People's Democracy

Swadesh Dev Roye

THE Long Term Settlements (LTS) of wages, under the ongoing sixth round of wage negotiations for the central public sector workers, have been concluded in a number of major public sector undertakings (PSUs). An in-depth analytical study of these agreements and the proceedings of the negotiations would provide revealing inputs for trade union movement. Also, the role played by some central trade unions in these negotiations has clearly demonstrated as to how they compromise the interests of the workers and nakedly collaborate with the management.

Almost on all previous occasions, wage revision in PSUs used to take place first for the workers, then for the executives below the board level and finally for the board level executives. However, this time it has gone totally in the reverse gear. It has taken place first for the board level executives, then for executives below the board level, and finally for the workers.

To recommend the pay and allowances for the board level and below-board level executives, the government appointed a committee under the chairmanship of Justice S Mohan, a retired Supreme Court judge. The government accepted the committee’s recommendations with certain modifications, and a circular for implementation was issued. Then the managements of PSUs in different sectors made further improvements and implemented the revised pay and allowances for both the categories of executives.

It was thus that a hefty rise in the revised compensation package (revised pay, allowances and benefits) has been achieved by the executives at all levels. On account of pay alone, the revision benefits for the below-board level executives has, on an average, been more than 80 per cent (in some cases even 91 per cent) of the pre-revised pay. This is apart from the allowances and other facilities.

Prior to the wage revision, the percentage neutralisation for payment of dearness allowance (DA) was reckoned on a graded basis. It was 60 and 50 per cent neutralisation for the senior and top-level executives respectively. But in the revised wage agreement, there is 100 per cent neutralisation for even the chief executives of the PSUs.

Thus, there is (1) a high jump in the basic pay of the executives (the pre-revised basic pay of Rs 3,700 at the initial grade of an executive has been revised to Rs 10,750); (2) a very high rise in the annual increment (the pre-revised rise from Rs 175-400 has been revised to Rs 430-1,142); and (3) there is provision of DA payment on the percentage of basic pay. In sum, the pay of the executives is set to continually increase at a compounded rate.

A gratuitous favour has also been granted to the PSU executives by allowing merger of the dearness allowance amount against AICPI 1708 with 100 per cent neutralisation. This will take place with retrospective effect, from January 1, 1992. In other words, in computing the new basic pay, a big amount has been added on the assumption that the executive "could have earned the amount had there been 100 per cent neutralisation from 1.1.92."

However, even if there is a section of the workers who too were getting less than 100 per cent neutralisation, such merger has been refused to them.

In case of executives, there are some more noteworthy benefits on account of pay. To remove the bunching of basic pay between/amongst the juniors and seniors, one increment in the revised scale has been granted for every three increments drawn in the pre-revised scale. Moreover, the executives have been granted special pay up to a maximum of Rs 1,208 per month in the revised scale of pay. Another eye-catching benefit for the PSU executives is house rent allowance (HRA). The amount of HRA for a top level executives ranges up to Rs 10,000 per month.

Compared to the PSU executives, much less has been the wage revision benefit for the workmen in the PSUs; in some cases it is only a fringe of what has been granted to the officers. One can consider the cases of very low revision/fitment benefit granted to the workers of some of the major PSUs, on account of pay alone. It is like this --- Hindustan Aeronautics Ltd 20 per cent; Bharat Electronic Ltd 25 per cent; Port and Dock 27.5 per cent; Bharat Heavy Electricals Ltd 36.5 per cent. (These percentages are calculated on the pre-revised basic pay.) Same is the trend in other PSUs.

In the matter of minimum revised basic pay, while the executives have been given an increase of 2.9 times of the pre-revised basic pay (or even more in some cases), the workmen have been given less than 2 times. These workers have been discriminated in the matter of annual increments also. They have been deprived of benefits like additional increment for removing bunching, special pay on account of difference between the sum of increment drawn in the pre-revised scales and the amount admissible in the revised scales of pay. It needs to be emphasised that, for the workers, the trade unions had not asked for the same amount of benefit in absolute terms. What was pleaded was that the same principle/parameter be used in the matter of fitment/revision benefit, increase in rate of annual increment, bunching removal and special pay.

