Contrary to previous years, a majority of the top tea plantation companies in Assam might not pay a 20 per cent bonus to their workers this year.
The largest workers’ union, in turn, has warned of serious consequences if this happens.
Irrespective of profit or loss, legal provisions stipulate a minimum of 8.33 per cent and a maximum of 20 per cent bonus to workers. Negotiations between workers, the Indian Tea Association (ITA), and plantation companies are expected to start this week.
“The industry has for the past five years been paying bonus at around 20 per cent. However, it has been in very bad shape for some time and many large companies have either been incurring losses or are not in a position to pay bonus,” said Vivek Goenka, chairman, ITA.
In fact, ITA is appealing to the Centre to take over the employers’ portion of contribution towards the employees provident fund for three years. It fears some companies might fail to make the statutory payment.
“Where is the money? This is the fourth consecutive year of loss for us and working capital is already utilised. More, following ratings downgrades for many, banks are also not keen to lend," said Jagjeet Kandal, managing director at Amalgamated Plantations, second largest tea company in the country.
Plantation firms, led by ITA, have made various representations to the Centre and the Assam government to relieve the stress on the sector. They have pointed to low prices, higher supply and stocks of tea, and other factors, including lack of adequate promotion. The Assam government has formed a committee under its industry ministry to consider the situation.
The Assam Chah Mazdoor Sangha (ACMS), single largest trade union in the industry, said a fact-finding exercise was needed to be undertaken.
“Not all companies are suffering because of low prices. There are some producers who mortgage gardens to fund other ventures and when those ventures sink, the garden goes for a toss,” alleged Rupesh Gowala, general secretary at ACMS. “A high-level committee needs to be appointed to find out if the stress is real or an outcome of individual companies’ policies.”
Bonus payment, says ACMS, is not only about monetary benefit but an index of how an estate shows goodwill and seriousness towards its workforce.
“There have been instances of violence in the past over this issue and if plantation companies do not agree to the 20 per cent bonus payout, there may be law and order problems,” said Gowala.
The union leader joins the larger plantation companies in alleging an imbalance has been created on account of the rise in small tea growers (STGs) in the region. The latter now account for nearly half of Assam's output.
On account of lower cost of production, STGs are in a position to offer their produce at cheaper prices, compared with the estates, which is alleged to have led larger estate companies into losses.
“The workers in STGs don’t have any fixed wage and do not get any facilities. It is exploitation of the working class and the government needs to intervene and regulate it,” Gowala added.
The tea workforce in Assam is around 1.8 million. Around a million are employed in the estates and the other 800,000 in the STGs.