Recent Memorandum of Understanding (MoU) entered into between the federation of major trade unions, including INTUC and AITUC and the Cement Manufacturers’ Association (CMA), which represents cement companies is expected to increase in the labour cost for the cement manufacturers which they may have to pass on to the consumers by hiking the price of the commodity. The MoU signed between the two parties which is for a duration of four years from April 1, 2018 to March 31, 2022, enhances the pay and other benefits of the employees in the sector.
The new agreement signed between the two parties provides for an increase of Rs5,000/month in the gross pay of cement companies workers (to be paid in two instalments of Rs2,500 each (April 1, 2018 and April 1, 2020). The MoU also provides for enhanced dearness allowance, service weightage benefits and other benefits. Arrears for 10 months will be paid in two instalments.
However, the cement manufacturers are little relieved over the new agreemnt as in the previous agreement which was signed in in Aug’15 (for 4 years w.e.f. Apr’14), gross pay was increased by Rs6,000/month (33% hike) in two equal instalments. Compared to that this hike is considerably less after considering the inflation effect. Wage hike is applicable to contract workers also but excludes casual workers.
Last time in 2015 when wage revision agreement was signed cement manufacturers had resorted to price hike to the extent of Rs 5-7 per bag to pass on the cost impact to the consumers. Hike was more in North and Central region. This time too the cement manufacturers are likely to increase the price to pass on the increased cost to the consumers.