The 10-year wage settlement for employees of public sector undertakings ended on 31 December 2006. The new wage structures were expected to be in place the following January.
But negotiations are dragging partly because the two sides have not been able to agree upon a basic pay raise. Employers and employees have also not been able to agree on the duration of a wage settlement, or the tenure during which the agreed salary structure should exist.
Under pressure from trade unions, the previous United Progressive Alliance government, supported by Left parties, agreed to reduce the period of wage settlement from 10 years to five in June last year, saying company managements will require the approval of ministers to do so.
But several public sector companies have declined to accept the new format despite the government order, trade unions say.
So far, only coal companies, which employ the largest number of workers at 600,000, have agreed to a new wage structure for the next five years. In an agreement reached in January after several strike calls, wages of the lowest paid unskilled workers, mostly miners, increased by 49% from Rs6,250 a month to Rs9,346 a month.
As negotiations drag on, about 60,000 employees of 11 major ports threaten to go on an indefinite strike from 15 September after the 20th round of wage discussions failed to reach an agreement last week.
Six steel unions representing 350,000 workers plan to hold a ballot among union members to decide whether they should strike, said Madhukar K. Pandhe, member of the National Joint Negotiations Committee for the steel industry.
Last week, negotiations stalled at Bharat Electronics Ltd (BEL), which employs about 6,500 people, for the 13th time. “Talks will continue,” said M.L. Shanmukh, human resources director at BEL. “There’s a difference of opinion on (the) salary formula.” BEL employees have been demanding a 40% hike in basic pay for five years while the management has offered a 30% hike for 10 years.
Power equipment maker Bharat Heavy Electricals Ltd’s (Bhel) five southern units of Ranipet, Chennai, Bangalore, Hyderabad and Tiruchirappalli, which employ 25,000, plan to go on strike on 14 September over delays in wage settlement, said R. Ethiraj, general secretary of the Labour Progressive Front, which is affiliated to the regional political party, Dravida Munnetra Kazhagam, in Tamil Nadu.
Joint Action Front—an umbrella trade union group which has public enterprise heavyweights such as Bhel, Hindustan Aeronautics Ltd, BEL and Bharat Earth Movers Ltd as members—is expected to take a decision whether to go on strike by 10 September, said K. Mohan, coordinator of Joint Action Front and general secretary of the employees’ union at Hindustan Aeronautics, which is expected to hold the first wage talks on 3 September.
About 1.57 million workers are employed at the country’s 214 Union government enterprises, excluding contract and casual workers.
About one-fourth of these employees are of the level of supervisors or executives whose salaries are governed by a separate wage structure, according to the recommendations of the justice M.J. Rao committee, which was set up in 2006; it submitted the report to the government around May last year.
Unlike Union government employees whose wages are fixed by the pay commission, salaries and perks of workers of central public undertakings are negotiated by trade unions and company managements directly.
According to the government’s Public Enterprises Survey 2007-08, wage bills went up 20% to Rs63,306 crore in the year from Rs52,586 crore in 2006-07.
But trade unions insist the number has grown because some of the companies made provisions on expectation of a salary increase.
An executive who works in Bhel, who did not want to be named because wage talks are still underway, said although fixed salaries are given to workers, the employees get an annual increment of about 2-3% and a so-called dearness allowance of 7-8% that is linked to inflation.
“This has an effect on overall payment because companies also have to make statutory payments, such as provident fund and non-statutory payments, such as house rent allowance,” the official said.
“There cannot be any compromise on the new settlement period which is five years,” H. Mahadevan, deputy general secretary of All India Trade Union Congress, said. “We are hoping that managements will agree. When they disagree, we will go for action and announce strike calls.”
Of India’s 214 public sector companies, 160 are profit-making while about 53 others are in the red. Total turnover of Central public sector enterprises during 2007-08 was Rs10.8 trillion, up 12% from Rs9.6 trillion in 2006-2007.
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