Salary system of eastern coalfields limited

Power For All Eastern Coalfields Limited (A Subsidiary Of Coal India Limited)

PROJECT REPORT

ON

SALARY SYSTEM OF EASTERN COALFIELDS LIMITED

FOR

SUBMISSION IN THE PARTIAL FULFILLMENT OF THE REQUIREMENT OF FULL TIME MBA PROGRAMME

2002-04

Submitted by: Submitted to:

Name: Harneet Tejinder Singh Ms. Swati Singhal

Roll no.: 14/MBA/RDIAS/02 Project Guide

RUKMINI DEVI INSTITUTE OF ADVANCED STUDIES

1MBA, RDIAS G.G.S.I.P. UNIV. HARNEET TEJINDER SINGH


ACKNOWLEDGEMENT

First of all I would like to thanks Rukmini Devi Institute of Advanced Studies for giving me the

opportunity to do my winter training in Eastern Coalfields Limited. I would like to thank

Ms. Swati Singhal (Poject Guide) for her valuable guidance and support throughout my project.

With immense pleasure I pay my gratitude to the Management of Eastern Coalfields Limited for

their wholehearted Co-operation and guidance. The amicable and nurturing ambience provided

by them has really made the Winter Training a pleasant experience.

I would like to thank my project guide Mr. Partha Banerjee (Head-Finance), for his valuable

guidance and support throughout the project.

I would also like to thank Mr. Sapan Sarkar (P.A. to C.G.M) for providing his invaluable help

and all the necessary inputs from time to time throughout my training. Their help and guidance is

the key to successful completion of this project.



CERTIFICATE

This is to certify that Ms.HARNEET TEJINDER SINGH of M.B.A (FT)-4th

Semester, Batch 2002-2004, Roll No 14/RDMB/2002, has undertaken a project on

“SALARY SYSTEM OF EASTERN COALFIELDS LIMITED” and completed

the work under my supervision. I am satisfied with the project report submitted.

SWATI SINGHAL

Faculty-RDIAS



EXECUTIVE SUMMARY

COAL is the most important and abundant fossil fuel in India. It accounts for 63% of the country's

energy need. India is the 3rd largest coal producing country.

Salary system of executives of ECL consists of

Basic salary

GradePre-Revised Scales of Pay

(01.01.1992 to 31.12.1996)

Revised Scale w.e.f

01.01.1997

E1 Rs. 4000 – 7150 Rs. 8600 - 250 - 14600

E2 Rs. 5000 – 8275 Rs. 10750 - 300 - 16750

E3 Rs. 6000 – 9425 Rs. 13750 - 350 - 18700

E4 Rs. 7000 – 9600 Rs. 16000 - 400 - 20800

E5 Rs. 7500 – 9900 Rs. 17500 - 400 - 22300

M1 Rs. 8250 – 10050 Rs. 18500 - 450 - 23900

M2 Rs. 9000 – 10500 Rs. 19500 - 500 - 25000

M3 Rs. 9500 – 11500 Rs. 20500 - 500 - 26500

INCREMENTS

(a) The anniversary date of increment will be 1st April

DA @29.3% of basic salary

Coal field allowance as per the scale

HRA at the rate of 10%, 15%,20%,25%& 30% as per the place of residence of the employee

during his working.

Charge allowance as per the scale.



Underground allowance at the rate of 15% at Colliery Level and at the rate of 5% at area level of

basic salary.

Leave for employees of coal India limited includes

Casual leave

Special casual leave

Earn Leave On full pay

Half pay leave

Commuted leave

Extra-Ordinary leave without pay

Special Leave

Study leave

Maternity leave

Gratuity: - Payable for good, efficient and faithful service to such employees of executive

cadre who have completed 5 years of continuous qualifying service but shall be payable on

termination of employment on superannuation, discharge in the event of post being abolished,

permanent incapacity due to bodily or mental infirmity, death while in service of the company

and voluntary retirement, resignation or termination of employment for any other reason. In the

event of death or permanent incapacity, the condition of 5 years qualifying service shall not

apply.

Calculation of Gratuity:

(Pay last Drawn)*15*(No. of completed year of services)

26

Pension: - An employee after completion of thirty years of pensionable service and on attaining

the age of superannuating shall be eligible to receive monthly pension at the rate of twenty-five

percent of the average emoluments or not less than rupees three hundred fifty from the date

following the date of superannuating till the date of his death.



