WAGE REVISION- The Issue of Relaxation
-R.Pattabiraman
(Sorry to bother the comrades concerned. This note is to educate those
interested and get myself educated on this issue. I am an ordinary ex-soldier
and I understand my limitation. I understand the convenience of ignoring this
note also but on reading this, if somebody comes forward to educate me further,
I shall feel thankful ...)
The struggle for wage revision is making routes on three tracks. The
first one is joint struggle of both Executives and Non Executives on the
platform of AUAB for seeking relaxation of affordability clause, a conditional
clause in the order of Executives and 3rd PRC. The second is purely by Non
Executives in their wage Committee to arrive at the necessary agreement or MOU
to implement wage revision for Non- Executives. The third one is the struggle
of all central unions for abolishing and nullifying the applicability of affordability clause.
The Executive wage revision helped last time in 2007 on three
aspects. One is wage revision for them,
second is equivalent fitment benefit for Non- executives and the third one is
Pension revision on the same formula. This time also Unions are demanding the
same 15 % fitment formula as given by 3rd PRC and jointly purse the
same with executive Unions. For the Non- Executives DOT has endorsed the 8th
round guidelines so belatedly thro its letter dated April 27th and advised BSNL
to take steps with strict compliance with the DPE instructions of Nov 24th 2017.
Amongst the loss making Units
BSNL is the sector where serious efforts are being witnessed inconnection with
the issue of Wage Revision. The Unions and associations are trying their best
by their continuous struggles to get the wage revision implemented from 1-1-17
with the 3rd PRC 15 % fitment. They made headway to bring DOT to the
negotiating table and found some mechanism to carry on the discussion with the
heavy task of bringing the same to the desirable end. The pressure is that the
solution should be attained before election notification and the concern is to
settle the issue with this govt itself in order to avoid further delay due to
any change of new Govt.
The Central Unions are demanding withdrawal of affordability clause and
advising the BSNL Unions not to go alone the struggles (Hyderabad PSU Unions declaration).
Even voices are coming not to get into the trap by asking relaxation of affordability
clause. The unfortunate thing is that no one is questioning them what they did
in the last ten years for the removal of affordability clause, why they failed
to give a common note to 3rd PRC demanding some provision for wage
revision to loss making units. Even after reading the 3rd PRC Report
why they failed to address the issue of Affordability by taking the issue
collectively to DPE/ Ministry of Heavy Industries, DOE/MOF and PMO. Of course
the yearly general strikes are there but that is more to expose the existing
Govt than trying to bring settlement of the issues.
Sloganeering ‘Wage Revision is
our right’ may be right as everyone is having right to seek some rights. But ‘making
that right to realize’ needs continuous efforts and acceptance
of all the concerned stake holders. This demands a mix of negotiating skill and struggles as
and when need.
II
The Affordability clause in its true sense was inserted by Rao, the 2nd
PRC and made complicated by Sathish Chandra, the 3rd PRC. Earlier
the Mohan Committee though spelt
profitability for consecutive 3 years, there was also a clause for loss making
units to get their wage revision.
In the earlier Guidelines this stringent clause was not found. During
these periods Wage negotiations were allowed
if resources found even not profit. Another positive clause found in
early 1990s was that the agreement between Unions and Management need not be
sent for the approval of the Ministry or DPE.
1999 Guideline of DPE:
“PROCEDURE FOR APPROVAL AND ADOPTION OF NEW SCALES OF PAY ON IDA PATTERN
BY PSEs Annexure 6
(a) PSEs which have been making profit consistently for the last 3 years
viz. 1996-97, 1997-98 and 1998-99 would be allowed to adopt the scales of pay
for the executives holding posts at and below the Board level and non-unionised
supervisors strictly in accordance with these guidelines.
(b) PSEs which did not make profit during the last 3 years viz. 1996-97,
1997-98 and 1998-99 or had incurred net loss during any of these financial
years would also be allowed to adopt these scales of pay of their executives
holding posts at and below the Board level and non-unionised supervisors with
the approval of the Government i.e. the administrative Ministry acting in
consultation with the DPE, provided they give an estimate as to how resources
would be generated by them to meet the extra expenditure.” (DPE(WC) dated 25th June, 1999)
1992 Guideline of DPE:
Though there was no PRC in 1992,
one can find the same provisions
issued by DPE
“1992 Wage Revision PROCEDURE FOR APPROVAL AND ADOPTION OF NEW SCALES OF
PAY ON THE IDA PATTERN BY PSEs- Profit
making PSEs loss making PSEs and PSEs before BIFR:
a. PSEs which have been making profit consistently for the last 3 years
viz. 1991-92, 1992-93 and 1993-94:- These PSEs would be allowed to adopt the
scales of pay for the executives holding posts below the Board level and
non-unionised supervisors as given in Annexure -I
b. PSEs which did not make profit during the last 3 years:- PSEs which
did not make profit during last 3 years viz, 1991-1992, 1992-93 and 1993-94 or
had incurred net loss during any of these financial years would also be allowed
to adopt these scales of pay of their executives holding posts below the Board
level and non-unionised supervisors with the approval of the Government i.e.
the administrative ministry acting in consultation with the DPE, provided they
give an estimate as to how resources would be generated by them to meet the
extra expenditure.”
