COMPENSATION AND AWARDS AT HPCL

Statement of monthly remuneration of employees and workmen including system of compensation. Remuneration to the officers is governed by the directives of the Department of Public Enterprises. The workmen compensation is through negotiations with the recognized unions. The monthly pay structure for officers and workmen, indicating the minimum and maximum of the pay scales are as under: Management Employees Basic Basic DA Pattern Minimum Maximum 24900 50500 29100 54500 32900 58000 Industrial DA 36600 62000 pattern. 43200 66000 51300 73000 51300 73000 51300 73000 62000 80000 Marketing Non Management Employees Basic Basic DA Pattern Minimum Maximum 3500 6000 4320 8070 4385 8635 4430 9175 4485 9725 4550 10290 Industrial DA pattern 4640 10885 4750 4790 4980 5120 6375 11510 13535 14335 15070 16625

Salary Grade A B C D E F G H I Salary Grade M 00 M 01 M 02 M 03 M 04 M 05 M 06 M 07 M 08 M 09 M 10 M 11

Visakha Refinery Non Management Employees - Existing Salary Basic Basic DA Pattern Grade Minimum Maximum RW 1 7440 RW 2 8305 Industrial DA RW 3 10400 pattern RW 4 12335 RW 5 14890 Visakha Refinery Non Management Employees New Recruits Salary Basic Basic DA Pattern Grade Minimum Maximum RW 0 3000 5000 RW 1 3915 7440 Industrial DA pattern RW 2 4020 8305 RW 3 4225 10400 Mumbai Refinery Non Management Employees Salary Basic Basic DA Pattern Grade Minimum Maximum R 00 3500 6000 R 01 4790 8070 R 02 4880 8650 R 03 4975 9725 R 04 5075 10320 Industrial DA R 05 5170 10915 pattern R 06 5220 11455 R 07 5315 13535 R 08 5525 14335 R 09 5681 15070 R 10 5965 16625 In addition to the Basic within the above ranges indicated, Dearness Allowance on Industrial DA Pattern, House Rent Allowance or equivalent, City Compensatory Allowance, Leave Travel Concession, Provident Fund, Gratuity, Superannuation benefit, Medical Reimbursement etc. are paid as applicable.

Outstanding Achievement Award : Your hard work and contribution never go unnoticed at HPCL. If your, or your teams performance, is of unrivaled standards and has led to substantial savings, your contribution shall be rewarded with " Outstanding Achievement Award ". Its in recognition of your unrelenting and steady performance. Service Award: HPCL values loyalty and rewards it suitably. Employees who have been a part of the corporation for more than 15 years are rewarded for their service since they have proved to be a major force behind our successful journey.

TRAINING AND DEVELOPMENT AT HPCL HPCL has a full-fledged Corporate Training Department, to augment the learning and development requirements of its officers. The HR Department's Vision is Excellence in harnessing the full potential of all employees for becoming a World Class Energy Company With this Vision in focus, the Corporate Training Department's vision is to Create value through enhanced competencies and be a strategic partner to business by enabling employees realize their full potential through innovative and progressive learning initiatives. Basis the above, the key focus areas of the Department are as under:

Objectives Training Policy Identifying Training Needs Training Plans o HP Management Development Institute, (HPMDI) Nigdi. o Customized Programs o External Seminars/ Conferences o Foreign Training o E-Learning o Learning Centers o Education Refund Plan (ERP) o Study leave policy Training Effectiveness Summer Internship/Training for students

Objectives

Improve the performance of Employees in their respective assignments Enhance competencies to take up higher responsibilities Strengthen the Leadership Pipeline

Bring cultural change from Command & Control to Team based structure Leverage technology in human resources development Facilitate learning in the organization and build a "Learning Organization"

The specific training needs of individual employees are identified through Competency Mapping Exercises. The Training Department interacts with all Business Units/functions to identify and design training programs to cater to these needs. These programs enable employees to enhance their skills and realize their full potential.

Training Policy The Training Policy at HPCL provides broad directions to guide the learning solutions and initiatives.

Management Staff o Entry level: Samavesh - (Induction/ orientation Training) facilitates a new employee to build a sense of belongingness. o Supervisory level: Employee is equipped with function specific inputs and job related technical skills. o Managerial Level: Employee is exposed with the principles of Management which will help blend theory with practice, with focus on leadership development. o All training initiatives are planned in order to address new needs required by change in the market scenario. Non-Management Staff o Trainings with focus on Safety at locations, Skills relating to job requirement (technical, computer operations, team spirit etc.)