CONTENTS

Introduction 8

Coal India– Introduction 9-26

Coal India 9

Objective 10

Location Of Coal India 11

Number Of Coal Mines 12

Distribution Of Coal Mines 13

Technologies Adopted For Mining 14

Consuming sector Profile 15

Organization Structure Of CIL 16

Company Profile 17

Board Of Directors 19

CIL Details 20-25

Executive 27-32

Scale Of Pay 27

Dearness Allowance 28

Coalfield Allowance 28

Assam Allowance 29

Reimbursement for Personal Vehicle 29

HRA 30

Charge Allowance 31

Underground Allowance 31

Non Practicing allowance 32



Leave 32-36

Casual Leave 32

Special Casual Leave 33

Earn Leave On full pay 33

Half pay leave 34

Commuted leave 34

Extra-Ordinary leave without pay 34

Special Leave 34

Study leave 34

Maternity leave 35

Gratuity 37-42

The Payment Of Gratuity Act, 1972 37

Gratuity 39

Provident Fund 40

Pension 43-45

Monthly Pension 43

Disablement Pension 44

Monthly widow Pension 44

Children Pension 45

Orphan Pension 45

Learning From The Winter Training 46

Bibliography 47



INTRODUCTION

COAL is the most important and abundant fossil fuel in India. It accounts for 63% of the country's

energy need. India is the 3rd largest coal producing country.

Indian coal at the pithead is the cheapest coal in the world. With a low sulphur content, Indian coal

is eco-friendly. CIL’s business plan therefore aims primarily to translate these strong economic

fundamentals of coal into prosperity for the country and the company.

With eight wholly owned subsidiary companies, operating in as many states, CIL’s activities

comprehensively cover A to Z in coal extraction, identification of coal reserves, detailed exploration

followed by projectisation, design and implementation of projects and optimizing operations in 498

existing underground and open cast mines, 19 beneficiation plants and one coal carbonization plant

are some in CIL’s range of activities.

The Government of India, the sole owner of CIL, has sanctioned a major policy support package

which, besides restructuring Government ‘s holding in the company, has progressively free coal

prices from administrative control. Coal mining is also being opened up to private investment. The

implication of the policy support and sector reforms in terms of CIL’s ability to attract resources

globally is far-reaching. CIL confidently looks forward to its emergence as one of the largest

tax/dividend paying corporates in India by the turn of the century.



Coal India

Coal India contributes 87% of coal production in India and is the largest company in the World

in terms of coal production. Coal India employs nearly 510 thousand persons as on 1.10.2002

and is the largest corporate employer in the country. It is one of the largest 5 Companies in the

country with turnover being around Rs. 215 billion. It is one of the largest tax payer (Corporate

tax Rs. 6.6 billion & tax on dividend Rs. 0.62 billion in 2000-01) and has paid Dividend of

Rs.0.9 Billion to the Govt. of India in 2000-01.

COAL is the most important and abundant fossil fuel in India. It accounts for

63% of the country's energy need. The country's industrial heritage was built upon indigenous coal.

Commercial energy consumption in India has grown from a level of about 26% - 68% in the last

four & half decades. The current per capita primary energy consumption in India is about 243

kgoe/year which is well below that of developed countries. Driven by the rising population,

expanding economy and a quest for improved quality of life, energy usage in India is expected to

rise around 450 kgoe/year in 2010. Considering the limited reserve potentiality of petroleum &

natural gas, eco-conservation restriction on hydel project and geo-political perception of nuclear

power, coal will continue to occupy centre-stage of India 's energy scenario.

With hard coal reserves around 206 billion tonnes, of which 75 billion tonnes are proven,

Indian coal offers a unique ecofriendly fuel source to domestic energy market for the next century

and beyond. Hard coal deposit spread over 27 major coalfields, are mainly confined to eastern and

south central parts of the the country. The lignite reserves stand at a level around 26 billion tonnes,

of which 90 % occur in the southern State of Tamil Nadu.



Objectives

To promote the development and utilization of the coal reserves in the country for meeting

the present and likely future requirement of the nation with due regard to need for

conservation of non-renewable resources and safety of mine workers.

To raise the productivity of coal mining and related activities through introduction of

improved technology, streamlining of organization, management and improving the skills,

motivation of the work-forces.

Efficiency of operations and adopting appropriate cost reduction and cost control methods.

To make efficient arrangements for marketing and supply of coal so that coal, coke and

other similar derivatives are available to consumers throughout the country conveniently and

at reasonable prices.

To promote research and development activities on a continuing basis in the areas of coal

mining, beneficiation development of new coal based products or by-products, fuel

technology or any other area having a bearing on conservation, development for utilization

of the coal reserves of the country.