2nd PRC
The recommendations of second PRC Rao committee for Executives were
implemented by the DPE guidelines issued during November 2008. The PBT clause
was inserted for the affordability and the expenditure was also linked
restricting 20 % of PBT to have full fitment formula and if more than that then reduced fitment
implementation was allowed. Thus the
affordability clause was limited strict to PBT and no relaxation to any loss
making units found in that guidelines. This
limitation was extended to the workmen when guidelines issued during
2013 for the second part of 7th round when the workmen of 5 years periodicity demanded their next wage
revision due from 2012. In the guidelines we found the affordability
restrictive clause first time for the workmen (non executives). Instead of
‘resources or profit’, the clause was changed as ‘affordability and financial
sustainability’
3rd PRC
The satish Chandra committee , the 3rd PRC recommended 15 %
increase in pay only to the companies that are profit earning that also with a condition of financial impact linked
with PBT( profit before tax). The affordability factor is fully linked with PBT
factor not for mere one year as that of 2nd PRC but with 3 previous
years. The financial impact for full 15 % wage hike is also restricted with the
financial impact of 20 % of PBT. A company having profit of say 1000 crores
(PBT) may be allowed to
implement 15 % hike only when the expenditure for the wage revision is well within 200 crores that is 20 % of PBT. If the
expenditure is higher, then the hike is reduced to 10 %, 5 % and no benefit
after that.
DPE 3-8-2017 for Executives 3rd PRC Affordability: The revised
pay scales would be implemented subject to the condition that the additional
financial impact in the year of implementation should not be more than 20 % of
the average PBT of the last 3 financial years preceding the year of
implementation. If within 20% then uniform full fitment benefit of 15 % would
be provided
DPE OM dated 24th NOV, 2017
WAGE POLICY FOR THE 8TH ROUND FALLS DUE ON 1-1-17
2.1 Managements would be free to negotiate wage revision for workmen
where the periodicity of 5 years or ten
years has expired generally on 31-12-16 keeping in view the affordability and
financial sustainability of such wage revision for the CPSEs concerned
III Relaxation decisions Hitherto:
1.DPE OM dated 2nd/4th August, 2011 by the Department of Public
Enterprises, Ministry of Heavy Industries and Public Enterprises, Government of
India. Para 3 of this memorandum is in the following terms:-
"3. DPE is of the view that all those CPSEs that are on 1987 or
1992 pay scales should at least be brought on 1997 pay scales. Administrative
Ministries/Departments of the CPSEs which are sick/loss making and are still
having 1987 or 1992 pay scales, therefore, need to consider bringing these
CPSEs to 1997 level, based on affordability and if necessary, may consider
obtaining funds through budget allocation for this purpose."
As per Cabinet approval dated 16.09.2015, improved VRS was implemented
for the employees of respondent no. 2 on 13.10.2015 for a period of 3 months
only with better terminal benefit by notionally arrived at IDA linked 2007 pay
scale formulated by the DPE for CPSUs."
2. PIB 28-February-2014
VRS package for the employees of Hindustan Photo Films Mfg. Company
Limited
The Cabinet Committee on Economic Affairs has approved the proposal for
providing non-plan budgetary support of Rs. 181.54 crore for VRS at 2007
notional pay scales as one time relaxation of DPE Guidelines for all employees
of Hindustan Photo Films Mfg. Co. Ltd. (HPF), Udhagamandalam (Tamil Nadu). This
is a Central Public Sector Enterprise [CPSE] under the Department of Heavy
Industry [DHI], Ministry of Heavy Industries & Public Enterprises
(HI&PE).
Employees of the company are in the 1987 pay scale. With the increased
cost of living, it is very difficult for them to survive and meet their
immediate financial obligations. With this decision employees will come out of
their current financial crises. The enhanced VRS will also help HPF employees
in their post retirement rehabilitation.
