Coal India Ltd may enter the defining phase of wage negotiation beginning Tuesday.
The three day joint bi-partite consultative committee (JBC) 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 per cent salary hike — higher than a 24 per cent 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 per cent 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 per cent wage hike would increase the company's employee-related expenditure by nearly Rs 6,000 crore annually – double the current rate of provisioning by the company.
CIL provided for a little over Rs 750 crore towards the wage pact impact during the July-September quarter. On an annualised basis, the company therefore is providing approximately Rs 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 per cent (approximately Rs 6,000 crore annually), a 30 per centage will therefore neutralise the gains on the earnings front.