The Employers’ Federation says that wage increases to the tea sector were determined under a June collective agreement which stipulates a daily allowance rise of Rs 6, totalling Rs 150 a month. The unions also accepted a formula that links increments to productivity, but now claim that circumstances have changed since the devaluation. The unions point to increase in production. In the first five months of 2000, tea production increased by 7.9% compared to the same period in 1999. Tea exports rose by 3.8% and export earnings by 18.8% to Rs 19.8 billion ($253 million). But employers argue that productivity levels are lower than in other tea producing countries.
The government, which needs the support of the CWC at general elections, intervened and following discussions, the President appointed a committee on 20 September to examine the wage issue. The CWC may have extracted concessions on undisclosed political demands before agreeing to end the strike.