Identifying Training Needs

Individual Level: Mainly through recommendation from the Performance Appraisal System. Functional / Departmental Level: Customized Training programs are developed for the departments in consultation with the SBU/Functions. Organizational Level: Individual Development Plan obtained from the Competency mapping exercise is used to provide specific Training to bridge the observed the employee skill gaps. Other Training Plans for enhancement of the officers' competencies are scheduled.

Training Plans: In-Company Programs The In-company programs are conducted through internal faculty, external faculty and external courses. Focus is given to the development of core internal faculty members, who will effectively train employees at different levels of the Corporation.

HP Management Development Institute, (HPMDI) Nigdi.

HPCL has a full-fledged, well equipped Training Institute at Nigdi, Pune, standing testimony to the value that HPCL places on training. Away from distractions, it is the Temple of learning by virtue of its perfect learning ambience. HPMDI is equipped with the best infrastructure conducive for effective learning. It is also having adequate recreational facilities to keep the employees occupied before / after learning hours. The faculty is largely drawn from premier institutes or reputed independent training consultants. They are academicians and professionals who are well versed with the updated techniques and changing trends in the field of professional training. Tools like Group discussions, Role plays, case studies, presentations etc are used in the training.

Customized Programs The training plan for the year for each Business Unit / Function is finalized after mutual discussions with them. The SBU specific requirements due to the change in market scenario and thereby required competencies are delved upon. Then suitable Consultants/ practitioners are identified and customized programs are designed in consultation with line functions.

Training Plans: External Seminars/ Conferences: HPCL nominates officers for external seminars and conferences in connection with their functional requirements.

Foreign Training: Advanced Management Programs are organized for officers of levels DGM and above, by reputed Business Schools like ASCI- Hyderabad, MDI- Gurgaon, ISB- Hyderabad and IIMKolkata, including visit to select foreign countries. HPCL also sponsors Study Tour for employee groups to enrich their knowledge and skills, a few

employee groups for select foreign training to enrich their knowledge and skills, in the form of select foreign training.

E-Learning Various e-learning programs on defined competencies, including Online certification courses on Project Management, Supply Chain Management, different e learning resources on various behavioral areas are facilitated.

Learning Centers Learning Centers are available in all Zones and Corporate HQO for accessing information through internet, books and CDs. leading to learning.

Education Refund Plan (ERP) Education Refund Plan (ERP) enables the employees to undertake academic courses to further their self-development process, in relation to Corporation's requirement.

Study leave policy For employees interested in higher studies, to further on their own, Corporation has a detailed Study leave policy.

Training Effectiveness Based on the post-training evaluation, the Training department continuously monitors the effectiveness of the facilitator and relevance of the content. Alterations / modifications take place on this basis. Similarly Participant assimilation of training is also recorded.

Summer Internship/Training for students Students undergoing Graduate / Postgraduate professional courses from reputed Management and Engineering Institutions will be engaged for Summer Internship for a period of 6 to 8 weeks during April-June every year.

HPCL PROFILE
HPCL is a Government of India Enterprise with a Navratna Status, and a Fortune 500 company, with an annual turnover of Rs. 1,32,670 Crores and sales/income from operations of Rs 1,43,396 Crores (US$ 31,546 Millions) during FY 2010-11, having about 20% Marketing share in India among PSUs and a strong market infrastructure. HPCL's Crude Thruput and Market Sales (including exports) are 14.75 Million Metric Tonnes (MMT) and 27.03 MMT respectively in the same period. HPCL operates 2 major refineries producing a wide variety of petroleum fuels & specialties, one in Mumbai (West Coast) of 6.5 Million Metric Tonnes Per Annum (MMTPA) capacity and the other in Vishakapatnam, (East Coast) with a capacity of 8.3 MMTPA. HPCL holds an equity stake of 16.95% in Mangalore Refinery & Petrochemicals Limited, a state-of-the-art refinery at Mangalore with a capacity of 9 MMTPA. In addition, HPCL is constructing a 9 MMTPA refinery at Bathinda, in the state of Punjab, as a Joint venture with Mittal Energy Investments Pte. Ltd. HPCL also owns and operates the largest Lube Refinery in the India producing Lube Base Oils of international standards, with a capacity of 335 TMT. This Lube Refinery accounts for over 40% of the India's total Lube Base Oil production. HPCL's vast marketing network consists of 13 Zonal offices in major cities and 101 Regional Offices facilitated by a Supply & Distribution infrastructure comprising Terminals, Pipeline networks, Aviation Service Stations, LPG Bottling Plants, Inland Relay Depots & Retail Outlets, Lube and LPG Distributorships. HPCL, over the years, has moved from strength to strength on all fronts. The refining capacity steadily increased from 5.5 MMTPA in 1984/85 to 14.8 MMTPA presently. On the financial front, the turnover has grown from Rs. 2687 Crores in 198485 to an impressive Rs 1,32,670 Crores in FY 2010-11.

