Agri Business

Plantation sector in limbo over payment of wages

V Sajeev Kumar Kochi | Updated on January 15, 2018 Published on November 14, 2016

The plantation sector is keeping its fingers crossed over the delay in payment of wages to workers, due to demonetisation and restrictions on cash withdrawals from banks. Since the sector has been covered under the Payment of Wages Act 1936, Section 6 of the Act stipulates wage disbursements in currency and coins. However, the present currency crisis has made serious implications on wage disbursement in the sector.

It is understood that the sector has sought the intervention of the Centre to withdraw cash by waiving the restrictions on withdrawal. Sources told BusinessLine that they are planning to approach the Centre as well as the RBI in this regard, given the sensitivity of the issue.


It is pointed out that the plantation sector employs large number of workers in remote locations and wages are distributed in cash.

Advance on the wages are being paid on weekly basis by cash and this necessitates the plantations to withdraw the required amount for disbursement large number of workers. In most of the locations, bank branches do not exist near the estates. Further, workers are generally not very receptive to the idea of wage payment through banks. Moreover, plantations employ significant number of migratory workers, who never stick to one particular estate; they keep moving and look for the gross amount in cash.

Meanwhile the Kerala government is exploring various options, including Assam’s model of wage disbursement to workers in the sector, in its effort to find out an amicable solution.

The Assam government had solved the problem by entrusting deputy commissioners in each district to provide cash to tea garden owners, after collecting cheques from them.

A similar move can be adopted here by entrusting district collectors to collect cheques from individual estate owners and then distributing the money to them through treasuries.

“We have informed the Kerala government about these options, and it is now up to them to take the final decision,” a senior official in the Labour Department said.

Published on November 14, 2016
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