Permission for loss making subsidiaries of Coal India Ltd. (CIL) to adopt 2007 pay revision as an exception to the prescribed affordability clause and payment of Performance Related Pay (PRP) to executives and non-unionised supervisors of all subsidiaries of CIL

No: --- Dated: Oct, 14 2015

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi, has approved the recommendations of the Committee of Secretaries to regularize the 2007 Pay Revision implemented by Coal India Limited (CIL) with effect from 01.01.2007 in the loss making subsidiaries. This is being allowed as a special dispensation to CIL. However, this special dispensation to CIL will not be cited as a precedent by other loss making Central Public Sector Enterprises (CPSEs).

The Cabinet also approved the payment of Performance Related Pay (PRP) to executives and non-unionised supervisors of CIL and its subsidiaries. The payment would be out of the corpus created by pooling the profits of CIL subsidiary companies, duly setting off the losses of the loss making subsidiaries and stand-alone profits of CIL, excluding dividends received from its subsidiary companies. This will be with the condition that the corpus for payment of PRP should be treated as a yearly corpus with no provision for carrying it forward to subsequent years.

This would ensure equity among executives who are transferable, across the subsidiaries companies, and would also help in keeping up the morale of executives working in loss making CPSEs and CPMDIL.

Background:

CIL was formed by the Government of India as a holding company in September 1975 with five subsidiary companies. The policy regarding recruitment/appointment, posting, inter-company transfer and other personnel related issues of all executives of CIL and its eight subsidiary companies are centrally administered by CIL, the holding company. As such, all executives in CIL and its subsidiaries are drawn from a common centralized cadre and they are all considered to be employees of the holding company that is CIL.