Fair wages

Fair wages

Under compliance criteria 3.5.0.01, estates certified under the Fairtrade Hired Labour Standard must ensure that: 

‘The company sets wages for workers and other conditions of employment according to legal or Collective Bargaining Agreement (CBA) regulations where they exist, or at regional average wages or at official minimum wages for similar occupations; whichever is the highest, with the intention of continually increasing salaries.’ 

On the estates visited, workers are members of a mixture of the following trade unions: 

• AITUC: Plantation Labour Association 

• NTUC: The Nilgiri District Estate Workers Union 

• DMK: Labour Progressive Front 

Factory worker
Factory worker

All workers at United Nilgiri and Welbeck are employed on permanent contracts and belong to a trade union, which enters into the CBA process on behalf of their members. The majority of workers at Dunsandle belong to a trade union, with a small number choosing not to. When employing new workers, Dunsandle employs people on a temporary contract before they become permanent.

The sectoral basic wage is agreed every four years through the CBA, and is applicable to all member estates of the Nilgiri Planters Association. The current basic wage for these estates is set at a daily rate of 191.00 INR per day and was put in place on June 30 2017. This is an increase of more than 97 percent on the previous daily rate of 96.65 INR set in June 2013.

Factory worker

United Nilgiri, Welbeck and Dunsandle also operate a Dearness Allowance (DA), an additional sum of money paid by the companies to the workers as part of their wage packet. The DA is calculated using the Consumer Price Index, and is subject to change quarterly.

At the time of the research (October to November 2018), the DA figure was set at 116.97 INR per day. This takes the total day rate for workers to 307.97 INR (£3.28 per day)

The tea sector in India is governed by the Plantation Labour Act (PLA). The PLA, enacted in 1951, mandates employers to: i) ensure health of the workers by providing clean drinking water, separate urinals for men and women, medical facilities for workers and their families; ii) ensure welfare of workers by providing canteens, crèches, recreational facilities, educational facilities, and housing facilities; and iii) regulation of work by stipulating weekly hours of work, daily intervals of rest, annual leave with wages, sickness and maternity benefits.

Through the PLA, workers receive ‘in-kind benefits’ from their employers. The extent of employers’ responsibilities differs, depending on the number of workers hired by the estate. This piece of legislation and the requirements it places on employers is often cited as a challenge when discussing workers’ living conditions and wage reform.

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