Coal India Limited, the state-owned coal mining company, is stuck in a deadlock with its workers union over this year's salary hike. While the union had earlier demanded a 50 percent hike, the demand was brought down to 21 percent after much talk and discussion. However, the firm has said that it cannot afford such a large hike and can only manage about 15 percent.
Considering the union refused to take the offer even after the three-day meeting that ended on Saturday, the Kolkata-headquartered company will now study its position and funds once more to see if the demand can be accommodated. The two parties are set to meet again on Thursday, August 24.
Even though Coal India has said that it doesn't have sufficient funds and has communicated the same to its workers, the union believes that the firm has spent a lot of funds on dividend payment and transfer to the government under the buyback scheme.
"We have been asking for an additional Rs 5,600 crore on account of salaries of workmen but the Coal India management want to offer about Rs 4,500 crore. However, we will not accept anything below 21 percent," the Economic Times quoted B K Rai, who is representing coal workers on behalf of BMS at Coal India, as saying.
"Workmen salaries accounts for as much as 52 percent of cost of production of one tonne of coal," a senior Coal India executive noted.
SQ Zama, general secretary of Indian National Mineworkers' Federation under Indian National Trade Union Congress (INTUC) also explained that Coal India has spent a lot of funds on dividends and its net worth has halved. "Higher dividend, the buyback scheme, lack of scientific assessment and proper planning towards factual demand supply of coal and power has caused damage to the financial strength of the company," he added.
In 2016-17, Coal India is said to have spent about Rs 33,000 crore on salaries. Of this, Rs 28,000 crore comprised worker salaries and the rest was spent on management salaries.
Meanwhile, Coal India has been witnessing some tough times of late and its profit declined for the fifth straight quarter April-June this year. The company recorded a 23.3 percent fall year-on-year to Rs 2,351 crore and employee cost is said to be one of the factors behind it.
"Employee benefit expenses for the quarter includes an adhoc provision of Rs 688.94 crore towards salary and wages of the non-executive employees of the company and Rs 89.34 crore towards salary and wages of the executive employees of the company," the firm had earlier said in a filing, according to Bloomberg Quint.
