IDA Neutralisation and Pay Revision
Some Facts and considerations to understand the issue
· DPE letter to NFTE BSNL dt 31st Jan 2018
(On the request for affordability exemption referring NFTE's letter dated 22-12-17 received thro PMO 5-1-18 )
DPE November 24th 2017 OM for 8th round based on Govt decision- therefore for any exemption in respect of any clause of DPEOM dated 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
· 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 secretaries 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
· Reply to LS question dated 8-8-18
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
· DOT letter to BSNL CMD dated 6th NOV 2018
The matter of affordability of BSNL to pay 15% fitment - 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
· BSNL letter dt 4th Dec 2018
Enclosing copy of discussion with DOT issued on 3-12-2018 : Meeting with rep of AUAB and MOC secy DOT, Addl secy, Member F S T CMD, Dir HR
3rd PRc issue under consideration and certain additional inputs are required. BSNL management will work out a viable proposal regarding Pay Revision. It was informed by the CMD that for NE wage revision negotiations are in the final stage. Minister (Moc) for expeditious decision by according due priority to this demand
· Wage Committee Draft dt 11-12-2018 some features
Proceedings of the Jt committee 11 pages draft : mentions about DPE OM 24-11-2017 and its DOT forward dt 27-4-2018 confirming with admin ministry may implement wage settlement. Wage Committee held 7 meetings from 20-7-18 to 9-10-2018 and staff side demanded 15 %, span 43 stages scales as per 3rd PRC and the minimum 2.44 of the scale.
3. Management side informed about affordability clause as per 3rd PRC, BSNL do not qualify. As per DPE 24-11-2017 NE salary in no case exceeds the minimum of Executive and so the fitment and scales will be subject to the outcome from the Govt on the proposal to Executive revision. Then process of seeking approval of Remuneration Committee, BSNL Board and Admin ministry. Once all these approvals obtained the agreement will be signed.
4. Guiding Principles of Pay revision:
Full DA nuetralisation 119.5 % as on 1-1-2017.
No conflict with Exeutive scales, assuming 15 % fitment. Minimum 2.44 times as taken for E1. Minimum E1 is 40000 and so NE 12 is 39900.
NE1 proposal 19000- 45700 (7760-13320 NE 12 39900 -114800 ( 16390- 33830)
IDA 119.5 may be neutralised and on 1-1-2017 DA becoming zero. DA rates as per DPE.
HRA as per the existing rate.
The new 3rd PRC will be decided at appropriate time by the board. Other allowances as per the existing system.
IDA pension for retired before 1-1-2017 will be referred to DOT and pursued.
· BSNL letter dt 28-12-2018 to General Secretaries
Sub. Record of Proceedings of Jt committee on wage revision w.e.f 1-1-2017-Staff side for deletion of para mentioning affordability criteria, and the para speaking fitment as per the outcome of Executive wage revision
Your suggestion to delete the portion of the proceedings will not be in conformity with the DPE guidelines and hence cannot be agreed to. However the other suggestions will be open for discussions. In 2nd PRC Presidential directive for Executive issued on 27-2-2009 and NE revision was finalised and order issued on 7-5-2010 after more than a year. Therefore you are advised to reconsider the matter w.r.t above cited DPE guidelines and convey your consent for early settlement. ( sd DYGM A K sinha)
· 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 admin dept about the arrived wage settlement for wage settlement for ensuring conformity with approved parameters. This was intimated to BSNL vide our letter dt 27-4-18, It is now for the BSNL management to implement wage revision for their non executive employees.
· BSNL Appeal dated 15-2-2019
( Earlier appeals dt 5-2-19, 12-2-19 and 14-2-19 to withdraw agitation call given by AUAB)
Strike proposed activities may lead to a situation when even the pay revision by 5 % fitment will also become out of reach.
Management has clarified to the representative of the employees that in view of the present financial position on one hand and to give immediate relief to the employees of BSNL on the other hand, DOT is considering DA neutralization on the basis of 3rd PRC scales. This is in view would mitigate the stagnation of many employees. DOT will try for further 5 % fitment thereafter. BSNL will not seek budgetary support to effect the Pay Revision ( sd AGM Sr Shyyam Arora)
· DPE OM 16-8-2019
Sub : Proposed intervention for revival of BSNL and MTNL by reducing employee cost, allotment of 4 G, debt restg thro SPV, monetisation of assets and merger of BSNL and MTNL- reg
iii If possible, the option of giving 3rd PRC sclaes to the employees before implementing VRS may also be examined by DOT. . This issues with the approval of Minister HI and PE - sd by K Mishra Director DPE (The Minister at that time was Shri Arvind Sawant of Shiv sena and leader of MTNL union)
· LS Reply dated March 18th 2021
BSNL does not fulfill the criteria under affordability clauses as per Department of Public Enterprises (DPE) guidelines dated 03.08.2017 on pay revision in Central Public Sector Enterprises (CPSEs) w.e.f. 01.01.2017. Therefore, the pay revision in BSNL has not been considered due to its poor financial condition and continuous losses. BSNL continues to incur loss despite many employees opting for Voluntary Retirement Scheme (VRS).