TRADE UNIONS AND DISPUTE MANAGEMENT AT HPCL

Trade union

A Trade Union is an association of workers in any trade or allied traders for the protection and enhancing their interests in regard to wages, hours and conditions of labor and/or the provision, from their common funds, of assistance to members during strikes, sickness, unemployment, old age etc.

 The secretary of the Indian Labour Federation , or Standing Committee of the All-India Trade Union Congress , as it is called, is Mr. Chiman Lal , who claimed that under this federation are combined 97 unions, with 1,500,000 members . . Brief history: Trade Unionism is a new thing in India. Before 1918 it did not exist except for a few unions for white workers. It was out of the strike movement of 1918 that the unions came into existence. The first one was organised at Madras by Mr. B. P. Wadia. Since then the progress of the movement has been both rapid and successful. The amount of success can be determined from the huge number of organised members, representing about 25 per cent. of the total number of the factory-going workers. Role of Trade Union:

The Trade Unions are organized by the workers to solve the labor problems created by or due to industrialization. Various agencies in the field of labor are working to tackle these problems. They use the methods of labor legislation and labor administration. Trade Unions deal or handle these problems more effectively and efficiently. It tries to facilitate the welfare of workers; eliminate exploitation through organized action like collective bargaining, welfare work, strikes etc. Thus, it is concluded that the primary role of a Trade Union is to protect the workers and to channelize their efforts into more rational directions.

Functions of Trade Unions

The functions of Trade Unions are wide and comprehensive. These functions have been termed as: (i) Militant or protective functions, and (ii) Fraternal, ministrant or positive functions. The former functions aim at securing better conditions of work and employment for members through militant activities such as strikes, gheraos etc., if there is a failure of collective bargaining. The latter functions provide benefits to their members and support them during strikes/lockouts or during periods of temporary unemployment by giving them financial support out of the funds raised with their contributions.

Why are they important?

The answer lies in the All India Central Council of Trade Unions- AICCTU is a fighting trade union centre of the Indian working class. AICCTU s motto of organizing the unorganized and unionizing the ununionized has established it as a trusted trade union centre among large sections of the most exploited and oppressed workers in different corners of India.

 AICCTU fights

for full democratic rights of the Indian people particularly of the rural poor, oppressed nationalities, women, national minorities and dalits. for enforcing the right to work and provision of social insurance for the old, weak and disabled. for a needs-based minimum wage leading to the formulation of a uniform national wage policy and for implementation of the principle of equal pay for equal work. for proper education, housing and health care services. for introducing a six-hour working day with overall improvement in working conditions. for greater participation of women in organized production, the eradication of gender discrimination and sexual harassment in the workplace, and for securing equal rights and full maternity benefits to all women workers. for abolition of child labor and all forms of bonded labor. against the contract labor and all forms of bonded labor. against industrial pollution, environmental degradation and industrial health hazards and for adequate safety measures to prevent industrial accidents. for abolition of all occupations which go against basic human dignity and full provision of alternative employment for the affected workers.

Common Provisions in Union-Management Agreements

Union recognition. Normally near the beginning of a contract, this clause states management's acceptance of the union as the sole representative of designated employees. Union security. To ensure that the union maintains members as new employees are hired and current employees quit, a union security clause commonly is demanded by the union. Wage rates. The amount of wages to be paid to workers (or classes of workers) is specified in the wage clause. Cost of living. Increasingly, unions are demanding and receiving automatic wage increases for workers when price levels go up.

Insurance benefits. This section specifies which insurance benefits the employer provides and how much the employer contributes toward those benefits. Frequently included benefits are life, hospitalization, and surgical insurance.

