Thursday, January 12, 2012

CIL wage hike talks enter crucial phase

It is reported that Coal India Ltd might have entered the defining phase of wage negotiation beginning Tuesday. The three day joint bi partite consultative committee meeting for the National Coal Wage Agreement-IX will be held at Nagpur between January 10 and January 12. The five year pact will be brought into effect from July 1.

With labour unions already pitching for a nearly 30% salary hike higher than a 24% hike in NCWA VIII during the last JBC meeting in Bhubaneswar held during December last year, sources expect discussions to enter the most crucial phase at Nagpur.
CIL had made an opening offer of a 10% salary hike during the latest negotiation.
While it has yet to be seen how the coal major would negotiate the stiff demand from labour unions, sources told Business Line that a 30% wage hike would increase the company's employee-related expenditure by nearly INR 6,000 crore annually double the current rate of provisioning by the company.
CIL provided for a little over INR 750 crore towards the wage pact impact during the July to September quarter. On an annualised basis, the company therefore is providing approximately INR 3,000 crore.
Assuming that the latest round of price rationalisation brought into effect from January 1 would boost the company's earnings by over 12% (approximately INR 6,000 crore annually), a 30 per centage will therefore neutralise the gains on the earnings front.
Source : Business Line

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