LOCATION OF COAL INDIA & ITS SUBSIDIARIES ALONG WITH COAL RESOURCES

1. ECL, SANCTORIA 2. BCCL, DHANBAD

3. CCL, RANCHI 4. CMPDIL,RANCHI

5. NCL, SINGRAULI 6. SECL, BILASPUR

7. WCL, NAGPUR 8. MCL, SAMBALPUR

9. NEC, MARGHERITA 10. CIL(HQ), KOLKATA



Number of Coal Mines

The existing coal companies of the country and the number of working coal mines operated by them

as on 31.3.99 are given below:-

Company Number of

working mines *

ECL 122

BCCL 87

CCL 55

NCL 09

WCL 87

SECL 87

MCL 22

NEC 06

CIL (Total) 475

SCCL 69

TISCO 07

IISCO 03

DVC 01

Bihar State Mineral

Development Corporation

Ltd.

01

J & K Minerals Ltd. 03

Bengal Emta Coal Mines

Ltd.

01

Jindal Strips Power Ltd. 01

Total 561



Details of distribution of coal mines in the country companywise (1998-99)

Companies Number of Mines

OC UG Mixed Total

ECL 22 100 0 122

BCCL 13 50 24 87

CCL 25 13 17 55

NCL 09 0 0 09

WCL 30 52 05 87

SECL 17 69 01 87

MCL 13 09 - 22

NEC (Unit directly controlled

by CIL)

02 04 0 06

Coal India Limited 131 297 47 475

Singareni Collieries Co. Ltd. 10 59 0 69



Technologies adopted for mining of coal

A. Underground mining

1. Bord and Pillar

The underground mines are worked mainly by conventional Bord and Pillar (B&P)

method .Intermediate technology is being introduced in BCCL in a phased manner to replace

manual loading. About 132 Side-Discharge loaders (SDL) have been introduced so far in B&P

mines. Many of the mines are semi-mechanized

2. Longwall Mining

In BCCL, one mine is being worked by highly mechanized Longwall system of mining with power

supports and shearers for extraction and Road-headers for development. One

more conventional Longwall mine is being worked using Russian Jankowice method of mining.

B. Opencast Mines

Open Cast mines are being worked mainly by Shovel-Dumper combination. Two draglines are also

in operation. Other Heavy Earth Moving Machinery(HEMM) include drills , dozers, road graders,

sprinklers etc.





Despatches from CIL constitutes about 87% of total despatches to Power Sector in the country

(including imports by Power Sector). Coal based power generation in the country registered a

growth of 3.7% in 2001-02 over the previous year's generation of 330.62 billion units. With the

efforts of Railways and Coal companies coal stock with power house also improved by over 3

million tonnes at the end of the year in comparison to the begining. The sustained endeavour of

Coal Companies to cater the needs of Power Sector was further reflected by all round improvement

both in Plant Load Factor (PLF) and Specific Coal Consumption.



Organizational Structure of CIL



Company Profile

Date of incorporation: 21.10.1975

Corporate Status: The company is incorporated under the

Companies Act, 1956 and is wholly owned by

the Government of India (GOI).

Business: Engaged in the mining of coal, coal based

products and mining consultancy.

Registered Office: Coal Bhavan,

10 Netaji Subhas Road,

Kolkata - 700 001

West Bengal, India.



BANKERS State Bank of India, Punjab National Bank,

United Bank of India, Canara Bank, Bank of

Baroda, Dena Bank,

State Bank of Travancore, Allahabad Bank,

HDFC Bank, ICICI Bank Ltd.,

Vysya Bank Ltd., Centurian Bank, Standard

Chartered Bank, ABNAMRO Bank, BNP

Paribas, HSBC Ltd, Deutsche Bank, Citi Bank,

American Express Bank Ltd

AUDITORS M/s. S Ghosh & Co.

Chartered Accountants

Bharat Bhawan

3, Chittaranjan Avenue

Calcutta - 700 072



Board of Directors as on 20th January 2004

Shri Shashi kumar

Chairman (Additional Charge)

FULLTIME DIRECTORS

Shri A. Kalam

(Technical)

Shri D. K. Verma

(Finance)

Shri C. H. Khisty

(Personnel & Industrial Relations)

Shri Shashi kumar

(Marketing)

PART TIME DIRECTORS

Dr. S. Behuria

Jt. Secretary & Financial Advisor,

Department of Coal, New Delhi

Shri S. B. Ghosh Dastidar

Addl. Member (Traffic),

Railway Board



Shri M K Sinha

CMD, ECL

Shri M K Thapar

CMD, SECL

CIL DETAILS

COAL RESERVES IN INDIA

As on 1.1.2002(Billion Tones)

.TOTAL

RESERVE

PROVED

RESERVE

INDICATED

RESERVE

INFERRED

RESERVE

COKING 33 17 13 2

NON-

COKING201 70 96 35

TOTAL 234 87 109 37



Raw coal production

(millions tones)

Dispatches from CIL

(Millions tones)



Man productivity

(tones/manshift)



Production

RAW COAL PRODUCTION (in Million Tonnes)

OFFTAKE OF COAL (in Million Tones)



DESPATCH TO POWER SECTOR (Milliontones)

MAN PRODUCTIVITY



MAN POWER

Safety

Mining is said to be most hazardous peacetime operation. All out efforts are being taken by Coal

India Ltd to reduce the hazards to the minimum. Towards this end , Coal India Ltd. has taken the

following steps:

Coal India Ltd has laid down and is implementing a well defined Safety Policy.

