Our minimum cost to a worker is Rs 6 lakh per year

Written by Indronil Roychowdhury | Updated: Sep 26 2013, 01:49am hrs
Trade unions are opposing the governments proposal to go for a second round of disinvestment in Coal India Ltd. While there have been rounds of meeting between the government and the trade unions on the issue, the CIL management has also taken up the task of persuading the unions. CIL director personnel R Mohan Das, who has the lead role in dealing with the trade unions on behalf of the company, speaks to FEs

Indronil Roychowdhury about trade unionism in CIL and the changes the management has been pushing in the company despite strong trade union activities.

What is the latest about the trade unions stand on the disinvestment issue

The trade unions are simply against the disinvestment and they are not even agreeing to the proposal of a 5% disinvestment. They say they understand the governments compulsions and are not opposed to any other means of raising money, like asking for a special dividend from the company. There are talks going on at the informal levels. I dont really say the trade unions have softened their stance, but we will have to find out ways of going about with it.

But why are the Unions opposed to the disinvestment The management control remains with the government.

When Coal India was nationalised, it was 100% government controlled. There was no contract labour or private operator. The company was not driven by profit motive alone and there were a lot of social obligations to be met. With disinvestment, Coal India has become answerable to the public shareholders and increasing profitability has become the prime concern of the company since it has to realise the maximum value of its shares. Some shareholders have even demanded selling coal at international prices without offering any discount. So when a company needs to focus on profitability, it has to change a lot in its operational pattern. CIL has adopted outsourcing and deployment of private operators for mechanising its mines. Such practices were not prevalent at the time of nationalisation. There has been a huge deviation from what nationalisation intended. Such measures certainly alarm trade unions and they feel they have to put a check on such changes. But changes happen and we need to ensure that it happens in a right way through a process of consultation. Disinvestment has made the company more accountable to the public and this ensures more transparency in the system. But now rights are not only with the workers but also with the shareholders at large.

So, does the management have to face stiff opposition from trade unions when introducing any change

I would say the trade unions of Coal India are very responsible and we didnt really have any huge strikes so far that affected our production and the countrys economy. Coal India has a very good system of dealing with the trade unions and at each level there are various committees comprising trade union representatives. At the Coal India level, we have the apex joint consultative committee comprising all the top management and the top representatives of the trade unions. Then we have the standardisation committee, the wage negotiation committee and so many other committees at Coal India, subsidiary, area and mine levels. So we are always in a consultation process, which doesnt create a communication gap. Maximum problems are solved at various committee levels. You see we could complete our last wage negotiation in six months since the management shared a cordial relationship with all the trade unions.

What is your ratio of outsourcing

It is 50:50 now. In some open cast mines we only outsource the over burden removal and coal is mined by us. In some mines, we do the over burden removal and coal mining is outsourced. Outsourcing help in increasing production because such operators bring equipment with them. Output per man shift in outsourced open cast mine is somewhere around seven (units) whereas in departmental mines it is around four. In underground mines it is less than one, and all underground mines are departmental. So outsourcing has helped increase our productivity. Besides it has helped reduce our production cost through a decrease in the cost of labour. Departmental labour cost is around 48% of the cost of production whereas it is one-third in the case of outsourcing. Our minimum cost to a worker is around Rs 6 lakh per annum. This is far below for workers under a contractor.

CIL is already in a mode of rationalising its workforce. Does it mean comparatively more outsourcing

Every year we have 16,000-17,000 people retiring, but we are inducting around 4,000-5,000 every year, including employment given to those who have lost their land to mining and on compassionate grounds. So far we have employed 75,000 from land-lost families. This is the major component of induction at the workers level. We are adding every year between 800 and 1,000 officers through open recruitment. Workmen are appointed at the subsidiary level and officers are appointed at the CIL level. So our new appointments are far less than the number of retirements, which is automatically rationalising our workforce.

It is heard that there is huge attrition at the management level in CIL, especially by those who have come from IIT and IIMs

It is not true. We have appointed around 4,300 from IITs, NITs and other campuses over the last four years and the attrition rate is around 9-9.5%. This is not an alarming rate. For any industry, an attrition rate of up to 20% is alright. And people who are moving out are mainly joining civil services. It is not that people are opting for other PSU jobs. Salary-wise, CIL is among the highest paying PSUs and our allowances are at least 29% more than those of ONGC, NTPC and other oil companies. Our performance related pay (PRP) is also the highest because of the huge profit we make. So whatever attrition we have is not for salary. The issue is about working condition. A job in the mining sector is hazardous and even management executives have to go to the field and work under tough situations. Some of the younger generation wanting to avoid tough working conditions may look for a different job.

But CIL is not paying PRP for the last six years.

PRP is based on the profit and every company pays 5% of its profit as PRP. So with CIL making a profit of around R24,000 our PRP is huge. But the department of public sector enterprise is against giving PRP to our loss-making subsidiaries and the government will need to solve this issue. Since the holding company controls all our executives, we are saying that PRP should be given on the profit of the holding company and not on the basis of a subsidiaries profit or loss. We have loss-making subsidiaries like Eastern Coalfields Ltd and a manager posted there will be deprived of PRP. We are talking to the government and the government has to solve this. Workers pay across subsidiaries, irrespective of whether their financial performance, is uniform, so it should be the same for officers. We cannot follow two different policies for workers and officers. The ministry is agreeing to us, but the department of public sector enterprise has its reservations.