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

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


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

Pre-Revised Scales of Pay Revised Scale w.e.f
Grade
(01.01.1992 to 31.12.1996) 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 01
Development Corporation
Ltd.
J & K Minerals Ltd. 03
Bengal Emta Coal Mines 01
Ltd.
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 02 04 0 06
by CIL)
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 PROVED INDICATED INFERRED
.
RESERVE RESERVE RESERVE RESERVE
COKING 33 17 13 2
NON-
201 70 96 35
COKING
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:
R Exploitation and development of cling coal, non-coking coal and lignite deposits in India.
E 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.
S Low Temperature carbonisation of coal and production of synthetic oil from Cal.
L Administration of the Coal Mines( Conservation and Development) Act; 1974 (28 of 1974)
A 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.
O 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.
e Administration of Coal Bearing Areas (Acquisition and Development) Act, 1957(20 of
1957).
1 Administration of Public Sector Enterprises dealing with coal and lignite
A 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.
o All business incidental to the administration of above activities including matter concerning
the State Goverments.

 SCALES OF PAY

Pre-Revised Scales of Pay Revised Scale w.e.f
Grade
(01.01.1992 to 31.12.1996) 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 :

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

d 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;

F 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;

h 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;

w 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.
M 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


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