Informist, Friday, Oct. 4, 2024
--Coal India official: To pay INR 17.6 bln as bonus to workers by Wed
--Coal India official: To pay bonus of INR 93,750 per worker for FY25
--Coal India official: Bonus per worker up 9.6% on year in FY25
--Coal India official: FY25 bonus outgo dn on fewer permanent workers
By Avishek Rakshit
KOLKATA – State-owned Coal India Ltd. has signed an agreement with its workers to disburse a total of INR 17.6 billion as festival bonus for financial year 2024-25 (Apr-Mar) by Wednesday, a senior company official told Informist. "After detailed negotiations with the trade unions, we have concluded the agreement with the workers, providing them an ex-gratia amount of INR 93,750 per worker which will be paid on or before Shashthi," the company official said.
'Shashthi' refers to the sixth day of Durga Puja festivities, celebrated widely in eastern India. Historically, Coal India has always paid the bonus to its workers by the seventh day of the festivities.
The bonus per non-executive staff this year is up 9.6% over last year, when Coal India paid INR 85,500 per worker. For FY23, the Maharatna company had paid INR 76,500 per worker as bonus. The bonus is applicable to the entire permanent workforce engaged in Coal India's mining activities, and the Telengana government-owned Singareni Collieries Co. Ltd.
However, the total outgo towards the ex-gratia payment disbursed to the company's workers is lower by around INR 1.4 billion, or 7.4%, compared to the last financial year.
"It is because every year, 10,000-15,000 permanent mine workers are retiring, and we are not filling up the vacancy entirely. Thus, the total (monetary) outgo on workers is either getting controlled, or is reducing," the company official said.
During the financial year ended March, Coal India had 213,084 permanent workers, 4.4% lower than in the previous year. In FY23, the headcount of non-executive staff was 222,905. Even as 9,821 non-executive staff retired in the last financial year, Coal India recruited only 129 non-executive staff. In the coming years, the company is expected to maintain this trend of lowering the count of its non-executive employees.
The senior official reasoned that it was being done as the productivity of contractual workers was much higher than permanent workers, and the outgo on contractual workers was also lower. For years, trade unions in Coal India have been protesting against the company's move, but to no avail.
As a result of lowering the headcount, Coal India's outgo on employee benefit expenses, which include wages, fell 1.3% on year to INR 487.8 billion in FY24. This was despite the company raising workers' wages 19% in January 2023. The company's expenses on its employees is its single-largest cost overhead and usually accounts for around 48% of its total annual costs.
Although the payout to workers is termed a bonus, it is an ex-gratia payment negotiated between the management of Coal India and Singareni Collieries on the one hand, and the mine workers of both companies, as the other party.
"Our workers don't fall within the purview of the Payment of Bonus Act, 1965, but the workers deserve a one-time ex-gratia payment every year for their services. It is historically given during the festivities in east India, which coincides with Durga Puja," the Coal India senior executive said.
For years, Coal India has been trying to introduce a performance-linked reward scheme for workers, but hasn't been able to do so in the face of stiff opposition from trade unions, who argue that the parameters for introducing such a scheme are not correctly laid down.
The monetary outgo on ex-gratia payment comes at a time when Coal India is laden with a huge unsold inventory of around 65 million tonnes at its pitheads, and its sales volume declined 1.4% year-on-year in September to 54.4 million tonnes. The decline in sales volume could lead to falling revenues for the month. Production also fell 1% in September to 50.9 million tonnes.
However, brokerage firm Emkay Global Financial Services Ltd., which has a buy rating on Coal India, said in a report that the coal miner had enough time and seasonality-led tailwinds to catch up on production. Usually, Coal India's sales and production are hit during the monsoon, before rising during the winter and early summer.
At 1512 IST, shares of Coal India were down 0.9% at INR 497.50 on the National Stock Exchange. End
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