3. Cabinet decision for Coal India 14-10-2015
Union Cabinet has given its nod to the Permission for loss making
subsidiaries of Coal India Ltd. (CIL) to adopt 2007 pay revision as an
exception to the prescribed affordability clause and payment of Performance
Related Pay (PRP) to executives and non-unionised supervisors of all
subsidiaries of CIL
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi, has
approved the recommendations of the Committee of Secretaries to regularize the
2007 Pay Revision implemented by Coal India Limited (CIL) with effect from
01.01.2007 in the loss making subsidiaries. This is being allowed as a special
dispensation to CIL. However, this special dispensation to CIL will not be
cited as a precedent by other loss making Central Public Sector Enterprises
(CPSEs).
4. DPE 3-8-2017 for Executives
Companies under a statute to perform specific agenda- that the impact of
the revised compensation supposedly form the part of revenue stream for such
PSUs ( no budgetary support), the affordability condition shall not be
applicable to these CPSEs subject to approval of Ministry upon agreeing and
ensuring to incorporate the impact of the revised compensation structure into
the revenue stream. ( DPE clarified that BSNL is not coming in this clause)
IV
Govt’s Position for 3rd Wage revision for
BSNL
1. Telecom DFG LS 47th Report march 2018
Reduce salary burden
consider VRS at the earliest
Commercial exploitation of lands- 15192 parcels of land- 4030 prime
parcels with value 70524 cr-
Approval of DOT for 7 pending- rev 1057 cr- but specific approval of
cabinet in each case is needed
Assistance in the form of subsidy given by Govt. to BSNL is Rs 13028
Crore (from 2007-08 to 2016-17). On the assistance still required, it is stated
that Govt. to continue the assistance to BSNL in the form of giving Govt.
projects on nomination basis.
MTNL was classified as “Incipient Sick CPSE” as per DPE Guidelines. MTNL
has engaged M/s Deloitte as Consultant for providing “Advisory Services” for
revival plan of MTNL. The revival plan prepared by M/s Deloitte was considered
by MTNL Board and forwarded the same to DoT for consideration.. DOT is
examining the report
The committee desire that revival plan in the line of ITI ltd may be
worked out and implemented in the case of MTNL. No delay in that- VRS for 20 %
of staff
2. DPE lr to NFTE BSNL
dt 31st Jan 2018
On the request for affordability
exemption referring NFTE's lr 22-12-17
received thro PMO 5-1-18 thro DOT 16-1-18 on the sub -
DPE nov 24th 2017 for 8th round
based on Govt decision therefore for any exemption in respect of any clause of
DPE 24-11-2017, the approval of the cabinet is essentially required. You are
requested to approach DOT to examine the rep accordingly to take appropriate
decision thereon. ( copy was also marked
to pawan gupta dir PSU 1 DOT- Even after this information DOT is silent on this
aspect of Non executives pertaining to the clause of affordability and
financial sustainability)
3.DPE wage cell OM dt 18-4-18 addressed to DOT
(With Reference to DOT OM dt 20-3-18)
As per DPE guidelines, BSNL does not fall under the category mentioned
in para 5 of 3-8-17. Affordability clause decision is based on the committee of
secys on 3rd PRC.
Any relaxation/ amendment in the extant guidelines would require the
approval of the cabinet for which DOT may examine the issue at its end for
necessary action
4. Reply
to LS QN 1-8-18
Since BSNL has incurred losses consecutively for the last three years,
BSNL has been declared as “Incipient Sick” as per the guidelines of Department
of Public Enterprises (DPE). Accordingly, action has been initiated by the
Department of Telecommunications (DoT) for preparation of revival/restructuring
plan of BSNL.
5. Reply to LS QN 8-8-18
BSNL is not covered by affordability clause of DPE OM dated 03.08.2017
as it has been incurring losses for 2016-17, 2015-16 and 2014-15. Based on
proposals and representations received, a reference was sent to DPE whether the
affordability criteria can be relaxed for implementing pay scale revision in
BSNL as per 3rd PRC.
DPE has clarified that BSNL does not fall under the category mentioned
in Para 5 of DPE’s OM dated 03.08.2017 and indicated that any
relaxation/amendment in the extant guidelines would require the approval of the
cabinet and Department of Telecommunications (DoT) has to examine issue at its
end. The matter is under examination( This reply is also silent about Non
executive’s 24-11-17 clause of affordability)
6. DOT letter to CMD dt 6th
NOV 2018
The matter of affordability of BSNL to pay 15% annual impact Rs 4300 cr, for which the
present finance status/position of BSNL
may not permit to accommodate the extra burden without support from
other sources...
You are requested to submit a concrete viable proposal with a detailed
analysis on the above points among other that you consider relevant to enable
this Department to further examine the proposal.
