Revised wage agreement for SAIL workers at Durgapur

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After two years of deliberation, the Steel Authority of India Limited (SAIL) management has finally been able to ink an agreement with leaders of its unions’ umbrella body, National Joint Council for Steels (NJCS) to settle the revised wages of Steel Authority of India Ltd (SAIL) non-executives. The wage revision agreement reached on January 25 will benefit the workers of the two SAIL units at Durgapur – Durgapur Steel Plant (DSP) and Alloy Steel Plant (ASP).

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 NJCS leaders. The wage settlement came as welcome news for the near 85,000 SAIL non-executive employees.

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There was a mood of joy and a sense of relief among the employees of both DSP and ASP in Durgapur. The workers of these two SAIL units at Durgapur have suffered huge monetary losses as the agreement got delayed for over 25 months.

Some of the major highlights of the wage agreement reached at the NJCS meeting on January 25 at New Delhi in presence of the SAIL chairman C S Verma are:

  • Minimum Guaranteed Benefit (MGB) has been declared as 17 % on Basic (as on 31.12.11) and DA (as on 01.01.2012).
  • A Special allowance of 6% of the Revised Basic will be paid to all the employees with effect from 01.01.2014.
  • The payment of arrears will be in two equal installments and the first installment will be paid within one month of signing the Memorandum of Agreement. The second installment of the arrear will be paid within a year.
  • On Pension Scheme the management will contribute 6% of Basic and DA with effect from 1.1.2012. The scheme will be finalized at the earliest and the contribution from the workers to the scheme will be finalized soon.
  • Management has also agreed to pay one additional increment if the company earns profit after tax (PAT) at INR 5000 crores for preceding three years during the operation of the current agreement.
  • Management proposed that House Rent Allowance (HRA) will be paid on pre-revised basic pay. After long discussion, it was decided that the issue of HRA & House Rent recovery (HRR) will be examined in the core committee meeting to arrive at an amicable solution. This committee will give its recommendation before signing of Memorandum of Agreement.
  • The issue of contract workers wages were also discussed at length and due to the sustained efforts taken by all the unions, SAIL management has finally agreed to pay a lump sum payment as additional welfare allowance (AWA) per month for the contract workers of each plant and unit.

Industry analysts feel that due to the new wage agreement the annual wage outgo of SAIL will go up by in the range of INR 1,000 to 1,500 crore annually.

Based on the current revenue, employee wages account for about 20 per cent of SAIL’s turnover. “The incremental rise in wage costs would further dent the margins by two percentage points in the near term for the next four to six quarters,” said an equity analyst with a Mumbai-based brokerage.

However, the SAIL Chairman C S Verma is confident that wage costs would come down with the increase in production over next couple of years. SAIL is implementing a modernisation plan which would enhance its capacity from 14 million tonnes per annum (mtpa) to 24 mtpa by 2014.

“We are increasing our output with the same number of employees, which should bring down the costs,” Mr Verma said. The company is retiring about 7,000 employees a year, while adding about 1,000 to its rolls.

Though there was a sense of jubilation among SAIL employees at its various units including that of in Durgapur, but the only unanswered question remains as to why is there talk of arrears payment in installments when SAIL has already made the required provisions for paying out majority of the arrears.

The final signing of the wage agreement will be done in next month according to sources.

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1 Comment on Revised wage agreement for SAIL workers at Durgapur

  1. It would be better if the remaining arrears of the wage revision, be paid soon. certain monetary difficulties, the people are facing and that will be a sign relief.

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