CIL has established a structured multi-disciplinary Internal Safety Organisation (ISO) for

monitoring Safety status of Mines, both at subsidiary level and at CIL HQs.



CIL has established various fora for workers participation in safety from the Mine Level

(through Workmen’s Inspectors and Safety Committees) to the Area Level (through

Bipartite/Tripartite Committees) to the Company Level( Tripartite Committees ) and at the

apex Coal India safety Board .

Safety is monitored at the highest levels in monthly meetings of CMDs



Function of Ministry of Coal

The Ministry of Coal is responsible for development and exploitation of coal and lignite reserves of

India. The subjects allocated to the Ministry under the Government of India(Allocation of Business)

Rules, 1961, as amended from time to time, are as follows:

Exploitation and development of cling coal, non-coking coal and lignite deposits in India.

All matters relating to production, supply, distribution and pricing of coal.

Development and operation of coal washeries other than those for which Ministry of

Steel(Ispat Mantralaya) is responsible.

Low Temperature carbonisation of coal and production of synthetic oil from Cal.

Administration of the Coal Mines( Conservation and Development) Act; 1974 (28 of 1974)

Administration of the Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948

(46 of 1948)

Administration of all residual matter relating to the Coal Mines Labors Welfare

Organization since abolished with effect from 1.10.1986.

Administration of the rules under the Mines Act, 1952(32 of 1952) for levy and collection of

excise duty on coke and coal produced and dispatched from mines.

Administration of Coal Bearing Areas (Acquisition and Development) Act, 1957(20 of

1957).

Administration of Public Sector Enterprises dealing with coal and lignite

Administration of Mines and Minerals(Regulation and Development) Act, 1957(67 of 1957)

and other Union laws in so far as the said Act and other laws relating to Coal Lignite and use

of sand for stowing purposes.

All business incidental to the administration of above activities including matter concerning

the State Goverments.



SCALES OF PAY

GradePre-Revised Scales of Pay

(01.01.1992 to 31.12.1996)

Revised Scale w.e.f

01.01.1997

E1 Rs. 4000 – 7150 Rs. 8600 - 250 - 14600

E2 Rs. 5000 – 8275 Rs. 10750 - 300 - 16750

E3 Rs. 6000 – 9425 Rs. 13750 - 350 - 18700

E4 Rs. 7000 – 9600 Rs. 16000 - 400 - 20800

E5 Rs. 7500 – 9900 Rs. 17500 - 400 - 22300

M1 Rs. 8250 – 10050 Rs. 18500 - 450 - 23900

M2 Rs. 9000 – 10500 Rs. 19500 - 500 - 25000

M3 Rs. 9500 – 11500 Rs. 20500 - 500 - 26500

INCREMENTS

(b) The anniversary date of increment will be 1st April



DEARNESS ALLOWANCE

100 Percent DA neutralization has been adopted for all the executive w.e.f. 01.01.1997. The

industrial DA at AICPI - 1708 as on 01.01.1997 admissible to the executives in the revised scale is

"nil".

Dearness Allowance payable to the executive cadre employees effective from 01.07.2001

is as under:

Effective Date Average of AICPI Revised DA Rates(%)

01.07.2001 2209 29.3

COALFIELD ALLOWANCE (01.12.1997)

Pay Range Rate of CFA admission

Rs. 8600 - 10750/ Rs. 425/-

Rs. 10750 - 11050/ Rs. 560/-

Rs. 11051 - & above Rs. 750/-

EXECUTIVE DRAWING COALFIELD ALLOWANCE ARE NOT ENTITLED FOR CITY

COMPENSATORY ALLOWANCE



ASSAM ALLOWANCE (w.e.f. 20.01.1997)

Pay Range Rate of CFA admissible

Basic Pay upto Rs. 10750/- Rs. 7001

Basic Pay above Rs. 10750/- Rs. 8001

REIMBURSEMENT OF EXPENSES INCURRED FOR USING PERSONAL VEHICLE

For using personal vehicle for official work, reimbursement of expenses incurred by the executives

for car / scooter/ moped, the following are admissible w.e.f. 01.09.98).