There is one special feature of the sixth round of wage negotiations. It is for the first time that the Department of Public Enterprises (DPE) said: "The management of PSEs (PSUs --- Ed) would be free to negotiate the wage structure for the employees not covered by the Justice Mohan committee, keeping in view and consistent with the generation of resources/profits by the concerned enterprises." This "free hand" provided leverage for the trade unions that they could have utilised for effectively bargaining in the negotiating forum of their respective public sector units.

In the previous rounds of wage negotiations, certain basic benefits, particularly pertaining to pay, used to be more or less common for all the PSU workers. Further, the parameters for wage revision/fitment benefit for both executives and workers did not have that wild disparity as was seen in the current round.

This time, out of the wage agreements so far concluded, the workers in the oil sector have achieved the best benefits. In the non-oil sector, highest benefits have been achieved in the Power Grid Corporation (Powergrid), followed by the National Thermal Power Corporation (NTPC). The power sector workers demanded parity with the oil sector workers, and other sector workers demanded parity with power sector. However, management of the power sector PSUs took the stand that oil sector and power sector could not be compared. Similarly, the management of non-oil and non-power sector PSUs took the position that there could be no comparison with the oil/power sector.

It is this disturbing aspect of wild disparity between the executives and workers, and again among the workers of different public sector industries, which is very important to note. A deeper analysis of this feature from the point of view of trade union movement is an imperative necessity. Without going deep into the matter, some argue that, depending on the financial health of the companies, disparity amongst the workers in different PSUs is unavoidable.

The proponents of such an argument miserably fail to note that this argument has been completely ignored in case of the executives. Except those of the sick PSUs, all the public sector executives have been granted by and large the same benefits in pay scales, annual increment and fitment, without bothering about the performance parameters (or, for that matter, the financial health) of the PSUs concerned.

Thus, when the CITU unions in the NTPC asked for parity in fitment benefit with the ONGC workers, the management refused on a plea that the ONGC and the NTPC could not be compared. But when the CITU representatives asked why the NTPC workers should not get the same benefits as the ONGC workers have got when the executives of the NTPC have been granted wage revision exactly like the ONGC executives, the management had no answer.

The shocking point is that, except the CITU, other trade unions sided with the management. It is this weakness on part of the trade union movement that has resulted in the said wild disparity in the wages for executives and workers, and also for the workers of different pubic sector units. This disparity could not be effectively countered precisely because of this disunity.

The net outcome of the aforesaid disparity has reflected in widening gap between the lowest paid worker and the highest paid executive. In the year 1970 the gap was in the ratio of 1:19. Remember that at that time there was no centralised collective bargaining system in the PSUs. An effective centralised collective bargaining in public sector started in our country since the early 1970s. Then the serious gap could be gradually brought down to an appreciable level; the gap was only 1:4.9 at the expiry of the fifth round of wage agreements on December 31, 1996.

However, it is a matter of serious concern that, at the commencement of the sixth round of wage agreements, the ratio took a reverse turn and has reached to about 1:7. The Justice Mohan committee attributed the so-called reducing gap in relativity to the asymmetrical formula for payment of dearness allowance and the power of collective bargaining in the public sector. Now, with the introduction of 100 per cent neutralisation upto the level of chief executives and the pro-management role of some central trade unions, the gap has already widened. Moreover, in the coming days, it is poised to further widen because the higher the salary, the higher is the amount of dearness allowance in net monetary terms.

It is in this situation that the CITU unions were compelled to abstain from signing the wage settlements in PSUs like the Coal India, BHEL and NTPC, and organise protest agitations including strikes. An encouraging, exceptional example is the settlement in the Powergrid. It was the CITU’s sheer dominating strength and bold stand in the negotiations that resulted in a pro-worker wage settlement in the Powergrid; in fact it is the best amongst the entire non-oil sector PSUs. The lesson from the Powergrid settlement is loud and clear: in the negotiations the CITU should have a strength to be reckoned with, and that this is rather a pre-condition to realise the best result in the wage negotiations.