In a significant development, Tata Steel is all set to walk out of the Joint Bipartite Committee (JBC) for the coal industry that sets the wage increase for the coal workers. The company has been conducting independent wage negotiations with its unions for the 12,000 workers employed in the company’s coal mines. According to Tata Steel vice-president (human resources management) Niroop Mahanty, wage negotiations are in an advanced stage with the coal workers’ union and an agreement is likely to be finalised by the end of this month.

This will be the first time a wage agreement will be struck outside JBC. JBC has been for many years handling the wage negotiations for coal workers of Tata Steel and Coal India (three lakh workers). These negotiations typically took a long time to conclude and decisions were driven by political considerations. Tata Steel wanted to delink itself from this omnibus arrangement.

“We will decide the wages based on the financial position of the company and not driven by politics. We know what is in the interest of our workers and not someone sitting in New Delhi,” Mr Mahanty said. JBC is a not a statutory set-up and getting out of it will enable the company offer variable pay and a holistic package taking into account the quality of life and other welfare measures provided by the company, he added. Successful completion of independent wage negotiations with coal workers means a lot for Tata Steel. This could prompt the Tata Workers Union to follow suit.

At present, the Tata Workers’ Union, which looks after those working in the steel plant, conducts its wage negotiations through the National Joint Consultative Committee for Steel Industry (NJCC). The company has been trying to wean them away from it. While Mr Mahanty is confident of doing so, the Tata Workers’ Union is not all for it yet. RBB Singh, president, Tata Workers’ Union, Jamshedpur, feels that severing from NJCC would isolate the union and hurt its interest in the long run.

“The management’s intention is good today but that can change,” he said. But he refused to categorically state that the subject is closed hinting at the possibility of the union reconsidering the matter when the time is right. The present wage agreement for steel workers lasts till the end of 2006.