(d) & (e) Pension revision in case of BSNL IDA pensioners is intrinsically linked with pay revision of serving employees to avoid anomaly of pension amount between present and future retirees of the same status and grade. Accordingly, case of pension revision of employees permanently absorbed in BSNL will have to await implementation of 3rd Pay Revision Commission (PRC) in BSNL
· BSNL letter dated 29-10-21
(addressed to AUAB convener and Chairman)
2. It was informed that wage revision committee was being reconstituted and a meeting will be held after Diwali. The Unions and associations submitted that they were agreeable to wage revision with zero % fitment to address stagnation.
Excerpts from Pattabi’s Write-ups on the issue IDA Neutralization
· From the Article placed in the AITUC Trade Union Record Jan 2018
Inflation and its compensatory Graph
The IDA crossed 100 % on 1-1-2015 after 8 years. In the 1997-2007 case it was 50 % after 8 years in 2005. Even after crossing 100% there was no talk or demand of IDA merger by any central unions or PSU unions as they all expected wage revision shortly. This time the inflation was double within 8 years period comparing 1997-2007 period. After 120 months- 10years period the 3rd PRC merged IDA at 119.5 %.
· Pattabi’s article on The Issue of Neutralization of IDA Dec 16, 2019
When CPC is implemented, no Govt employee is allowed to continue in the old scale. CPC means only current CPC scales. Like that after every PRC, if the scales becoming uniform concurring with the Current scales then confusion would be less regarding IDA of different years like 1997, 2007, 2017.It is like conversion of old scales to new scales with new IDA.
A written statement (thro appeal) was given by BSNL informing the consideration of DOT :"BSNL F.No. BSNL/7-3/SR/2018/1 dt 15-2-2019 Appeal In para 6
DOT is considering DA Neutralisation on the basis of 3rd PRC scales. This is in view of the fact that some of the groups brought to the information of Management that this would mitigate the stagnation of many employees. DOT will try for further 5 % fitment thereafter. However BSNL will not seek budgetary support to effect the Pay revision
The IDA pensioners may not get any enhancement due to IDA neutralisation but it is not harmful one to them. But it would be helpful to enhance the minimum pension to Rs 9000 for the past pensioners also as after full neutralisation employees have to be placed in 3rd PRC scales.
It is useful on some aspects.
1. It will help them to come out of stagnation ( As most of them gone VRS, exact beneficiaries may be less but before VRS it was 30000)
2. IDA neutralised will be helpful to get more quantum of increment- for every 100 rupees instead of 3 rupees they get 6.6 rupees- the amount is doubled because of IDA neutralization
3. The fitment benefit for promotions would also increase accordingly
4. HRA quantum will also be improved. The gain may be Rs 22 for every Rs 100 if agreed upon
5. For any new Pensioner their minimum pension can't be less than RS 9000 . Today even people in NE6 will not get it as their end scale is 17430 only. This section would get enhanced pension. Those pensioners below NE6 may be many in thousands.
· Pattabi's letter and appeal to Shri Arvind Sawant dated June 11, 2019
Respected and Hon' Sir,
Congratulation and best wishes on your assuming the responsibility of Minister for HI&PE . I have enclosed herewith a very long essay. If find time- kindly go thro -or ask the relevant authorities to go thro and do the needful.
I have given herewith the crux of the matter for your favourable consideration, which would help lakhs of PSU employees to get some relief. Kindly do the needful.
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.
Appeal to All Central unions and DPE
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. The problem of financial sustainability by making the new 2017 scales applicable to all PSus would be less comparing fitment issue, as all are paying IDA rates specified with old scales. It is like conversion of old scales to new scales with new IDA.
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.
As we (central unions- Industrial Unions) all failed to remove the affordability clause the one existing since 2007 and intensified in 2017 , Let us be sensible atleast in demanding the following for the 70 or more loss making PSUs in different scales
“Allow all PSUs to adopt the pay scales of 3rd PRC with full IDA neutralisation. The fitment may be as per the affordability clause. The actual benefit on fulfilling the demand may be negotiable industry wise”