India Cements Signs Wage Pact With Trade Unions Amid Industry-Wide Stalemate

India Cements' wage pact with unions is perhaps the first time that the industry is seeing a company-specific agreement.

<div class="paragraphs"><p>(Source: Pixabay)</p></div>
(Source: Pixabay)

Breaking away from the past, the N Srinivasan-headed The India Cements Ltd. has independently chosen to sign a wage pact with its unions.

“For the last 30 years, I have been negotiating on behalf of the cement industry with all the central trade unions," Srinivasan, vice chairman and managing director at the southern cement maker, said in a statement. "As reaching a consensus is taking time, we have now entered into the 12(3) settlement with our unions for the benefit of employees in all our plants.”

Since 1992, the cement sector has negotiated a common industry wage agreement. India Cements' decision may force peers to go for similar agreements. While central trade unions may not like this, the move also risks triggering wage disparity in the industry. And in the current cost-push inflation, the industry could be better off without that. 

The industry is due for a fresh wage arrangement as the existing accord expires in April. Srinivasan had been spearheading negotiations with the central unions on behalf of the cement industry, and concluded seven pacts till 2018.

The last round of industry-wide talks was held some time ago in Chennai. But the discussions remained inconclusive. The unions—six in all—insisted that the issue of temporary workers be resolved first before deliberating on a fresh wage pact.

A significant portion of the workers in the industry are on contract, according to Nishit Chaudhary, who is the convenor of the cement co-ordination committee. Similar pay for similar jobs is what the unions are demanding, irrespective of the permanent or temporary tag, he said.

Rising cost pressures and demand instability are giving a new dimension to the industrial relation in the industry.

India Cements' wage pact, however, has taken the central unions by surprise. They would take stock of the situation individually in their respective forums and decide on a collective action for the way forward, Chaudhary said, over the phone. He indicated that the unions could move the Central Labour Commissioner for a resolution to the issue.

What India Cements Has Agreed To

The cement-maker signed a new wage settlement pact under Section 12(3) of the Industrial Disputes Act with the representatives of INTUC, LPF, CITU, MDMK and internal unions in the company’s plants.

The four-year wage agreement is effective from April 1 and provides for:

  • A total increase of Rs 5,000 a month for 500 workmen employed in all the 10 cement plants of the company.

  • A variable dearness allowance payable from Rs 2.55 per point in consumer price index (1960 series) to Rs 2.75 per point. This is expected to fetch an additional Rs 5,000 a month per head at the end of the settlement period. 

India Cements has also announced a new floater mediclaim policy offering Rs 3 lakh cover to every employee covered by the agreement. The premium amount will be paid by the company. This will entail an outgo of Rs 1.65 crore per annum for the company.