CAR

Officers in the grades of E-5 and above Rs. 1600/- pm

Officers below E-5 grade Rs. 1270/- pm

SCOOTER I MOTOR CYCLE

For all Rs. 4401

MOPED 1 AUTO CYCLE or any other power driven vehicle of less than 1 HP

For all Rs. 2501- pm



HOUSE RENT ALLOWANCE WITH EFFECT FROM 01.06.2001

RECLASSIFICATION OF CITIES RATE OF HRA ON THE

REVISED BASIC PAY

KOLKATA, MUMBAI, DELHI, CHENNAI 30%

HYDERABAD, AHMEDABAD, BANGALORE 25%

AND

CHANDIGARH, NAGPUR, RANCHI & ALL COALFIELDS

AREA INCLUDING DHANBAD, SANCTORIA, SILIGURI,

ALL B1 CITIES EXCLUDING NAGPUR 20%

ALL B2 CITIES EXCLUDING RANCHI & CHANDIGARH 15%

SAMBALPUR, BILASPUR AND ALL C CLASS CITIES 10%

Executive adlotted company's accomodation will have to pay on revised pay at the percentage in

practice before 01.01.1997 or standard rent fixed by the Companies plus

1% of pay for electricity, coal, etc.

Executives living in a house owned by hIm/wife/children/father/mother or on rental basis will be

eligible for HRA at the above rates subject to declaration in the prescribed proforma.

Executives will be eligible for HRA at the applicable rate without production of rent receipt, subject

to declaration in the prescribed proforma.

Executives will be eligible for HRA applicable to where their workplace is situated

irrespective to place of actual stay.



Executives who refuses or surrenders accomodation offered to him by the Company will not be

eligible for HRA except for those who surrender Company accommodation to reside in the house

owned by him / wife / children / father / mother.

CHARGE ALLOWANCE (w.e.f. 1.12.97)

Admissibility Per month

1. Manager / Engr. In-Charge of Rs. 400/-

Excavating Equipment in Opencast Project

2. SOM working, Actg. Genl. Manager, Rs. 500/-

Actg. Project Officer

3. Sub Area Manager Rs. 500/-

4. Area General Manager Rs.600/-

UNDERGROUND ALLOWANCE

Underground Allowance is admissible at the revised rate w.e.f. 1.8.01 as follows:

1.Colliery Level:

@15% of basic pay to the Agent / Project Officer / Colliery Manager / Addl. Manager / Asstt.

Manager / Safety Officer / Ventilation Officer / Colliery Engineer and Colliery Survey Officer (E-1

& E-2 grade).

2.Area Level

@5% of basic pay subject to the condition that either 50% of total

production of the Area for underground or minimum underground production is one million tonnes

per annum. Admissible to Area Manager (Tech) E-5 grade/Area SOM E-5/Area Engineer E-5, E-4,

E-3/AreaSr. Survey Officer (E-3 of E-2).



3. Company Hqs. :

For regular underground inspectiion which is primary duty @5% of basic

to the officer of Safety Division in E-4, E-5 & M-1 grade.

NON-PRACTISING ALLOWANCE FOR MEDICAL OFFICERS W.E.F. 01.08.2001

Pay range 17.5% of Basic Pay

It counts as pay for the purpose of DA, Gratuity and employer's contribution to CPF but would not

be taken into account for the purpose of fixation of pay in the revised scale.

LEAVE RULES FOR EXECUTIVES OF COAL INDIA LTD.

Casual Leave

(a) 12 days in a calender year.

(b) Allowed not more than 8 days at a time.

(c) Public holidays and weekly offs occurring during the spell of the

leave will not be treated as part of the leave.

(d) May be combined with weekly days of rest / public holidays provided that the

total period of absence should not exceed '10 days at a time.

(e)In the first year of service, Casual leave of an executive will be calculated

Proportionately from the date of his joining.



Special Casual Leave

Special Casual Leave is granted not for personal or domestic reason but

to meet special situation such as :

(a) Period in c8lmp permitted to join the Territorial Army, not exceeding

14 days which can be combined with regular leave.

(b) For participating in athletic and sports of national or International

level - not exceeding 30 days in a calendar year.

(c) For participating in inter-unit / inter-department tournament - not

exceeding 10 days.

(d) Blood donation on working days - granted for the day.

(e) Undergoing sterilization operation - not exceeding 6 working days.

(f) For attending annual general meetings or conferences of the central

organization two principal office bearers of recognized Unions granted

special casuals leave for a period of maximum 10 days in a calendar year.

(g) For appearing in the examination approved by the Management (only twice for each

examination) - granted actual number of days of examination.

Earned Leave on Full Pay

(a) Every executive shall be credited with earned leave in advance in two

installments of 15 days each on the first day of January and July of every

calendar year.



(b) Maximum accumulation of E.L. is 240 days.

