How Low Wages and Poor Working Conditions Affect Employee Performance in Sri Lanka’s Tea Industries

Introduction

The Sri Lankan tea industry is the most famous in the world. It means there is a special market for the brand in the “Ceylon Tea” market. unfortunately, there is a hidden story behind this industry in Sri Lanka. Even though they contribute to earning foreign exchange for Sri Lanka, its workers often face low wages and poor living conditions. Today, this is negatively affecting the workers and our tea industry.

Low wages and their impact

Tea plantation workers in Sri Lanka earn low wages. Today, their daily wage is LKR 1,700.

The business claims that the government's order to raise worker salaries from 1,000 rupees to 1,700 rupees ($5.66) per day will result in a 45% rise in the cost of producing tea. (Jayasinghe U., 2024) .

This amount does not meet their basic needs. Even with occasional increases, their salary often falls short of the rising cost of living. As a result, they struggle to afford enough food, health care, and quality education for their children. This situation has led to

 • Low motivation and morale – This has led to a decline in work quality

 • Job turnover in search of better options – especially the younger generation moving to other         job opportunities

 • Limited skill development

In the end, low wages hurt employee loyalty and productivity, creating a cycle of inefficiency that affects the entire supply chain.

The average production level decreased as labor scarcity increased, and the productivity gap grew as the labor shortage became more severe. The cost of production and productivity levels are strongly correlated negatively (Shyamalie H W., Karunarathna  B M N C., Pilapitiya H M C G., Lakshani  P T P., Chathuranga T H I., Nadeeshani K W N.,2020).

The labor force in Sri Lanka's tea industry is significantly declining since many workers are leaving the tea plantations. One of the most important elements in lowering employee turnover is incentives. However, it is debatable how incentives affect worker motivation in the tea industry (Lakmali M G T., Samaraweera G C., Harshana P V S., 2022).

 

Poor working conditions and their impact

Tea plantation workers often face physically demanding conditions. They deal with steep terrains, long hours, bad weather conditions, and limited access to safety gear. Many estates also do not provide sufficient estate infrastructure. These also negatively affect the Sri Lankan tea industry.

Industrial impacts

1.      Low tea yields

2.      Low-quality production affects the competition in the international tea market.

3.      Higher operational cost in the industry

4.      Difficult to find enough workers.

Solutions

What can be given by the Estate owners?

1. Increase wages and labor incentives. -  Offer fair pay, bonuses, a festival advances system, and performance-based rewards to motivate workers.

2. Improve working and living conditions. -  introducing new housing schemes for estate workers, sanitation, healthcare, and providing proper safety equipment.

3. Provide training and skill development. -  Train workers in efficient plucking, safety practices

4. Encourage worker engagement - Listen to worker issues, and involve them in decisions.

 5. Introduce productivity tools and modern technology. - Use modern equipment and efficient field layouts to reduce worker fatigue.

6. Support worker welfare and community programs. -  Offer education support, health programs, and financial training for workers' families.

    Considering all of this, the plantation sectors cannot find solutions on their own, and the government needs to assist them to prevent this situation. As a government,                   

         1.     They can implement fair wage policies. -Set wage levels that keep up with the real cost of living so workers can manage their basic needs. Ensure that wage talks between plantation owners and labor unions are conducted openly, fairly, and without undue delay. Provide support, such as incentives or subsidies, to help smaller plantations cope with the changes brought by new wage requirements.

      2. Introduce strong labor laws. - Strengthen labor monitoring to ensure safety and welfare guidelines are followed. Impose strict penalties on plantations that do not comply with labor regulations. Update and enforce modern safety rules related to chemical handling, protective equipment, and work-hour limits.

      3. Improve housing and infrastructure in plantation communities. - Build better and modern housing facilities for estate workers. Upgrade infrastructure in plantation communities by improving roads, medical clinics, schools, and public spaces

     4. Provide a good education system and training programs for the estate community - Provide workers with practical training in updated plucking techniques, tea processing methods, and the use of modern machinery. Create opportunities for the children of plantation workers by offering scholarships and educational assistance. Encourage programs that help workers develop new skills so they can earn additional income beyond traditional plantation work.

The level of motivation, skills, knowledge, training, and health are the main contributory factors in determining the level of efficiency of the workforce. Therefore, it is firmly believed that labour policies and practices of organizations do matter and are important in improving the labour productivity of those organizations

Conclusion

The success of Sri Lanka’s famous tea industry relies on improving the well-being of its workers. Low wages, poor conditions, and limited opportunities hurt both workers and productivity. Estate owners and the government need to work together to provide fair wages, better living conditions, training, and community support. When workers are treated well, the quality of tea and productivity increase. This enhances the reputation of “Ceylon Tea” and benefits the entire country.

 

 

References

Jayasinghe, U. (2024) Sri Lanka's tea producers warn 70% wage hike will hit industry. Reuters, 28 May. Available at: https://www.reuters.com/markets/asia/sri-lankas-tea-producers-warn-70-wage-hike-will-hit-industry-2024-05-27 (Accessed: 20 November 2025).

Lakmali, M.G.T., Samaraweera, G.C. and Harshana, P.V.S. (2022) ‘Significance of Financial and Non-financial Incentives in Shaping Employee Motivation in Tea Industry’, Sri Lankan Journal of Agriculture and Ecosystems, pp. 112–124. Available at: https://sljae.sljol.info/articles/10.4038/sljae.v4i1.69 (Accessed: 18 November 2025).

Shyamalie, H.W., Karunarathna, B.M.N.C., Pilapitiya, H.M.C.G., Lakshani, P.T.P., Chathuranga, T.H.I. and Nadeeshani, K.W.N. (2020) ‘An Analysis of the Impacts of Labour Scarcity on Land Productivity in Sri Lankan Tea Plantations’, Tropical Agricultural Research, pp. 54–64. Available at: https://tar.sljol.info/articles/10.4038/tar.v31i4.8421 (Accessed: 19 November 2025).