NATIONAL UNION OF BANK EMPLOYEES

                                (Regd No.3415 / CNI dated 29-07-2011)

                 Administrative Office: 763, Anna Salai, Chennai – 600 002

Circular No.03 / 2013                                                                                       Date : 11-06-2013

Dear Comrades,

10^TH BIPARTITE DISCUSSIONS

MEETING OF IBA WITH

ELEVEN (11) NEGOTIATING UNIONS ON 07-06-2013

 IBA's Negotiating Committee headed by Shri.T.M.Bhasin met the Eleven (11) negotiating unions on 07-06-2013 at IBA office in Mumbai.  From the NUBE the undersigned participated.

IBA once again pitched on for “Cost to Company” (CTC) concept.  IBA further insisted Performance related wage, restricting the wage revision, increased mobility to award staff, and rationalization of Special Pay, etc.

Reports confirm that as employees of state-owned Banks bargain hard for a steep rise in pay, the finance ministry has asked the Indian Banks' Association (IBA) to consider moving towards Cost-to-Company (CTC) structure to reflect the actual remuneration, including all perquisites and incentives. Members are aware that the report of the committee on personnel issues of Public Sector Banks in June 2010 had suggested Banks to consider variable pay as a major component of wages and have the discretion to go for a CTC concept, a trend prevalent world over. These recommendations popularly called as Khandelwal Committee recommendations were opposed by Bank Employees and was listed as a principal demand in the strike actions observed by the Unions in the recent past.

NUBE apriori is apprehensive about CTC concept in view of the following reasons : (just illustrative but not exhaustive).

Ø  That CTC concept is a piece of financial engineering whereby the compensation appears attractive on paper but when it comes to in-hand salary, it could be as much as 30 to 40 % less than what is promised. Broadly CTC consists of following components:

(i)                Salary including Basic Pay, DA, HRA and other Allowances.

(ii)             Perquisites and Reimbursement given to employees. This includes incentives, reimbursement of conveyance, medical benefits, leave encashment etc.

(iii)           Contributions made by organizations to employee for Provident Fund, Gratuity, Medical Insurance, etc.

(iv)           Determination of CTC is a professional method adopted by a corporate and employees are appointed with a fixed CTC so that there will be no hidden or variable cost of hiring an employee.

Ø  CTC is nothing but the cost that the company incurs to employ you and keep you employed.  It includes your pay and anything else that the company may incur to keep you in employment.  It’s important because a lot of components of your CTC may not translate into actual take-home cash every month.

Ø  We fear that employees may actually be worse off as Bank managements could push variable pay through the backdoor, thereby undermining the cardinal principle of labour rights – equal pay for equal work.

Ø  At present, a raise to Bank employees is given on gross salary, which primarily includes Basic Pay, Dearness Allowance, City Compensatory Allowance and House Rent Allowance (HRA) in some cases. Besides, there are various allowances for travel, newspapers, leased house rent (if HRA is not availed) and medical expenses, among others. 

Ø  But CTC concept encompasses, every paisa the Bank spends on an employee, from concessional rates of interest on loans to the employer's share in the provident fund, might be shown as part of CTC/salary.

Ø  Taking into account there is already significant difference in the perks of small and large-size Bank employees and if the wage rise is given on the CTC, it would widen the gap in pay packages. Needless to underscore here Salaries of State Bank of India employees are, for instance, higher than other PSB peers.

Ø  For e.g. in the Software Sector where the CTC salary concept is in vogue, it is ridiculous, as a sandwich given at the Software Company to the employee is considered as costing Rs.800/- and a cup of coffee as Rs.300/-. 

Ø  As a broad thumb rule, what you get in hand will be 70% of your CTC.  So if your annual CTC is Rs.5 lakh, you can expect to get an annual take home of Rs.3.5 lakh or Rs.29,000/- per month.

Ø  CTC concept only will inflate Bank employee’s salary on papers.   On 29^th May, 2013 there was  advertisement for recruitment in Navy, they have advertised that CTC for a Sub-Lieutenant would be approximately Rs.65,000/- per month (excluding the free medical facilities, LTC, canteen facilities, entitled rations, government accommodation, loans at subsidized rates.  We would like to add here that Sub-Lieutenant is the lowest ranked in Navy and his Basic Pay is Rs15,600/- with grade pay of Rs.5,400/-.

Ø  We will explain this concept in greater details in our next circulars.

NUBE expressing reservation about introduction of CTC, variable pay, etc has suggested that the concept of CTC further transparently packaged and other issues raised by IBA have to discuss objectively in next round of discussions as it has wider ramifications.

To our demand that there should be a time bound programme to complete the negotiations without much delay to arrive at the wage revision settlement at the earliest, IBA had informed negotiating unions that the same can be worked out by mutual discussions.

To our demand that the wage revision should be effective from 1^st November 2012 and that the new pay scale should be constructed by merging the DA at 4876 points i.e. the DA applicable to July- September 2012 quarter, IBA suggested that the pay scales could be constructed by merging the DA applicable up to 2009.  In view of the fact higher merger leads to higher Basic, which in turn increases the linked benefits like HRA, CCA, PF, Pension and Gratuity etc., we have rejected this proposal.

Further the eleven negotiating unions have equivocally demanded that IBA should make their offer on the percentage of wage load acceptable to them. For this, IBA informed us that they would consult the higher authorities in the Government and inform us in the next round of discussions.

The unions further submitted that in the proposed wage revision, the hike in wage load should be exclusive of the cost on pension and other superannuation benefits and also the cost of hospitalization expenses reimbursement. IBA informed that this would be kept in mind by them.

 

IBA informed that they will shortly inform us the date for the next round of negotiations. We shall apprise you of further developments form time to time.

“Work for a cause, not for applause.

Live life to express, not to impress.

Don’t strive to make your presence noticed,

just make your absence felt”

With greetings,                                                                                                    Yours comradely,

(L.BALASUBRAMANIAN)

           GENERAL  SECRETARY

PS from AllBankingSolutions.com  : We appreciate the initiate taken by Mr Balasubramanian in explaining the concepts and giving brief of the negotiating meeting.   We continue to stand by our earlier article giving analysis of the negotiations.    We believe in complete freedom on these issues.