(c) The maximum earned leave may be granted at a time for any specified purpose to an

executive shall be 120 days within India and 180 days abroad.

Half Pay Leave

(a) Half pay leave, is credited in advance, in two instalments of 10 days each on the first day

of January and July in every calender year.

Commuted Leave

An executive can have the half pay leave due converted into half the amount of

Full pay leave, at his option. Such converted leave will be termed as

“commuted leave”. It is granted only on submission of medical certificate by the

competent Sanctioning authority, provided he has reason to believe that the

executive will return to duty on the expiry of the commuted leave.

Extra-Ordinary Leave Without Pay

Granted to an executive in special circumstances upto a maximum period of 3 months.

(a) When no other leave is admissible.

(b) When other leave is admissible but the executive applies in writing for grant of Such

leave.

Special Leave

Special leave on full pay for a period not exceeding six months during the entire service is

granted, only when the executives is suffering from the following diseases on Production

of medical certificate from an authorized medical officer.

T.B.. . Cancer. Leprosy. Severe Heart Attack. Paralysis .



Bypass and Open Heart Surgery

Any other disease which the Competent Authority may add to this list.

Study Leave

(a) Study leave with half pay (half of basic pay, personal pay, full DA, HRA at full rate) is

granted to an Executive to enable him to study scientific, technical or similar subjects or to

undergo special course of instruction, if it is considered to be in the interest of the company.

(b) Granted generally for two years subject to a maximum of three years where post

graduation degree / diploma is of three years duration during the entire service. Company's

financial obligation in the form of sponsorship is restricted for two years only.

(c ) Ordinarily not granted to an employer of less than five years service or within three

years of the date on which the executive will retire.

(d) It is not debited against the leave account and counts as service for promotion but not for

leave.

Maternity Leave

(a) Granted to a female employee for a period of 90 days from the date of its

commencement. The leave is granted on full pay is not debited against the leave

account.

(b) This leave may be combined with Earned leave on production of medical certificate.

(c) Granted also in case of miss-carriage including abortion on certain conditions.



Encashment of Leave

(a) Earned leave on full pay at the credit is encashable subject to a maximum of 30 days

in a calendar year or 50%) of the leave due at credit whichever is less.

(b) No leave is required to be taken for encashment of earned leave.

(c ) Encashment of earned leave is permissible upto a maximum of 240

days at credit at the time of retirement.

(d) Leave at credit shall not be granted for encashment of an executive resigned from the

service.

(e) Half pay leave is encashable subject to a maximum of 240 days at the time of

retirement w.e.f. 01.04.93 on certain conditions.



The Payment of Gratuity Act, 1972 Short title, extent , application and commencement

1. This Act may be called The Payment of Gratuity Act1972.

2. it extends to the whole of India.

3. it shall apply to-

every factory, mine, oilfield, plantation, port and railway company;

every shop or establishment within the meaning of any law for the time being

in force in relation to shops and establishments in a state, in which ten or

more persons are employed, or were employed, on any day of the preceding

twelve months;

such other establishments or class of establishments in which ten or more

employees are employed, or were employed on any day of the preceding

twelve months as the central Government may by notification specify in this

behalf.

Payment of gratuity-

1. Gratuity shall be payable to an employee on the termination of his employment after

he has rendered continuous service for not less than five year-

On his superannuation, or

On his retirement or resignation, or

On his death or disablement due to accident or disease

Provided that the completion of continuous service of five years shall not be necessary where the

termination of the employment of any employee is due to death or disablement. Provided further

that the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no

nomination has been made, to his heirs, and where any such nominees or heirs is a minor, the share

of such minor, shall be deposited with the



controlling authority who shall invest the same for the benefit of such minor in such bank or other

financial institution, as may be prescribed, until such minor attains majority. For the purpose of this

section, disablement means such disablement as incapacitates an employee for the work which he

was capable of performing before the accident or disease resulting in such disablement.

2. For every completed year of service or part thereof in excess of six months, the

employer shall pay gratuity to an employee at the rate of 15 days per completed year

of service up to 30 years or at the rate of 26 days per completed year of service if

service year is more than 30 years on the wages last drawn which includes basic,

dearness allowance, underground allowance (where applicable).

If more than six month of service then same is rounded up to one

year.

3. The amount of gratuity payable to an employee shall not exceed three lakhs.

4. For the purpose of computing the gratuity payable to an employee who is employed,

after his disablement, on reduced wages, his wages for the period preceding his

disablement shall be taken to be the wages received by him during that period, and

his wages for the period subsequent to his disablement shall be taken to be the wages

as so reduced.

