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TENTH BIPARTITE SETTLEMENT APPROACH PAPER

SOME IMPORTANT
FACTS

THEIR IMPLICATIONS

STRATEGIES TO BE ADOPTED BY THE UNIONS

Revised pay scales will


depend on the point at
which the existing D.A. is
merged with the present
basic pay.
Distribution of the load
factor
(Quantum
of
increase ultimately agreed
upon by both the parties
IBA and the Unions)

Merger of D.A. prevailing on a particular date is yet to be


decided. Once the cut-off date is mutually agreed upon,
the applicable quarterly average of AICPI-IW
(Base:1960=100) will be taken into account so as to
arrive at the revised pay scales.
Once the load factor is decided and agreed upon,
distribution of the increase calls for wise calculations in
apportionment of the increased wage bill.

More than one lakh


personnel will retire on
attaining the age of
superannuation between
01-11-2012 and 31-122015, in the entire banking
industry. Of this, about
80% will be from the public
sector banks and 20% will
be from the private sector
banks.

On Provident Fund
Since most of the bank staff have opted for pension,
banks need not contribute more on this account.
However, banks must be prepared to pay back the
employees contributions with interest in lump sum, as
and when they retire.

Detailed statistics have been worked out in the form of a Table given
separately. Based on the figures given therein, unions have to hone up
their negotiating skills and clinch the best deal for the bank staff. As can
be understood, only the revised scales of pay under 36 different (9 X 4)
scenarios have been discussed and compared in this Table.
Increase in Basic Pay is always helpful and the most desired one, because
the P.F., D.A., H.R.A. and other Allowances, Gratuity, Monthly Pension,
Commutation of Pension, Encashment of Leave etc. depend on the basic
pay only. In the past, there was not much increase in the officers basic
pay, whereas the award staff, that too sub-staff have been consistently
getting a better deal at the time of each wage revision. This has resulted
in a very peculiar and irrational situation wherein the Sub-staff and Clerks
at the senior level getting higher wages than an MMGS II Officer. This
shall be avoided this time.
It is suggested that priority may be attached to the following components in
the given order.
1. Basic Pay: 65% (Basic Pay here includes all allowances ranking for
P.F.)
2. Pension: 20%
3. Other Allowances: 15%
On Provident Fund
P.F. must be computed at 12% of the revised Basic Pay plus D.A.
Similarly, Interest payable on the balances in Employees P.F. account
must be not less than at the maximum Rate of Interest payable by the
respective banks to the general public on their Term Deposits plus 1% p.a.
additional interest payable for the staff deposits. As of now, this interest is
calculated only at half-yearly intervals. Instead, from 01-11-2012 onwards,
interest on P.F. must be computed and applied at the end of each quarter.

On Payment of Pension
Banks must mobilize adequate funds to pay commuted
pension to all the staff who retire. It will be a large payout in the near future. Moreover, banks must provide for
payment of revised monthly pension to all the eligible
staff in all grades and scales in the months to come.

On Payment of Pension
Pension must be automatically revised basing on the revised pay scales to
all the retirees, without having regard to the date of their retirement.

On Payment of Gratuity
With the increased pay scales, the gratuity payable will
shoot up sharply.

On Payment of Gratuity
Increase in gratuity amount as a result of wage revision shall be kept
outside the wage load to be agreed upon.

On Payment of Future Wages


With large scale exodus, banks will be comfortably
placed to meet the increased monthly wage bill and
other staff costs, without any delay or difficulty.

On Payment of Future Wages


Because of large scale retirement of senior staff in all grades and scales,
the overall staff costs will come down considerably even if we take into
account the new recruitments in the next 3 years.

SOME IMPORTANT FACTS

THEIR IMPLICATIONS

STRATEGIES TO BE ADOPTED BY THE UNIONS

7th Pay Commission for Central


Government employees may be
constituted any time during 2014 and
those recommendations made by it and
accepted by the government will be
implemented in 2016.

The 10th Bipartite Settlement will be operative from


01-11-2012 to 31-10-2017. During the time of its
operation, 7th Pay Commission recommendations
accepted by the government will be implemented
from 01-012016. Therefore, unless we wake up
now, the disappointment, anguish and heart-burn
of bank staff will only multiply. It will not augur well
for the trade unions in banks and their leaders.
As was the practice hitherto, levy as a certain
percentage of the amount of arrears payable was
collected by the unions from each of their
members. Because of the undue delay in wage
revision, the arrears amount as well as the levy
amount was very huge. This made windfall gains
for the unions and their leaders. Therefore, they
did not understand the impatience of the members
and did not show true spirit and enthusiasm in
reaching the settlement as quickly as possible.
This will reduce the one time burden on the SCBs
as the increased load will be distributed over the
next 8 to 10 quarters (i.e. 3 financial years ending
March, 2013, March, 2014 and March, 2015).

