SAIL proposes 10% wage hike; unions demand 30%

State-owned Steel Authority of India (SAIL) has begun negotiations with various trade unions on wage revision for the 1.2 lakh strong work force. While trade unions are demanding a 30% hike—higher than a 22% hike they got five years ago—the company has proposed a 10% rise, a trade union member told moneycontrol.com.

The company declined to comment on the story, saying the negotiations were at a nascent stage.

Meanwhile, SAIL's wage bill in financial year 2012 was Rs 7633 crore and if the company bows to the unions' demands, the cost would increase by Rs 2287 crore. And given the slow progress on its expansion plans and weak demand as mentioned by the steel minister last month, it will be difficult for the state-run firm to agree to the unions' demands, said people who are part of the negotiations. The firm also cut down its employee strength from 1,07,841 (in Q3 FY12) to 1,06,004 in Q4FY12.
 
SAIL's chairman C.S Verma while reacting to the minister's observations had said that the company will increase production to 24 million tonnes from 14 million tonnes by June next year.

The company has indicated to the trade unions that hikes will be in accordance with its operating performance of the company as well as external factors. For instance, the ongoing slowdown in the economy, muted demand scenario will be the critical factors for the quantum of hike.

Trade unions, as has always been the case, are pressing for much more than what the management is willing to offer.
"Employees want a raise of around 30% and management has indicated a 10% hike. We had a meeting with SAIL management last month in which both parties put forward thoughts what they felt are appropriate," said a trade union member.

Echoing his views, Tapan Sen, general secretary of Centre of Indian Trade Unions (CITU) says certain pension related issues have also been raised. Without divulging details on what the employee expectations are, Sen said: "Be it any sector, there is always a disparity in what employees want, and what management has to offer."

Analysts who recently had a meeting with the SAIL management are skeptical about negotiations being concluded anytime soon. Analysts say since the revised salary was to come into effect in January this year, SAIL will have to keep a 7.5% provision in the June quarter as it did in the preceding quarter. "It will take at least six month for the negotiation process to be complete,"  Giriraj Daga from Nirmal Bang said.

Edelweiss too in its note has also mentioned that there management-employee negotiations are likely to be long drawn.

shaheen.mansuri@network18online.com