5. Notwithstanding anything contained in Sub-sec.

The gratuity of an employee, whose services have been terminated for any

act, willful omission or negligence causing any damage or loss to, or

destruction of, property belonging to the employer, shall be forfeited to the

extent of the damage or loss so caused;

The gratuity payable to an employee:

i) if the service of such employee have been terminated for his riotous or

disorderly conduct or any other act of violence on his part, or



ii) If the service of such employee have been terminated for any act which

constitutes an offence involving moral turpitude, provided that such offence

is committed by him in the course of his employment.

GRATUITY

Payable for good, efficient and faithful service to such employees of executive cadre who have

completed 5 years of continuous qualifying service but shall be payable on termination of

employment on superannuation, discharge in the event of post being abolished, permanent

incapacity due to bodily or mental infirmity, death while in service of the company and voluntary

retirement, resignation or termination of employment for any other reason. In the event of death or

permanent incapacity, the condition of 5 years qualifying service shall not apply.

For every completed year of service or part thereof in excess of six months, the employer shall

pay gratuity to an employee' at the rate of fifteen days wages based on the rate of wages last

drawn by the employee concerned.

Calculation of Gratuity:

(Pay last Drawn)*15*(No. of completed year of services)

26

Subject to a maximum of Rs. 3,50,000/- as per Payment of Gratuity Act. Wages as per payment of

Gratuity Act means all emoluments which are earned by an employee while on duty or on leave in

accordance with the terms and conditions of his employment and which are paid or are payable to

him in cash and includes dearness allowances but does not include any bonus, commission, house

rent allowance, overtime wages and any other allowance.



PROVIDENT FUND

(a) Every employee in the coal mines in which the scheme applies is required to join the

Fund compulsorily and become a member, the moment he completes 30 days from the

date he is employed in the coal mines in surface or underground.

(b) The rate of contribution towards C.M.P.F is 12% from the employees side and similar

matching contribution from the employers side also over the total emoluments covered

by the member concerned from 05-2000.

(c ) Out of the above, 1-1/6% contribution are diverted from both sides to Family Pension

Fund.

(d) Any member of the PF, if he so desires can contribute is excess of the compulsory

contribution, a sum not exceeding 12% of total emoluments rounded upto the nearest

rupee.

(e) Permission to contribute voluntarily towards the Fund may have to be taken from the

Regional Commissioner well in advance to effect recovery.

Rate of Interest

1993-1994: 12% per annum

2000-2001: 11% per annum

2001-2002: 9.5% per annum



Pension

The Pension Fund consists of the following :

net assets of the Coal Mines Family Pension Scheme, 1971 as on the appointed

day;

an amount equivalent to two and one-third percent of the salary of the employee,

being the aggregate of equal shares of the employee, being the aggregate of equal

shares of the employee and the employer from their respective contributions to the

Fund, to be transferred from the appointed day from the fund of employee;

an amount equivalent to two percent of the salary of the employee from the first

day of April, 1989 or the date of joining, whichever is later, upto the 31 st day of

March, 1996 and two percent of the national salary of the employee from the 1st

day of April, 1996 or the date of joining, whichever is later, to be transferred from

his salary;

an amount equivalent to one increment to be calculated on the basis of the salary of

the employee as on the first day of July, 1995 or the date of joining, whichever is

later, to be transferred from the first day of July, 1995 or the date of joining,

whichever is later, from the salary of the employee;

an amount equivalent to one and two-third percent of the salary of the employee to

be contributed by the Central Government from the appointed day;

Provided that in the case of an employee whose salary exceeds rupees and thousand

six hundred per month, the contribution payable by the Central Government shall be

equal to the maximum of the amount payable on the salary of rupees one thousand six

hundred per month only;



amounts to be deposited by new optees in terms of the provisions of the Scheme.

In 1998-99 (upto Dec’98) Rs142.20 crores was diverted to Pension from Provident Fund.

Net accretion in the Pension Fund as on 31.12.98(without Government Shares and

interest) is Rs.1623.40 crores.

The Commissioner shall be responsible for valuation of the Pension Fund every third year

by an Actuary to be appointed by the Board of Trustees.

Coverage :-

All employees who are members of the ceased Coal Mines Family Pension Scheme,

1971 and are on rolls on 31st March,1998.

All such employees who are appointed on or after 31stMarch 1998.

All such opted members who opted for membership of the Pension Fund in Form PS-1

as the case may be .

Benefits :-

Monthly Pension

Disablement Pension

Monthly widow or widower pension

Children Pension

Orphan Pension

Exgratia Payment

During 1998-99(upto December’98), 1217 claims have been settled and Rs11.79 crores

disbursed.



MONTHLY PENSION An employee after completion of thirty years of pensionable service and on attaining the

age of superannuation shall be eligible to receive monthly pension at the rate of twenty-

five percent of the average emoluments or not less than rupees three hundred fifty from

the date following the date of superannuation till the date of his death.

