AN OBJECTIVE AND UNBIASED OPINION ON THE MINUTES OF ELEVENTH WAGE REVISION SETTLEMENT NEGOTIATIONS HELD ON 22.07.2020
AN OBJECTIVE AND UNBIASED OPINION ON THE
MINUTES OF ELEVENTH WAGE REVISION SETTLEMENT NEGOTIATIONS HELD ON 22.07.2020
1. Though claimed as MOU it is recorded as minutes of the Meeting only.
2. First time, IBA has signed “For Management” and not “For IBA” perhaps to maintain the stand that they are only facilitators and also to avoid any future legal complications.
3. The salient features of the Minutes are as below
A. The Wage revision will be effective from 1.11.2017.
B. The annual wage increase in salary and allowances is agreed at 15% of the wage bill as on 31.03.2017 which works out to Rs.7898 Crores on pay-slip components.
C. New pay scales will be constructed after merging DA corresponding to 6352 points (Average index point as applicable for the quarter of June July and August 2016) and adding thereon a loading of 2.50% on Basic Play plus Dearness Allowance as on 31st March 2017 amounting to around Rs.1155 Crores
D. Distribution of annual wage increase between Workmen and Officers will be worked separately and proportionately based on breakup of establishment expenses as on 31.03.2017.
E. Introduction of Performance Linked Incentive (PLI) which will be based on Operating / Net Profit of the individual Bank. PLI is payable to all employees annually over and above normal salary payable. THE PLI is based on the PLI Matrix depending on the Annual performance of the Bank. All the employees will get the number of days of pay as incentive depending on where in the matrix the bank’s performance fits in, broadly as per Matrix under
Sl. No. | YoY growth in Operating Profit | No. of days for which Salary (Basic + DA) shall be paid |
1 | < 5% | Nil |
2 | 5% to 10% | 5 days |
3 | >10% to 15% | 10 days * |
4 | >15% | 15 days* |
* 3rd and 4th slabs are payable only if the Bank has Net Profit. If a Bank has growth in Operating Profit of 5% & more but there is no Net Profit, then minimum 2nd slab of 5 days will be payable (The PLI will be applicable from FY 2020-21) | ||
F. Encashment of PL permitted at 5 days every calendar year (7 days in case of employees / officers of 55 years and above) at the time of any festival of their choice
G. Increase Banks contribution to NPS fund to 14% i.e 14% of Pay and DA instead of the present rate of 10% prospectively from the date of signing the settlement (subject to approval of Government)
H. All other issues of Managements and Unions / Associations discussed during the process of negotiation will be settled to the mutual satisfaction.
I. Parties will meet on mutually convenient dates to draw out detailed Bipartite Settlement / Joint note and endeavor to finalize the same within a period of ninety days from the date of this minutes.
4. The impact of the above on the starting salary of an officer in Scale officer would be as below. The impact on Basic Pay, DA, Spl. Allowance and NPS deduction only reckoned as these are only uniformly available to all officers irrespective of their place of posting.
Impact on the Salary for officers under NPS | ||
Particulars | Existing as on 01.11.17 | REVISED With 2.5% load in basic |
Basic Pay | 23700.00 | 35904.32 |
| DA @ 51.6% | Remaining DA @ 2.66% |
DA on basic | 12229.20 | 955.05 |
Basic + DA | 35929.20 | 36859.37 |
Spl. Allowance | 1836.75 | 2782.58 |
DA on Spl. All | 947.76 | 74.02 |
Basic + DA + spl. All | 38713.71 | 39715.97 |
Less NPS | 3592.92 | 5160.31 |
NET Salary | 35120.79 | 34555.65 |
Assumptions
- Special Allowance is considered @7.75% only as there is no indication of increase. Any increase will have additional impact.
- NPS Contribution by employee considered @ 14% matching to the Bank Contribution. If it is retained at existing 10% only, there will be further addition in the Net salary.
5. Increase of Bank’s Contribution to NPS and its impact
- This appears to facilitate the Pension Fund Managers (PFM) and boost their Corpus maintained to offset their losses.
- This addition will be appropriated in the 15% allotment only and directly goes to the PFMs and will not be available for the employees.
- This will also be not beneficial to those who are under the pension option.
6. Other monetary benefits like HRA is not taken into account as majority of the officers are availing leased accommodation and any increase in HRA will not be beneficial to these officers. This will in a way benefit the Banks only as the HRA deduction is made based on the starting basic for that particular Scale and the banks will deduct more HRA as the basic will undergo a significant change with addition of DA for the same accommodation without increasing the rental ceiling.
7. CCA is not available to all and only people residing in Cities will be getting it.
8. Encashment of accumulated Privileged Leave is also not much beneficial as in the initial years the officers would not be in a position to accumulate much leave due to leave availed by them or various purposes. Besides the encashed amount for 5 days works out to Rs.7000/- as per the above calculation and after deduction of applicable tax the amount may be an insignificant increase.
9. Five Day banking is not a monetary benefit which cannot be compromised with. Though it is still open for discussion, the grapevine is that the PMO is not in favour of 5 day banking.
10. Regarding Updation of Pension the minutes are silent. Under the prevailing circumstances indicated in the minutes on the economic scenario of the nation and financial position of the banking sector, it will be tough to accomplish.
11. Family Pension - Though the beneficiaries may be less in numbers still this is appreciable but the real benefits cannot be enjoyed by the family pensioners without corresponding updation of pension.
12. Medical Insurance Scheme – As per the Tenth BPS it was believed that the premium will not be increased till Eleventh BPS. However, premium has been increased on annual basis without any corresponding increase in the insurance coverage though costs of medical facilities have shot up in the interim.
The increase in premium was facilitated to make up for the losses of the insurance companies but no benefits percolating to the Bank employees.
If at all employees are to be benefited, the Medical Insurance Scheme implemented in SBI should be made available to all the banks and the corpus can be managed on our own instead of paying premium and profits to the insurance companies.
13. Regarding the PLI, though it appears to be over and above the wages, it is indeed disheartening to note that the officers and employees are divided in the industry based on the profitability for which they are not responsible and it is more so, when already there is a grudge of non availability of uniform perks and facilities and some banks are permitting additional increments after the settlement, despite the entry in to banking sector is through a uniform and tough screening process.
Instead of encouragement, it may have negative impact of demoralizing the officers.
14. No word on the running of scale of pay which may result in the early stagnation of the salary of the youth as the promotional opportunities linked to increments will be shrinking due to amalgamation, automation and youth occupying higher destinations and designations.
15. Way out,
A. Still we can demand the introduction of the need based salary which is the universally accepted model and is being adopted to fix salary for the government employees instead of linking to the paying capacity and profitability which is decided more by the Government policies than the contribution of the officers and employees and also the salary equal to group A officers as the officers are equated to them by the GOI.
B. Government has published the code on wages act for the stake holders response and there is an indication to bring it to action in September and so, we can demand after waiting for such implementation.
C. The Indian youth joined in the bank with dreams may continue to sacrifice and work for the nation’s welfare for some more time till the next wage revision talks are opened.
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