SETTLEMENT OF CEMENT INDUSTRY – A SIGNIFICANT ACHIEVEMENT

DILIP MAJUMDER

There has been a tradition of extending over five decades to have a nation-wide wage settlement in the Cement Industry in the country, beginning with the First and Second Wage Board for the Cement Industry and thereafter first and second National Arbitration in the Industry. First Board of Arbitration gave an unanimous award on 26.01.1978 which remained effective for three years w.e.f. 01.10.1978. A similar Arbitration award by the Second Board of Arbitration was given on 11th July, 1983 which remained effective from 1st January, 1982 to 30th June 1986.

After the failure of third arbitration in 1989, the Cement Manufacturers’ Association (CMA) and the unions continued bipartite negotiations and a settlement was arrived at before the Chief Labour Commissioner (Central) on 10th May 1989 which remained valid up to 31st March 1992. Thereafter through tripartite negotiations four more national level settlements were signed in 1992, 1996, 2000 and 2005. The latest one the 5th National tri-partite settlement have been signed before the Chief Labour Commissioner (Central) on 11th February 2011.

National level wage settlements are made in various central public sector undertakings. But the wage settlement in cement industry is having altogether a different characteristic. It is a settlement basically for the workers employed mostly in the private sector and includes regular and contract workmen. There is, as such, no industry in the country where nation-wide settlement of disputes for private sector workers or contract workers takes place. It is therefore very much a unique feature.

Traditionally the settlement is taking place in the industry after elaborate discussion in the bi-partite and then in the tri-partite level by and between the Cement Manufacturers’ Association (CMA) and the Central Trade Unions like INTUC, BMS, HMS, AITUC and CITU.

SALIENT FEATURES OF THE 5TH NATIONAL TRI-PARTITE SETTLEMENT

As per the present settlement, the total wage rise shall be to the tune of Rs. 3500/- payable in two stages, 60% i.e. Rs. 2100/- w.e.f. 1st April 2010 and the remaining 40% i.e. Rs. 1400/- w.e.f. 1st April 2012. 30% of the total increase shall be added to the basic wage while the remaining 70% shall be paid in the form of Education, Conveyance, Periodical and Leave Travel Allowances. Incidentally, in the 4th National tri-partite settlement, the total wage rise was Rs. 1500/- only which was paid in 4 stages.

There was as such no rise in the rate of increment during the 4th National tri-partite settlement, but in the present settlement, the rate has been increased by Rs. 12/- and the minimum and maximum rate of increment stand revised to Rs.40/- and Rs.152/-.

The Fixed Dearness Allowance & Variable Dearness Allowance has not undergone any change. FDA continues to remain at Rs. 4478/-. The demand of full neutralization of DA could not be achieved and VDA remained at the same level of Rs. 2.25 per point rise or fall in the All India Consumers Price Index (AICPI) and as on 01.04.2010 at AICPI 3896, VDA was Rs. 2,954.25.

This time the tenure of the settlement could be reduced from 5 to 4 years and shall remain effective from 1st April 2010 to 31st March 2014.

COVERAGE

On the question of coverage, the understandings arrived at by and between the parties during Second Arbitration Award have not undergone any change in the subsequent tri-partite settlements and in all four previous settlements it was specifically mentioned that “All categories of workers who have been covered by the Second Arbitration Award shall continue to be covered by this settlement”. But the practical situation was different, the national level wage settlements remained on paper in many cement plants, mainly grinding units, set up in various parts of our country after 2000. The manufacturers started arguing that the so called Grinding Units not being composite plants are not within the coverage of the 2nd Arbitration Award.

Struggles launched by workers of various such plants in the country could not pursue the managements to get the settlement implemented in true spirit. The workers of Ultra Tech Cement Ltd.’s West Bengal Cement Works at Durgapur launched a vigorous struggle and their heroic struggle of 74 days strike even could not force the management to implement the national settlement though they were legally entitled for all the benefits which is revealed from the relevant provisions of the Second Arbitration Award. The award have dealt exhaustively on the issue of coverage in para 49 to 51 of the award, which is reproduced below for general awareness.

49. At the beginning of the general hearing the question of coverage was raised by both the sides. After some argument there was a general agreement between the parties before us to the effect that all those categories of employees whether working in the various units in the country now or those to be set up in the future – (including factories, mines, contract labour and transport and offices) – covered by the First Wage Board for Cement Industry (1959) should also be covered by our award in the present reference.