Where an employee has not completed thirty years but has completed ten years

pensionable service on attaining the age of superannuation, the pension shall be

determined on the following basis:

Length of pensionable service 25 per cent of the average ------------------------------------ * emoluments 30

Where an employee having completed fifteen years of pensionable service and would be

attaining the age of superannuation within a period of ten years, opts to retire from the

service before attaining the age of Superannuation, the amount of monthly pension

payable to such employee shall be determined on the basis specified in Schedule-2.

Where an employee, has not completed, ten years of pensionable service on attaining the

age of superannuation, or opts to leave service, or his services are terminated, or becomes

disabled before completion of ten years of pensionable service, the amounts payable by

way of return of contribution to such employee shall be determined on the basis specified

in Schedule-3.



DISABLEMENT PENSION

Where an employee after rendering ten years of pensionable service becomes

permanently handicapped or disabled on account of bodily or mental infirmity during his

service time, and has been declared as such by a competent medical board, he shall be

entitled to a disablement pension to be computed at the rate of twenty five percent of the

average emoluments or not less than rupees three hundred fifty per month.

MONTHLY WODOW OR WODOWER PENSION

After the death of an employee from the date following the date of his/her death and till

the date of her /his death or re-marriage whichever is earlier, his/her legally wedded

wife/husband shall be entitled for widow or widower pension, as the case may be.

If an employee is having more than one legally wedded wife at the time of his death, all

the surviving widows shall be entitled to receive in equal share the amount of widow

pension till the date of their death or re-marriage, whichever is earlier.

The amount of monthly widow or widower pension payable on the death of an employee

after the date of superannuation, shall be equal to sixty percent of the monthly pension of

the employee as on the date of his/her death or not less than rupees two hundred and fifty.

In case an employee dies in service before attaining the age of superannuation, the

amount of monthly widow or widower pension payable shall be equivalent to sixty six

and two upon three percent, of monthly pension of the employee for which he/she would

have become entitled on the date of his/her death or not less than rupees two hundred and

fifty.



CHILDREN PENSION After the death of an employee from the date following the date of his/her death,

alongwith surviving wife/husband, two of the eldest sons or unmarried daughters, as )he

case may be, till they attain the age of twenty five years or in the case of unmarried

daughter till the date of her marriage, whichever is earlier, shall be entitled to childrn

pension.

The amount of monthly children pension payable after the death of an employee shall be

equal to twenty five percent of the amount of widow or widower pension for each son or

daughter as the case may be, or not less than rupees one hundred for each child.

ORPHAN PENSION

In case there is no surviving widow or widower at the time of the death of an employee,

from the date following the date of his/her death, or otherwise the date of the death of the

widow /widower, two of the eldest sons or unmarried daughters, as the case may be, till

they attain the age of twenty five years and in the case of unmarried daughter till the date

of her marriage, whichever is earlier, shall be entitled for orphan pension in lieu of

children pension.

The amount of monthly orphan pension payable after the death of the employee or the

widow/widower shall be equivalent to fifty percent of the amount of widow /widower

pension of not less than rupees one hundred and ten for each orphan.



LEARNING FROM THE WINTER TRAINING

The tool that was most widely used in the Accounts Department was Microsoft Excel. The entire

range of functions were being put to use and it was essential to get acquainted with the

intricacies of the package.

Planning was essential at each and every step before any work was started. As the awareness of

salary system was not known to me , putting what was required in the right languages in the right

tone was of prime importance.

The most significant value addition was made by the in depth study of The Payment Of Gratuity

Act,1972 and National Coal Wage Agreement-VI.

Conforming to National Coal Wage Agreement-VI is an essential part of my project. Hence,

experts are required to be consulted repeatedly specially with the arrival of National Coal Wage

Agreement-VII from 2004.

BIBLIOGRAPHY



Coal Mines Officer’s Association Of India, ECL Branch, ”CIL Service Related Matter

And Conduct Discipline & Appeal Rules-1978”,July,2001

Joint Bipartite Committee For The Coal industry, ”Memorandum Of Agreement,

National Coal Wage Agreement-VI”, December 23,2000

Mukherji G.B., ”Coal Mines Pension Scheme Ministry Of Coal”, March 20,1998

Eastern Coalfields Limited, ”Annual Report”, 2002-2003

WWW.COALINDIA.NIC.IN

WWW.COAL.NIC.IN

WWW.ECL.NIC.IN

WWW.DIVEST.NIC.IN


http://WWW.DIVEST.NIC.IN/

http://WWW.ECL.NIC.IN/

http://WWW.COAL.NIC.IN/

http://WWW.COALINDIA.NIC.IN/

Technology

Salary system of eastern coalfields limited