Tata Steel on Saturday signed a memoranda of settlement with Tata Workers’ Union (TWU) regarding wage revision and other issues for around 16,500 of its employees covered by its last settlement in December 2001.

The new wage settlement with its recognised union is the first since the steel major came out of the National Joint Committee for Steel Industry (NJCSI), the industry-wide wage agreement body.

In line with the new settlement signed on Saturday, which runs for a period of 10 years to December 31, 2016, the revised new minimum monthly wage (with merged dearness allowance) of its workmen and supervisors will be Rs 8,080 and Rs 12,720, respectively.

While the company could not provide information on the incremental impact the new agreement will have on its monthly

wage bill, it said it had revised its existing rates of increment for its lowest (R-1) and highest (N-20) supervisory grade from Rs 80 and Rs 320 per month to Rs 243 and Rs 440 per month at the minimum of the respective grades, and Rs 378 and Rs 685 per month at the highest end of the grades.

On a percent basis, the revision works out at 3% of the employee’s basic pay on a cumulative basis, subject to a maximum of 3% of the basic salary at the maximum of each grade.

Thus while the minimum basic salary of the company’s lowest workman grade (R-1) will go up to Rs 8,080 from Rs 4,000 per month, the maximum increase in the basic pay of its highest supervisory grade (N-20) will go up to Rs 22,810 from Rs 13,650.

The wage agreement, signed by Tata Steel managing director B Muthuraman and TWU president Raghunath Pandey in the presence of the deputy labour commissioner and other senior executives of the company and TWU office bearers, also hiked the minimum house rent from Rs 210 to Rs 400 per month.

Speaking to FE, TWU president Raghunath Pandey said the agreement would benefit around 16,500 workers of the steel major here.

Pandey, who said the unionised workers have been guaranteed a minimum of 33% increase over their basic wage as on December 31, 2006, added that arrears of the revised wages will be disbursed in three installments commencing January, April and August 2009.