Tata Steel hikes salaries at Jamshedpur

MUMBAI: At a time when steel companies globally are cutting production and actively considering reducing total employee strength, Tata Steel has revised upward the salaries payable to its employees while also doubling the minimum wage structure for employees at its Jamshedpur unit.

The move comes a month after the steelmaker signed a bonus agreement with its Jamshedpur employees where the annual bonus amounted to 20% of the wages paid in 2007-2008. In a statement issued on Saturday, Tata Steel said that the revised wage agreement, signed with Tata Workers' Union, was for employees of the Jamshedpur unit including the tubes division, and that the period of operation for the revised wage agreement would be for 10 years till 2017.

Tata Steel's agreement would cover workmen and supervisors who were earlier covered by a previous settlement in December 2001, when the Indian steel industry was also going through downturn after a blanket ban imposed by US, then the world's largest steel consumer.

According to the agreement, the existing flat rate of increment would be revised to 3% of the basic salary of the employee on a cumulative basis. The minimum basic of the lowest workmen grade has been doubled to Rs 8,080 per month from Rs 4,000.
In September, Tata Steel signed a memorandum of settlement with the Tata Workers' Union for the 2007-08 annual bonus, a total payout of about Rs 114 crore. The company also extended the settlement period by a year, taking the total term to six years, which means that the company's bonus each year would be at 20%.

A slowing demand and unavailability of credit has led most companies, including steel firms, to cut production globally. According to international surveys, steel consumption has been on a weakening trend since mid-2008 and is expected to decline in the first half of 2009, with the worst affected users being construction and automotive.

The wage agreement with Tata Workers' Union, also follows reports that company's pension funds for its unit Corus, has a surplus of 500 million pounds (about Rs 5,000 crore) for the quarter ended June. It is likely to be higher in the September quarter, said Tata Steel.