DISPUTE MANAGEMENT:
Background: A Memorandum of Settlement covering wages and other service conditions which was signed on April 17, 1996, between the Management of Hindustan Petroleum Corporation Ltd and its Workmen represented by the Unions operating in Mumbai Refinery expired on September 30, 1998. On expiry of the said Memorandum of Settlement, the Unions submitted their Charter of Demands for commencing the negotiations on the Long Term Settlement. In the meanwhile, the Department of Public Enterprises, Ministry of Industry, Government of India, vide Office Memorandum No. P.2(11) 96/DPE (WC) dated 14.1.1999 issued the Policy guidelines for the Sixth round of wage negotiations. Further, Ministry of Heavy Inustries and Public Enterprises (Department of Public Enterprises) Government of India vide Office Memorandum No.P.2(11) 96-DPE (WC)-GL-XXVII dated 26.7.2000. As per the said notification, the Unionised workmen were to be given an option either for a 10 years wage settlement period with 100% neutralisation of DA or 5 years wage settlement period with graded neutralisation of DA. Accordingly, preliminary rounds of LTS meetings were held with Unions operating in Mumbai Refinery, wherein, the Management gave separate offers for 5 years period and 10 years period. Both the Unions operating in Mumbai Refinery opted for 10 years wage settlement period. Subsequently several rounds of meetings were held between the Management and the Unions for finalising the Long Term Settlement. Meanwhile, Petroleum Employees Union operating in Mumbai Refinery, had given Strike Notices dated April 17, 2001 and September 12, 2001. HPKU has also given strike notice dated 12.10.2001 demanding for early finalisation of Long Term Settlement and Promotion Policy. Hence, the matter was seized in Conciliation and the Regional Labour Commissioner (Central) Mumbai held the Conciliation proceedings on 27.09.2001. The RLC has advised all the parties to hold bilateral discussions. Bilateral discussions were held on 23rd & 24th May 2001, 19th to 21st June 2001, 28th to 30th August 2001, 4th & 5th of October 2001, 29th & 30th October 2001, 1st & 2nd of November 2001, all at Mumbai, 9th to 11th of November 2001 at Lonavala, 28th to 30th November 2001, 3rd/4th January 2002 and 1st to 5th March, 2002 at Mumbai. Further during the Meeting held on 20-23rd May 2002 a Memorandum of Settlement was reached. MEMORANDUM OF SETTLEMENT MEMORANDUM OF SETTLEMENT ARRIVED UNDER SECTION 18(1) OF INDUSTRIAL DISPUTES ACT 1947, ON 23.05.2002, ON THE CHARTER OF DEMANDS BETWEEN MANAGEMENT OF HINDUSTAN PETROLEUM CORPORATION LIMITED, AND THEIR WORKMEN IN MUMBAI REFINERY REPRESENTED THROUGH TRADE UNIONS OPERATING IN MUMBAI REFINERY ON THE FOLLOWING TERMS

1) APPLICABILITY 2) PERIOD OF SETTLEMENT 3) TERMS OF UNDERSTANDING 4) FITMENT METHODOLOGY 5) SALARY SCALES 6) STAGNATION PAY 7) PERSONAL PAY 8) ANNUAL INCREMENT

9) PROMOTIONAL INCREMENT 10) DEARNESS ALLOWANCE 11) HOUSE RENT ALLOWANCE 12) CITY COMPENSATORY ALLOWANCE 13) SELF LEASE 14) LEAVE FARE ASSISTANCE (LFA) AND LEAVE TRAVEL CONCESSION (LTC) ACTUALS OR LFA (ENCASHMENT) 15) ACTING ALLOWANCE 16) TRANSPORTATION BENEFITS 17) CHILDREN EDUCATION ALLOWANCE

18) CASH HANDLING ALLOWANCE 19) WASHING ALLOWANCE 20) SHIFT ALLOWANCE 21) CALL BACK ALLOWANCE 22) DUTY ALLOWANCE 23) MEAL ALLOWANCE 24) ATTENDANCE BONUS 25) ASPHALT ALLOWANCE 26) CORPORATION'S ASSISTANCE TO DRIVERS 27) REDEPLOYMENT / RETIREMENT BENEFITS 28) COMPUTER COMPENSATION 29) FESTIVAL ADVANCE 30) FURNITURE LOAN 31) CONVEYANCE FOR ATTENDING TRAINING PROGRAM 32) TWO WHEELER VEHICLE LOAN 33) COMPUTER LOAN IN LIEU OF REPEAT TWO WHEELER VEHICLE LOAN 34) DAILY ALLOWANCE / TRANSPORTATION 35) WORKING HOURS 36) OVERTIME PAYMENT 37) JOB FLEXIBILITY 38) RATIONALISATION MEASURES 39) LEAVE ADMINISTRATION 40) NATIONAL / FESTIVAL HOLIDAYS 41) UNAUTHORISED ABSENTEEISM 42) LABORATORY 43) SAFETY

44) ATTENDANCE RECORDING SYSTEM 45) PAY ANOMALY 46) PAYMENT OF ARREARS 47) CONVERSION TO MOS 48) INTERPRETATION/IMPLEMENTATION OF SETTLEMENT