Already, there is a wide gulf between central government staff


wages and other benefits and our own. Such being the case, if we
dont make an earnest attempt to bridge the gulf this time, we will
lose the opportunity forever. Then there will be no point in just
talking about the unfair and unjust treatment meted out to the bank
personnel in the past. Nothing concrete will emerge out of such
discussions or complaints. We have to blame ourselves only, for
the opportunity lost.
Past trends reveal that the 10th bipartite settlement is not likely to
be signed before March, 2014. Therefore, the members must
compel the unions to accept the levy amount expressed as a
percentage of the increase in the net salary of November, 2012.
The levy thus fixed may be at 30% of the increase in the net salary
of November, 2012. This will ensure that the trade unions and
their leaders cannot derive any windfall gains, due to the long
delay in reaching the settlement. The underlying logic is people
shall not be rewarded for their apathy, inefficiency and
procrastination.
My understanding is that the banks will agree to set aside 10% of
their present staff costs as year-end provisions, because in any
eventuality, the wage hike cannot go below this level (10% per
year).

It must be remembered that each point in 2001


series is equal to 22.8259 points in 1960 series. In
terms of slabs, 1 point in 2001 series is equal to
more than 5 slabs in 1960 series. It is not
necessary that the rise will always be in full
numbers/points in 2001 series. Suppose there is
an increase of 44 points in 1960 series, there will
be an increase of 11 slabs. But for the same level
of increase, only 1 slab increase will be permitted if
the 2001 series is adopted as the benchmark.
Award Staff Unions have demanded 110% for
Clerks and 120% for Sub-staff. The officers
unions have demanded 125% for their members.
The award staff unions are silent on this point,
whereas the officers unions have asked for merger
of D.A. with the basic pay at the end of every 2
years.

Unions must insist upon continuing with 1960 series only, as any
fraction of a point increase in 2001 series will not bestow any
benefit to the staff. We will be put to loss, if a fraction of a point in
2001 series is always omitted.

Payment of Levy on Arrears

Provisions to be made by all SCBs from


the Quarter ending December, 2012
onwards, to take care of the increase in
staff costs from 01-11-2012 as per RBI
suggestions to banks.
While all the award staff unions have
jointly chosen the All India Consumer
Price Index Series 2001=100 for D.A.
merger, the officers unions have
demanded
the
continuance
of
1960=100 index series.

D.A. Compensation for increase in the


Price Index
Periodic merger of D.A. with the Basic
Pay regardless of the periodical wage
revisions.

There is lack of consensus on this score. All the constituents of


UFBU must uniformly demand 120% for their members,
regardless of their rank and grade.
The better strategy will be asking for merger of D.A. with the basic
pay if and when either of these two happens first.
(a) D.A. crosses 50% of the Basic Pay
(b) 3 years period has elapsed from the last settlement.
This will ensure that the staff are not affected by the undue delay
in the next wage revision. The banks also will be in a position to
assess their liability on this score more realistically and no
separate provision needs to be done for this purpose.

SOME IMPORTANT FACTS

THEIR IMPLICATIONS

Load factor is a very sensitive and


critical aspect of every wage
revision. Entire wage revision
exercise
hinges
on
this.
Therefore, the exact amount of
increase (load factor) agreed
upon
will
determine
the
characteristic (success or failure)
of a particular wage revision.

Award Staff have demanded an increase of


30% for Clerks and 35% for Sub-staff after the
reconstruction of new scales post D.A. merger.
The Officers Unions are not very specific on
this aspect.

(Contributed by Pannvalan pannvalan@yahoo.co.in ;

STRATEGIES TO BE ADOPTED BY THE UNIONS


1. Considering the fact that the last stage (S 34) in the central
government pay scales granted by the 6th Pay Commission is
Rs.90,000, there will be resistance from the bureaucrats, if a
higher basic than this level is considered for GMs (TEGS VII).
2. Therefore, in all probability, the maximum scale of pay for
officers may be allowed to be fixed at a slightly lower level.
Then, the revised basic pay in such case may not cross 1.731
times the existing basic.
3. If we keep this fact in mind, the cut off point for merging D.A.
may be chosen as 30-09-2010. At this point, the AICPI was
4068 and the D.A. applicable was at 46.20%.
4. Post merger at this level, 15% increase may be given as
additional load. This translates into the new basic pay getting
fixed at 1.6813 times the present basic pay.
5. To illustrate further, at the start of the scale, the revised basic
pay may be Rs.24,400 (approx.) as against the present basic
of Rs.14,500. At the end of the scale, the revised basic pay
may be Rs.87,500 (approx.), as against the present basic pay
of Rs.52,000.
6. There is also a possibility of fixing the starting basic for JMGS I
officers at Rs.26,000 to attract the best talent. At present, out
of every 100 persons appearing for the written test, only 70
persons ultimately join the bank. Among them also, the
persons taking up banking as a serious career will be less than
80%.
7. To retain youngsters and to arrest the high degree of attrition
(about 12%) now witnessed amongst the new recruits, higher
initial start as suggested above may be considered at the
industry level.
8. The annual increment at each stage may be 3 to 4% of the
existing basic pay.
9. If promotion cannot be given to any officer (in any grade/scale),
one stagnation increment equal to the last drawn increment
must be given at end of every 2 years, till ones retirement or
promotion to the next higher grade/scale.
10. FPP must be equal to the last drawn increment. PQP 1 must
be equal to the last increment drawn and naturally, PQP 2
must be twice the last increment drawn.

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