Millennium Post

Waging war for wage hike

When finance minister P Chidambaram met the top honchos of the 26 public sector banks (PSBs) for a quarterly performance review meeting in New Delhi on 22 October, they discussed a whole range of concerns of the sector, like the growing non-performing assets (NPAs), but a crucial item was missing from the agenda: the wage revision for about eight lakh bank employees that has been pending for a year.

While the red carpet was rolled out to receive the minister at the SBI office on the Sansad Marg, a few metres away from it the scene was quite different. Bank employees gathered at the nearby Allahabad Bank to stage demonstrations in the afternoon against the delay of wage revision announcement. The protest held under the banner of the United Forum of Bank Unions (UFBU), a conglomeration of nine unions of PSB employees, was to remind the FM about the impending wage revision.

‘The government has already formed the seventh pay commission for the central government employees two years ahead of schedule, but there is no forward movement for the wage revision of banking staff,’ says Sunil Bansal, who heads the Delhi chapter of the All India Bank Officers’ Confederation (AIBOC), the body representing officers of PSB.

On the same day, the bank staff also held demonstrations in different cities across the nation, against ‘delaying tactics’ of the Indian Bank Association (IBA), the Mumbai-based management body of all banks. Unlike the central government where a pay commission deliberates on wage revision, in banks it is done through bipartite negotiations between the employees’ unions and the IBA.

The last time the bank employees’ wages were revised was in August 2010, following the ninth bipartite negotiations (implemented with retrospective effect from November 2007). Given its five-year cycle, the next revision is due from November 2012, and to decide on it, the new round, the 10th, of bipartite negotiations started late last year. There have been four meetings between the unions and the IBA, but the employees are now impatient. So on 21 November, nine unions under the banner of UFBU is sitting once again to decide the future course of action.

The UFBU submitted its charter of demand on 30 October 2012 – a day before a new bipartite settlement due for implementation. But it was only six months(22 April 2013) hence that the IBA held first meeting with unions on wage revision. The 22 October protests came after the fourth meeting, on 11 October in Mumbai, remained inconclusive. The bipartite talks have now meandered for a year and seem heading towards yet another protracted negotiation, like the ninth bipartite negotiations for the period 2007-2012 that took roughly two and half years.

‘Since there was no satisfactory progress towards wage revision and it is unduly delayed, the constituents of UFBU decided to express their dissatisfaction,’ says MV Murali, convenor of UFBU, an umbrella body of all nine unions representing bank employees of 26 public sector banks.

Adds Bansal: ‘Against the backdrop of high inflation and astronomical price rise in the last few years, the bank employees were hoping and even promised of quick negotiations and settlement of a new pay structure. Sadly, the promise has not been fulfilled.’ The timely increase in bankers’ salaries has become an imperative also because of human resource concerns of PSBs. To take stock of these concerns, the government constituted a committee under the chairmanship of A K Khandelwal (former chairman and managing director of Bank of Baroda) in 2010, which submitted its report in 2012, flagging an acute shortage of talent in PSBs. It noted, ‘The fresh graduates are reluctant to join a government bank as they failed [sic] to provide concrete career growth path to their employees.’ At a time when the government has pushing banks to open more branches in rural and semi-rural areas to fulfill its social objectives like financial inclusion, the PSBs are also hit by an attrition rate that has increased significantly in the last few years. ‘With the advent of new private sector banks and foreign banks, the creamy layer of employees will leave PSBs to work for them. We are facing shortage. We are urging the government for an early settlement of wage revision,’ says Harvinder Singh, general secretary of AIBOC. He says that in India, the new recruits generally use the PSBs as a launch pad for their career to move on to more lucrative jobs with private banks.

Reminiscing about the good old days when a job in a bank was a matter of status, Singh says the salary of the junior most bank officer was equivalent to class-1 officer of the central government till the early 1980s. ‘Now he gets Rs 8,000 less than the class-I officer in terms of the basic pay,’ he adds.

After the first round of bank nationalisation in 1969, the government set up the Pillai committee in 1973 to standardise the pay scales, allowances and perks of employees of different banks. The committee submitted its report next year, and it was accepted in 1979, taking on board the suggestions made by a Study Group of Bankers. On the basis of the report, the government put the salaries of the bank employees on par with those of the central government staff. However, over the next decade, while the salaries of the central government staff went up thanks to pay commissions, the bank employees did not benefit as much from bipartite negotiations.

As the negotiations went on for two and a half years last time, the current round might seem at only an early stage. ‘It has become a tradition to extend the discussion,’ says Harvinder Singh of AIBOC. Bank employees fear that the current negotiations are likely to go the way of the previous ones. And the lurking danger for them is the upcoming general elections. ‘Given the complexities involved and the political scenario in the country, I don’t see the wage revision happening any time before the general elections,’ says Yogesh Kumar, chief manager of Syndicate Bank.

‘Wage revision is a complex process and involves discussions at various levels. It generally takes around a year or a year-and-a-half to take a final call and we’ll have completed a year of discussions this month (November). We should just give it a few more months and things will be finalised,’ clarifies Shubhalakshmi Panse, chairman and managing director (CMD) of Allahabad Bank who as a CMD of a PSB is a member of the IBA.

The bank unions blame the government and IBA for the protracted negotiations.

After the unions submitted a charter of demands to IBA on 30 October, 2012, the two sides have been striving for collective bargaining. Union leaders point out that during their first meeting in late 2012, IBA had promised to settle the matter by August 2013.

‘While various other issues were taken up and discussed, IBA did not come up with any concrete proposal on our main demand for wage revision,’ alleges S P Sharma, general secretary of All India Dena Bank Employees’ Co-ordination Committee.

The last meeting between the IBA and UFBU took place on 11 October in Mumbai, represented by the IBA core committee, RK Dubey, CMD of Canara Bank.

During the latest talks of 11 October, the IBA side was led the head of its negotiations team, R K Dubey, CMD of Canara Bank. ‘In that meeting, we discussed some of the pending issues. We have requested the IBA to revise our dearness allowance (DA) compiled under 2001-series with the existing basic pay and revision of DA on monthly basis. The consumer price index (CPI) points under 1960-series are no longer compiled. Not a single issue has been resolved by the IBA. They (IBA) said that they don’t have the mandate to provide the quantum of wage revision. They will come back on the issues after talking to the government. It has only a postman-like authority,’ accuses Singh of AIBOC.

The All India Consumer Price Index was 1st taken in the year 1960. Percentage of average price is taken as Consumer Price Index. As 1960 being the base year, CPI will be 100 on that year.

Labour Department of India releases All-India Average Consumer Price Index Numbers for Industrial Workers every month (Base 2001=100). Bank employees D.A is calculated on CPI based on year 1960.

(With inputs from Srishti Pandey)
By arrangement with Governance Now
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