50. It is therefore necessary to reproduce the relevant extract from the First Wage Board for Cement Industry in this regard :

13.1.1 Our recommendation should apply to workers employed at the cement factories and at the at the lime-stone quarries owned by the cement producers or supplying bulk of their output to cement factories and to workers employed by the cement producers in the transport of limestone from the quarries to the factory. They should similarly apply to workers employed at places where calcareous sand or shells are collected and clay is excavated, and to workers employed by the cement producers in transporting these raw materials to the factory.

13.1.2 Our recommendations should apply to workers employed directly or through contractors. Our recommendations donot cover workers employed by contractors where such workers are engaged on construction work and on purely temporary jobs, not connected with the manufacturing process.

13.1.3 Our recommendations should apply to all cement factory (and to the quarries etc. mentioned in para 13.1.1) throughout India whether the factories are already in production or will come in to production in future.

51. Thus the agreement between the parties before us covers practically the whole lot of workmen employed in the Industry. Therefore we are happy that the major part of the problem relating to coverage has thus been solved by agreement and WE AWARD ACCORDINGLY.

The heroic struggle of the Ultra Tech workers naturally came up during the current level of discussions and after long deliberation, it has now been mentioned at paragraph 5 of the settlement that “All categories of workers who have been covered by the Second Arbitration Award shall continue to be covered by this settlement including Grinding Units”. This is a major achievement in the present agreement.

ISSUES OF CONCERN & TASKS AHEAD

It is pertinent to mention here that the number of companies authorizing CMA to represent them on their behalf at the negotiations with the Central TUs is gradually decreasing. Last time during the 4th National tri-partite settlement, there were as many as 45 companies authorizing CMA which has come down to 23 now. Big players like ACC Ltd., Gujarat Ambuja (Now Holcim), Lafarge (Excepting its Arasmeta Cement Unit) and J K Cements have opted to remain out of the purview of the settlement. This is an alarming development requiring intervention of the Central Trade Unions.

The plight of the workers of mini-cement plants requires a special mention. In the previously referred 2nd Arbitration Award of July 1983, on the question of mini-cement plants, it was stated vide paragraph 86 of the award, “ In view of the fact that there are not many mini cement plants under production now, we are unable to determine their capacity to pay and other relevant details. We should wait till the mini cement plants go into production for some period, assess their capabilities and then decide their case.

For the present, we would prefer to leave them alone”. Basically in order to reduce transportation as well as capital cost, setting up of Mini Cement Plants in dispersed locations across the country began in the early 1980s and their number as on date is 365 and their capacity aggregates about 11.1 million tones contributing about 7% of the indigenous cement production. The main attraction of mini-cement plants is the lower capital costs per tone of capacity as compared to large plants. Against the requirement of Rs. 3500 + per tone of capacity of large plants, capital costs for mini-cement plants come to about Rs. 1400 -1600 per tone. This reduces to a large extent the fixed cost per tone of cement produced. Also, as the main market is in the vicinity of a mini-cement plant, savings are large on transportation costs.

All these benefits coupled with several other concessions granted by Central and State Governments to such small scale units, the profitability of mini-cement plants is enormous. In spite of all these, the workers in these factories are subjected to most inhuman working conditions and meager wages. The provisions of labour laws are deliberately flouted and the trade union movement across the country has a lot to do in this sector. The wage and other service conditions of the workers of mini-cement plants could not be taken up in the national forum and it is essential to organize such workers and launch movements initially in the state level for the just cause. The present settlement is limited to the large size cement plants only. There are as many as 148 numbers of such plants in the country now. This settlement was so long applicable to mainly the so called integrated units and the national wage settlement was unavailable for the workers of most of the cement grinding units across the country.

Now mainly due to tireless efforts of CITU leadership in the national bipartite and tripartite meetings, it was possible to specifically mention the name of Grinding Units within the coverage of applicability of the settlement. It has thus paved the way to organize movement in all such plants for implementation of this national settlement for regular as well as contract workers. Similarly in the case of contractor workers, unions have to face implementation of coverage as per provision of second arbitration award. Chief Labour Commissioner direction in his circular dt. 8.4.2010 all RLC will help in taking up strongly this issue thought available dispute conciliation mechanisms.

Courtesy: www.citucentre.org/