Coal India workers get 20 per cent wage hike after prolonged bargaining

After prolonged discussion of revision of wages, which was 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 wage hike and other benefits.

The discussion, which was concluded after a 4-day meeting, went mostly in favour of the trade unions affiliated to the BJP, CPI, CPI-M and Forward Bloc despite the Congress supported INTUC, Coal India’s largest trade union, not able to participate in the negotiation process, as per 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 3-point note.

In the first place, the gross wages to the workers, which includes basic wage, variable dearness allowance, special dearness allowance and attendance bonus, has been hiked by 20 per cent across all non-executive categories.

Secondly, Coal India has agreed to create a Rs. 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. As per a company official, Coal India will contribute a one time payment of Rs. 18,000 per worker and each of the workers will contribute Rs. 40,000 to create this corpus.

However, the timeframe over which the contribution from workers will take place to create the corpus is yet to be worked out.

In the third place, the company, which so long was contributing 1.7 per cent towards the pension funds, will not have to contribute seven per cent.

Trade union leaders, who are mostly happy with the negotiation, arguing that they could extract the maximum possible from Coal India, told Business Standard that in effect, although the basic wage revision is to the tune of 20 per cent hike, considering the other benefits and hikes, the total outgo from the company towards wages and workers’ benefits is to the tune of 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 month-end. But it will not hamper the company’s operations”, D. D. Ramanandan, president of All India Coal Workers’ Federation told this newspaper.

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, so far, 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 coal demand so long.

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 Rs. 33,514.29 crore, up by 11 per cent as compared to the 2015-16 fiscal year. While the company paid Rs. 25,995.43 crore as salary and bonus to the workers, contribution to provident fund and other funds stood at Rs. 2,666.44 crore and another Rs. 1,029.68 crore was spent on gratuity. 

The company is yet to calculate the final expenses post the wage agreement.

The wage agreement is valid for till July, 2021 post which, another round of wage negotiation will take place.