State-run Steel Authority of India Ltd (SAIL) will start clearing arrears for its 92,000 non-executive employees from July 15 after an agreement on a wage hike was formalised on Tuesday.

The employees are set to get a 17 per cent hike in basic pay and dearness allowance along with a 6 per cent rise in perks with effect from January 2012.

“The National Joint Committee for Steel Industry (NJCS) finalised the wage settlement for non-executive employees of SAIL on July 1, 2014 in the presence of CS Verma, Chairman, SAIL. The wage settlement shall be effective January 1, 2012 and would benefit more than 92,000 employees,” the company said in a statement.

The steelmaker has already made the provision for paying out most of the arrears and the immediate outgo will be ₹ 2,300 crore, a senior company official said. The arrears will be paid in two instalments starting July 15, the company said.

SAIL revises its employees’ wages every five years. The current hike had been pending since January 2012. The delay was due to the demand of employees’ unions asking for 21.6 per cent hike in basic and dearness allowances, which was rejected by the management after it cited poor market conditions.

In June, the Minister of Steel, Mines and Labour and Employment, Narendra Singh Tomar, had approved the wage hike. SAIL is expected to bear an additional expense of ₹1,000 crore annually on account of the wage hike. In fiscal 2013-14, the steelmaker’s wage bill was ₹ 9,594.03 crore, or 20 per cent of its total income from operations. The company had reported a profit of ₹2,631 crore for 2013-14 on a total income from operations of ₹46,837 crore.

With the latest wage revision, the public sector steelmaker has now effected nine wage revisions since 1969.

Published on July 2, 2014