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Informist, Tuesday, Aug. 26, 2025

 

--Trade unions: Seeking at least INR 110,000/worker as bonus from Coal India

--Trade unions: May meet early Sept to finalise Coal India FY26 bonus amount 

--Trade unions: Will meet Coal India management Sept 22 to finalise FY26 bonus

 

By Avishek Rakshit

 

KOLKATA - Trade unions at Coal India Ltd. are likely to press for a festive bonus of at least INR 110,000 per worker for 2025-26 (Apr-Mar), which is to be paid by the Maharatna company latest by Sept. 27, trade union leaders told Informist. The demand for this annual bonus payment comes amid the company's falling profits and declining demand for coal.

 

Four central trade union leaders at Coal India are likely to meet early next month or hold virtual discussions to finalise the amount to be sought as festive bonus from the world's largest coal miner. "A meeting with senior Coal India officials is scheduled on Sept. 22 in New Delhi where the final bonus payable by the company will be discussed, but before that the trade unions will hold discussions among themselves and finalise the amount which will be demanded," D.D. Ramanandan, general secretary of All India Coal Workers' Federation, said. 

 

A second trade union leader based out of Coal India's lucrative eastern mining region said trade union leaders are likely to agree on a bonus not below INR 110,000 per worker. In case, the company agrees to pay this amount, it could lead to an outflow of nearly INR 23 billion. As on Mar. 31, Coal India had 205,134 workers on its rolls, down by around 4% on year. During FY25, Coal India had paid a total bonus amount of INR 17.6 billion to a total of 213,084 permanent workers.

 

Trade union leaders said that in FY25 Coal India had paid a bonus of INR 93,750 per worker which was a 9.6% on year rise as compared to the festive bonus of INR 85,000 in FY24. Coal India traditionally pays a performance-linked incentive to its on-roll workers every year which gets credited just before the onset of Durga Puja – the largest festival in east India. Both, company officials and trade unions usually term this ex-gratia payment as bonus. 

 

According to Coal India officials, the non-executive employees who are on the company's direct payroll, do not fall under the Payment of Bonus Act, 1965, as their salary exceeds the prescribed limits in the law. Thus, a performance-linked reward scheme is in place which translates into payment of a one-time ex-gratia which is traditionally negotiated and disbursed just before Durga Puja every year.

 

This performance-based reward, however, is agreed upon via collective bargaining between the trade unions and Coal India. A third trade union leader affiliated with the All India Trade Union Congress said of late Coal India has been insisting to disburse the bonus based on performance, but has not been able to do so on account of pressure from the trade unions. 

 

"There is a lot of ambiguity in calculating it, so collective bargaining is the best way to decide on this (bonus or ex-gratia) payment. Unless those ambiguities are addressed, it is difficult to implement the performance-linked scheme. So, this time as well, we will stick to collective bargaining only," the AITUC leader said.

 

Trade union leaders said despite the fall in profits of Coal India on account of lower coal demand, the state-owned company has been diversifying its operations and opening new avenues for future growth, including critical minerals mining, foray into thermal and solar energy, and fertiliser manufacturing. 

 

"As a result, although the profit is seemingly down, it is up when compared at the per capita level i.e. per worker as the workforce of the company is declining. On top of it, Coal India is increasing its assets arising from the diversification projects. So, there is no reason why Coal India cannot increase the bonus," Ramanandan said. 

 

Even as trade unions are set to press hard for a substantial increase in festive bonus, Coal India officials are reluctant to give in to their demands. 

 

"The bonus is linked to the performance of the company which has been weak on account of lower coal demand. We are also investing substantially in projects like building up first mile and last mile connectivity. So, the bonus this year will be decided judiciously via constructive discussion between the company and the trade unions," a senior Coal India official said. 

 

During the June quarter, Coal India reported a sharp on-year drop of over 20% in its consolidated net profit at INR 87.4 billion, because of a 4% year-on-year decline in sales volumes and moderating realisations from e-auctions. The drop in its Apr-Jun total sales volumes to 191 million tonnes dragged the company's consolidated revenue down by 4.4% to INR 358.4 billion and falling income from e-auctions added to the woes. 

 

According to the company official, the net impact of the bonus on the company's financial position may not be huge. For instance, in FY25, the total bonus outgo was lesser by 7.4% on year or INR 1.4 billion despite a near 10% increase in the bonus per worker. Staff expense is the single-largest cost overhead for Coal India comprising 44% of the total expenses.

 

"Every year, 10,000-15,000 permanent workers are retiring and we are filling up the vacancy partially to control costs and ensure higher productivity per worker. Thus, the total monetary outgo on workers in terms of bonus is kept under check," the company official said.

 

The official said that coal demand continues to remain muted currently and the monsoon rains have impacted production in key mining areas in east and central India. During Apr-Jul, Coal India's sales volume declined by 11.3% on year to 53.7 million tonnes and production plunged 15.6% on year to 46.4 million tonnes. 

 

At 1342 IST, shares of Coal India traded 1.3% down at INR 375.20 on the National Stock Exchange.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Vandana Hingorani

 

 

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