unions representing left wing parties and smaller unions opposed these agreements, highlighting the divide within the labor movement.

Even after the decline of traditional political parties in the plantation sector and the rise of the JVP, the wages of plantation workers remain insufficient. While workers remain hopeful for change, the proposed Rs. 1,700 daily wage still falls short of meeting the current cost of living, leaving many families struggling.

The proposed Rs. 1,700 daily wage was set several years ago but a fair and livable wage must reflect the current cost of living. Regardless of the plantation companies’ stance, the decision ultimately rests with the government. Since collective agreements tend to favor the companies and traditional trade unions do not fully represent workers’ interests, immediate action from the Wage Control Councils is essential. If this delay continues, the cold mountains of the estates may soon erupt with renewed worker protests and struggles.