Thursday, May 4, 2017

Banks may push for variable pay for employees in wage negotiations

 Mumbai, May 3:  Banks Unions and the Indian Banks' Association (IBA) are likely to introduce variable pay as it initiates the negotiations for the next wage settlement in the banking industry.

Talks between IBA and the bank unions under the banner of United Forum of Bank Unions (UFBU) were held at Mumbai on May 2.

Bank unions are resisting variable pay but want a salary that is at par with the central government employees with the revision of Seventh Pay Commission.

"AIBEA would like to expedite the settlement on time. We deserve a good revision in our wages to catch up with the market as well as commensurate with the increased work load in banks of late," CH Venkatachalam, General Secretary of All India Bank Employees' Association (AIBEA) had said.

The negotiations will be around the merger of Dearness Allowance (DA) and basic pay, percentage of hike or the load factor / amount and distribution of the load to different components of salaries.

The IBA is likely to introduce variable pay as the Khandelwal committee recommendations have also pushed for it given that the bipartite agreement does not consider new challenges arising out of competition, eliminates professionalism and has no relation with the capacity of individual banks to pay.

Punjab National Bank Chairperson Usha Ananthasubramanium, during her last analysts meet, had sounded out, “Today, an employee’s salary is predictable. There is a need to recognise performance and give remuneration. We have formed an internal committee of general managers to work on this matter and submit the proposal to the board."

In the last wage negotiation between the unions and bank management, IBA had settled for a 15 percent hike.

The negotiation meeting on May 2, would be led by Rajeev Rishi, Chairman of IBA. Representatives from the Workmen Unions / Officers Associations of United Forum of Bank Unions (UFBU) will be meeting the negotiating committee of the IBA.

This would be the 11th bipartite settlement on wage revision for nearly 8-9 lakh bank employees and officers of 21 public sector banks. The wage revision is due from November 1, 2017.

Since 1996, 10 industry level bipartite settlements have been signed by IBA with the bank unions for five year tenures. This would be the 11th after the 10th settlement signed in May 2015 covering the period from November 2012 to October 2017.

The finance ministry had recently asked the heads of public sector banks finalise the modalities for timely implementation of the next pay revision.

The Banks Board Bureau Chairman Vinod Rai also recently made a case for an improved compensation package across the board of public sector banks.

"Maybe, we are not able to do much with the fixed part of compensation package but (with) variable part we are hopeful that in the next financial year (2017-18), we will be able to introduce a far more attractive package which do have bonuses, ESOPs and other performance linked incentives as part of the package," he said.

Rai has also suggested that managing directors of the public sector banks should be appointed for minimum 6 years.

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