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Coal India Ltd (CIL) on Monday said that following a Joint Bipartite Committee for the Coal Industry (JBCCI)-XI meeting, the miner has reached an agreement over wage revision with its 2.38 lakh non-executive workers. Under the agreement, 19 per cent of minimum guaranteed benefit effective July 1, 2021, on emoluments including basic, VDA, SDA and attendance bonus and 25 per cent increase in allowances, have been granted.
“The Joint Bipartite Committee for the Coal Industry (JBCCI)-XI consisting of representative of management of CIL, Singareni Collieries Company Ltd (SCCL), five central trade unions i.e. BMS, HMS, AITUC, CITU and Indian National Mine Workers’ Federation (INMF), an affiliate of INTUC in its 10th meeting held on 20th May 2023, recommended and inked National Coal Wage Agreement (NCWA)-XI for the period of five years with effect from July 1, 2021 ,” CIL said in a notification to BSE on Monday.
Around 2.81 lakh employees of CIL and SCCL who were on the rolls of the company, as on July 1, 2021, would be the beneficiaries post implementation of NCWA-XI.
CIL made provision of around ₹9,252 crore for 21 months effective July 1, 2021, to March 31, 2023, for this effect.
“The final impact of 25 per cent increase in allowances will be intimated shortly which is not likely to be significant,” it said.
Impact on profits
It is to be noted that the State-owned miner had registered nearly 18 per cent drop in consolidated net profit at ₹₹5,528 crore for the quarter ended March 31, 2023, as compared with ₹6,715 crore same period last year due to higher expenses on the back of wage hikes.
The provisioning made in the accounts every quarter since July 1, 2021, the date of commencement of NCWA-XI, had a “telling effect” on CIL’s profit in the fourth quarter of FY23, it had said.
Excluding the provision on wage cost due to NCWA-XI, CIL’s Q4 PAT during FY23 would have been around ₹9,920 crore, an all-time high for any quarter till date. On a like to like comparison, it would have reflected a growth of 40 per cent over ₹7,071 crore of Q4 FY22 instead of 18 per cent shrinkage, the company had said in a note recently.
Of the total provision of ₹8,153 crore charged to profit and loss account on account of wage revision during FY23, the last quarter alone took up 72 per cent at ₹5,870 crore. “Such a high provision was necessitated during the quarter because the company had inked a memorandum of understanding under the wage pact recommending 19 per cent minimum guaranteed benefit after Q3 FY23. With only other allowances yet to be agreed upon, shaking hands on the NCWA-XI between the company’s management and the unions at the earliest would ease the pressure. The company’s bottom line in the ensuing quarters would be steady with no provisions required in the accounts,” it had said.
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