20 per cent hike for Coal India workers
After prolonged discussions on revision of wages, pending since June 2016, Coal India and its four major trade unions have finally settled the wage agreement, with the company conceding to a 20 per cent hike and other benefits.
The discussions, which concluded after a four-day meeting, went mostly in favour of the trade unions affiliated to the Bharatiya Janata Party, Communist Party of India, Communist Party of India (Marxist) and Forward Bloc despite the inability of Congress-supported Intuc — Coal India’s largest trade union — to participate in the negotiations, due to a court order.
Against a demand of 50 per cent wage hike, which was later brought down to 25 per cent, the trade unions settled the negotiation on a three-point note.
In the first place, the gross wages to the workers, which include basic wage, variable dearness allowance, special dearness allowance and attendance bonus, has been hiked by 20 per cent across all nonexecutive categories.
Secondly, Coal India has agreed to create a ~1,700-crore medical expenses corpus for the workers post-retirement. So long, medical benefits for the workers post-retirement wasn’t in place in the company. According to an official, Coal India will contribute a onetime payment of ~18,000 per worker and each of the workers will contribute ~40,000 to create the corpus. However, the time frame for the workers’ contribution to create the corpus is yet to be finalised.
In the third place, the company, which so long was contributing 1.7 per cent towards the pension funds, will now have to raise the figure to seven per cent.
Trade union leaders are mostly happy with the negotiation and are arguing that they could extract the maximum possible from Coal India. According to them, although in effect the basic revision is to the tune of a 20 per cent hike, considering the other benefits and hikes, the total outgo from the company towards wages and workers’ benefits would range around 40-45 per cent as against the 50 per cent demand.
“The wage agreement has been worked out and we are happy with it. Right now, minor differences remain which will be sorted out by the monthend. But it will not hamper the company’s operations,” D D Ramanandan, president, All India Coal Workers’ Federation, told Business Standard.
The salary hike will be applicable from June 2016 onwards and Coal India will be paying arrears to clear the pending dues.
Coal India officials were trying to keep the hike as low as possible and not concede to other benefits arguing that the company’s profitability was under stress owing to the tepid demand. However, the company, which has been provisioning for the wage settlement, isn’t likely to take an immediate hit on account of the negotiated conclusion. Moreover, officials argued that since coal demand is improving the company will be able to earn enough to meet the wage revision.
In the last fiscal year, the company’s consolidated employee benefit expenses stood at ~33,514.29 crore, up 11 per cent as compared to the 2015-16 fiscal year. While the company paid ~25,995.43 crore as salary and bonus to the workers, contribution to provident fund and other funds stood at ~2,666.44 crore and another ~1,029.68 crore was spent on gratuity.