Coal India Employees' Union demands 100% salary hike, demand would put CIL

Coal India Unions have demanded a 100% jump in their salaries-a demand that would put the state-run entity under a severe strain as its annual wage cost of Rs 20,000 crore already accounts for 42% of its expenditure.

In fact, one of the unions has demanded a five-fold hike.

Analysts are concerned about the impact of new salary on Coal India's finances. "It will make a huge dent on the bottomline," said Rajesh Agarwal, head of research at Eastern Financiers.

JP Morgan said in a research note that it was expecting 15-20% rise in wage costs.

Last week, the Coal India management met the five unions for the first time to negotiate salary hike under the National Coal Wage Agreement, which expired on June 30.

"The unions have asked for different salary hikes. So, we have asked them to discuss among themselves and come up with a common minimum demand when they meet us again on September 22," R Mohan Das, executive director personnel and industrial relation, told ET.

The basic salary of a Coal India worker is around Rs 8,320 per month. While the All India Trade Union Congress (AITUC) has asked for a revised salary of Rs 16,000 per month, the Hind Khadan Mazdur Federation (HMS) has asked for a minimum revised basic of Rs 40,000 per month.

If the Coal India management settles at a Rs 16,000 salary structure, the annual wage cost will double to Rs 40,000 crore. And at Rs 40,000 per month salary, Coal India will have to spend Rs 100,000 crore on salaries.

"We have asked for better parity in gross salary between workers and officers. At present, the salary ratio between workmen and officers stands at 1:30, which used to be 1:3 over 10 years ago. A 1:10 salary ratio would do justice to everyone," Jibon Roy, joint secretary at All India Coal Workers Federation, told ET.

The unions have also demanded a better parity between workers on its payroll and contract. While there are some 30,000-odd workers on contract at CIL, the ones on payroll would be around 3.7 lakh. "The contract workers' gets less than a worker, and this may lead to labour problem. In bid to resolve this issue, we have also asked for a hike in salary structures of such workers," Roy said.