State-owned Coal India Ltd (CIL) said on Wednesday it expects the collective bargaining agreement (NCWA-XI) to be finalized within a month, which would benefit its 2.38 lakh non-executive workers. The wages of non-executive employees, who make up 94 percent of Coal India’s workforce, are reviewed every five years.

The increase is due from July 2021.

In 2017, CIL signed a collective agreement with the unions that provided for a 20 percent increase in wages for five years.

In a statement, CIL said: “The company hopes to complete the eleventh version of the National Coal Wage Agreement (NCWA-XI) within a month, which will benefit its 2.38 lakh non-senior workforce. The next round of talks is scheduled for May 19, 2023.”

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The company went on to say that the proposal had a “significant effect” on its earnings after tax (PAT) for the fourth quarter of fiscal 2023, and excluding the provision for NCWA-XI payroll costs, the company’s PAT would be in January-March of FY23 was around Rs.9,920 crores, an all-time high for any quarter to date. On May 7, the world’s largest coal mining company reported a 17.7 percent fall in its March-quarter net income due to higher provisions for employee payroll revisions.

Consolidated net income for the January-March period was 5,527.62 crore, or Rs.8.98 per share, compared to 6,715 crore, or Rs.10.86 per share, in the same period last year, according to the company’s stock filing documents. “Although operating performance reached an all-time high in the final quarter of FY2023, the primary reason for the decline in consolidated PAT was the huge provision of Rs.5,870 crore recorded in the quarter ended 31st March FY23.”

“Of the total provision of Rs. 8,153 crores charged to the income statement due to FY23 payroll revision, the latest quarter alone accounted for 72 percent at Rs. 5,870 crores,” the company said. Such a large provision was required in the quarter because the company signed a letter of intent under the Pay Pact recommending a guaranteed minimum benefit of 19 percent after the third quarter of fiscal 23, the company said.

With only other allowances to be agreed, the earliest a handshake between management and the unions on the NCWA-XI would ease the pressure. The company’s bottom line would remain stable in subsequent quarters with no need for accruals in the accounts.