People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 11

March 11, 2012



A Charter for Dignity and Self-Respect


Jibon Roy


THE All India Coal Workers’ Federation (AICWF) well has the reason to believe that the latest national coal wage agreement (NCWA) have brought sufficient amount of satisfaction to our coal workers. Its biggest success has been that it brings some hope to contract workers who are the weakest section in the industry and some relief to other workers regarding post-retirement life.




As it stands now, the agreement guarantees 25 per cent minimum benefit on gross wages as on July 1, 2011, attracting consequential progressive increases in increment and other allowances like underground allowances, attendance bonus, special allowances etc. The agreement has ensured a further guaranteed benefit of 4 per cent on the new basic and this special allowance will be applicable to all coal workers. This benefit will also be extended to piece rate workers. Accordingly, the NCWA will provide a hike of 88 per cent in the basic and similar increases in all allowances which are paid in money form, such as allowances for transport, nursing and all kind of washing, thin seam and piece rate group allowances etc. House rent allowances will now be paid as percentages in lieu of lump sums and the rate will be 2 per cent. If all the consequential effects are taken together, including its impact over the life cover scheme, gratuity, provident fund and promised retiring benefits, the benefits from the agreement amount to more than 60 per cent of the basics.


Thus this settlement may set the pace for wage negotiations in all such industries where five years tenure of the last settlements have either expired or are likely to expire soon. But, most importantly, it has cleared all confusion in the public sector workers’ movement on the question of ‘periodicity’ of agreement. One may note that the movement stood divided on this issue during the course of the recent negotiation. Though the leaderships of major national trade union centres were originally in unanimity for some time, in the end all the trade union centres, except the CITU, got swayed by the deceptive notion that a longer tenure would mean better benefits. The way they finally accepted the ten years’ periodicity in major public sector industries, reminded one of Lenin’s perception about trade unions being marred by spontaneity. In such a case, a trade union leadership often gets carried away by the vocal sections who basically represent a backward and selfish consciousness. Now, even if the risks associated with a longer periodicity is ignored, a comparison of agreements with two sets of periodicity shows that a smaller tenure fetches more relief than an agreement signed a ten years term. In the context of high inflation rates and a volatile polity, a longer duration agreement always carries more risks for the working class.


The coal sector experience has been that if the minimum guaranteed benefit is 24 per cent in the first five years, the next five years would add 25 per cent over the gross, which would be 88 per cent over the emoluments drawn at the end of the preceding five years plus all the corollary accruals. Moreover, to calculate the real benefit, one has to add 4 per cent that would be guaranteed for all the workers as special pay.




Further, in long term perspective, the NCWA has contributed to widening the class unity. If the Indian trade union movement has to look beyond the horizon and come out of narrow rut of economism, the latest settlement is a modest beginning. Most of the wage settlements so far were restricted mainly to immediate economic benefits for permanent workers, and despite repeated pleadings by the CITU, few trade unions showed interest in mobilising the permanent workers to take up the issues of contract workers. The result was that the latter did not find any prominence in the negotiations. However, the contract workers are not something outside the industry.


The coal workers’ movement had hitherto failed to take up the issues concerning the post-retirement benefits and other such issues. It is hard to believe that the trade union movement failing to create social guarantee for the education of average coal workers’ children, despite the fact that this section represents the most depressed and backward section of Indian workers in the organised sector of industries. One may note that while the industry make fully reimbursements in case of children getting higher and technical education, it did not make any reimbursement in case of those who studying up to XII Standard. It is in such a scenario that the latest agreement has fetched post-retirement benefits including medical allowance and improvements in the existing rate of pension as the third retirement benefit.


Since the agreement has brought substantial reliefs to workers, some sections of trade union leaders are trying to grab credit for the negotiations. But, to the AICWF, the basic reason behind the success is fact workers were roused with a sense of dignity, to which process the AICWF made its modest contribution. Its role has not only raised the workers’ sense of dignity, its class orientation also brought them some substantial financial reliefs. It was the CITU-led AICWF that single-handedly organised the nationwide coal strike of May 5, 2009, which initiated a process of consolidation and it culminated in the total strike of October 10, 2011 on bonus issue.


However, any electrifying strike cannot take place in a massive industry only on economic issues, unless the workers are adequately charged with feelings of dignity and self-respect. It is to the credit of the CITU that it effectively injected this sense into the negotiation process.




Looking at the offer made on post-retirement benefits, one finds that the new commitments will take the post-retirement benefits to around 30 per cent, at par with the executives’ emoluments.


Some of the new provisions regarding social securities are as follows:


Section 9.1.0: The existing life cover scheme will continue but the amount to be paid in addition to the normal gratuity shall be Rs 1,12,800, applicable since February 1, 2012


Section 9.2.6: In addition to the compensation payable under the Workmen’s Compensation Act, an ex gratia amount of Rs 84,600 will be paid in case of death or permanent disablement occurring on account of an accident arising out of and in course of employment.


Section 9.2.7: An amount of Rs 5 lakh will be paid to the next of kin of any employee who dies due to a fatal mine accident.


The provisions made for the post-retirement medical allowance and revival of the existing pension fund are not ordinary either:


Section 13.8.0: A post-retirement medicare scheme for retired non-executives and their spouses will be finalised by a committee on the SAIL pattern or otherwise within three months. It may be mentioned that this is an improvement over the decision taken in the first JBCCI meeting that retirees will be entitled to avail the facilities of a company’s hospital facilities.


Section 13.9.0: An actuary has been appointed and after he submits his report, a committee will examine it and make recommendation including on the contribution from both sides.


The way the agreement has bound the employers to take a fair view on the wages and social benefits, has its appeal beyond the coal sector, to the entire organised sector. The All India Coal Workers’ Federation is of the opinion that unless there is an improvement in the contract workers’ wages, the real wage of coal workers will continue declining in the same percentage as that of the retiring workers. The provision made for the contract workers is significant in this context. It is all the more important in view of the fact that at present more than 50 per cent of the annual coal production takes place through contractors. The recent coal industry agreement is the first for a public sector company to make positive provisions on the matter of the contractor workers’ wages and service conditions. A positive aspect is as follows:


Section 13.7.0: A high power committee would make recommendations on the minimum wages and social security measures for contract workers engaged in mining operations by the contractor. In the last meeting the management offered Rs 367, Rs 387 and Rs 430 for the unskilled, skilled and highty skilled workers respectively on the basis of a mid-point formula. Now the issue will be deliberated in the ensuing meeting and the recommendation sent to the ministry within three months.


However, it would be an exaggerated expectation that by itself this provision would end the agony of contractor workers, unless there is no organisational guarantee. The agreement will get fructified only when contract workers are mobilised and when powerful support for them from permanent workers is ensured. Accomplishing this task would be the greatest trial today for the AICWF leadership.


Apart from setting the pace for ongoing and future negotiations in public sector, this agreement has also challenged the creation of wage differentials through categorisation of workforce in BPE notifications and its restructuring in compartments --- a tactic that has attained some success. Also, it has a value for conducting a united campaign for common standard for determination of coal workers’ wages and fringe benefits, standardisation of existing benefits, and determination of differentials between the wages of executive and non-executive on the one hand and between the wages of contract and permanent workers on the other.