7. DOT OM dt 7th Jan 2019- Status of Demands
Regarding wage revision of Non executives DPE had issued Om 24-11-2017
to negotiate keeping in view affordability and financial viability. CPSEs are
required to revise the wages after negotiations and to intimate to the
admn dept about the arrived wage settlement for wage
settlement for ensuring conformity with approved parameters. This was intimated
to BSNL vide our lr dt 27-4-18, It is now for the BSNL management to implement
wage revision for their non executive employees.
V Experiences
and way out
1.The Executives of Coal India loss making unit got relaxation for wage
revision of 2007 after 8 years of struggles in a different context on the justification of one method of recruitment.
The Coal India is taken as one unit for PBT. But Telecom is not one unit ( MTNL
BSNL TCIL BBNL IIT etc not taken as
single unit of telecom -TCIL got wage revision with 15 % ). Though 2014
was election year, they could not get it in that year but got in in 2015. One
may claim that Our militant struggles and negotiating skills may give us better
results early, no doubt. Mere hurry alone will not suffice. It seems that the
struggle is a long drawn one. Best result with least expenditure of Soldiers’
energy is always a guiding path for any mass movement to sustain and keep
momentum.
2. DOT is doing correspondence on the issue of BSNL's proposal for
Executives and advising the BSNL to come out with some viable proposal to
enable DOT to take up the issue to the logical end. But in the case of
Non-Executives, DOT is trying to advise all the concerned to arrive at the
required agreement for its perusal and keeping itself distance and showing
hands off. It means no proposal for Non- Executives is on the table of DOT to
issue PO/ to take to Cabinet .
DOT is saying that It is now for
the BSNL management to implement wage revision for their non executive
employees. DOT is dishonest and not
properly guiding the BSNL regarding the clause of affordability for Non
Executives. Suppose 15 % fitment is made as agreement and sent for PO to DOT,
then whether DOT will approve it and issue PO when the proposal for Executives
is pending for preparation of cabinet note and approval.
3. One should clarify that relaxation for Executives of DPE dt 3-8-2017
itself is enough for Non Executives also for the issue of PO. Is there no
meaning for the letter issued by DPE to NFTE that any relaxation for Nov 24th
2017 needs cabinet clearance. This issue is yet to be clarified thro minutes of Non Executives wage revision
committee.
Non Executive Unions if they feel agreement is not possible or fruitful
before any proposal is accepted by DOT/cabinet for Executives then that should
be educated to the concerned members and expose DOT for its tricks of double
standards on technical basis. HRA issue is a side track one comparing wage
revision.
4. Next clarification needed is if relaxation is given for wage revision
then what is basis for calculation of expenditure for giving 15%/10%/5%
5. Another clarification needed is whether Pay revision is going to be
linked with any Revival/restructuring plan .
BSNL has given in its non executive wage committee minutes that as on
date there is no approval plan but DOT
should clarify this aspect and
should be transparent on this issue as IIM report is already found
light.
5.Central Union may take
settlement oriented initiatives, if at all they are serious on loss making
units. Organising separately the workers belonging to all loss making units and
bringing the Govt to the negotiating table
thro dialogues and struggles is the task before central unions. They may demand the insertion of the clause that loss
making units may also be allowed wage
revision if resources found as existed in the age old guidelines.
Atleast one demand will help
almost all the 70 loss making units to adopt 2017 new scales. Why different
units whether profit making, loss making are in different scales like 2017, 2007, 1997 etc and getting different IDA orders issued for these
different scales by DPE. What is the problem of financial sustainability by
making the new 2017 scales applicable to all PSus. It is like conversion of old
scales to new scales with new IDA.
The above demand is when any new scales are introduced, it is better if
it is introduced to all PSUs as per PRC. IDA merger on a particular date is not
wage enhancement- It is subsumption- it is correction of inflationary erosion
on the real wage announced 10 years back. Fitment is wage enhancement. Graded
fitment is understandable. But refusal to enter into new scales is
discrimination.
The amendment needed in 3rd PRC DPE guideline is “Allowing
every PSU including the loss making PSUs to 2017 scales and graded fitment as
per PBT ”. This one is accepted then that will be a better solution till the
issue of affordability clause is once for all withdrawn. This will be a better
position than merely standing on old scales like 2007 or 1997.
The ruling circle is not in favour of the wage revision for the loss
making PSUs. The road to travel may demand long drawn struggles to make the
Government to yield for getting either the necessary amendments in the existing
guidelines or seeking one time exemption to BSNL.
21-1-19
No comments:
Post a Comment