Annual wage outgo of SAIL will go up by at least by Rs 1,000 crore with the PSU set to sign a pact with its 85,000 non-executives for a 16 per cent hike in basic and dearness allowances and six per cent rise in perks.
Wage revision in SAIL, done every five years, is pending since January 2012 due to differences on the extent of hike between the company management and its unions' umbrella body, National Joint Committee for Steel (NJCS).
"The management and the unions have nearly reached an accord at the last meeting held in December. It will be given a final shape in the form of an agreement in the next meeting slated later this month," a source involved in the discussions told PTI.
At the last meeting, the management conveyed to the Union representatives that given the current scenario of the steel industry, it would not be able to shell out more than 16 per cent hike in basic and dearness allowances apart from a 6 per cent rise in perks and pensions each.
Union representatives involved in wage talks were demanding between 17-18 per cent hike, the source said, adding the management has asked them to come back with a consensus in next meeting.
Initially, the union had asked for a 21.6 per cent hike, similar to the rise in 2007, in basic and dearness allowances.
However, the management said given the current market condition of steel in which consumption grew by just 0.5 per cent during the April-December period, an encore of 2007 is just not possible.
"Even if the unions agree with management's proposal, it will add at least Rs 1,000 crore burden on wage front for SAIL each year. Since the revision has been pending for two years, the immediate outgo will be over Rs 2,100 crore," the source said.
SAIL has already made the required provisions for paying out majority of the arrears and the disbursement would be made soon after the wage revision pact is signed.
The company's net profit more than doubled to Rs 1,180 crore in the July-September quarter, although realisation fell by 6.5 per cent on subdued prices. Its employee expenses, however, went up to Rs 2,495 crore during the quarter from Rs 2090 crore in the same period a year ago.
