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12th BP Settlement: 

The primary demand has to be clinched first.

November 11, 2023

Bank Workers Unity

Gautham

On 27th October 2023, the fourth round of 12th bipartite discussions was held between the Negotiating Committee of IBA (Indian Banks Association) led by its Chairman Mr. M.V. Rao (MD & CEO of Central Bank of India) and the UFBU (United Forum of Bank Unions). IBA offered an increase of 15% on Pay slip cost. UFBU could not agree to this offer as the same was inadequate to reach a finality. Hence UFBU requested IBA to further improve its offer.  It is learnt that in the meantime the establishment cost of the employees and officers as on 31.03.2022 with the stage-wise details has been shared by IBA with the Unions and Associations. During the fifth round of discussions held on 9th November 2023, IBA improved its offer to 16% of the Pay slip cost.

Welcome gesture

During the 10th Bipartite Settlement and the 11th Bipartite Settlement negotiations, the initial offer of IBA ranged between 0% to 2% increase on the Pay slip cost, whereas this time it is really a welcome gesture on the part of the IBA to have made an initial offer of 15% increase on the Pay slip cost. UFBU has rightly demanded an improved offer.

First clinch the primary demand!

At this juncture, the UFBU has to clinch its “primary demand” towards the wage revision. The common charter of the four workmen unions namely AIBEA, NCBE, INBEF & NOBW has clearly raised the pertinent demand which reads as: “Existing Special Allowance and DA thereon to be added to Basic Pay before working out revised pay scales”. Similarly, BEFI has also raised the demand as: “Revision of Basic Pay w.e.f.1.112022 by merger of Special Allowance along with D.A. payable on Basic Pay and Special Allowance at the average index for the quarter July-September 2022”.  Before clinching this, the talks have gone to the next stage of offer of Pay slip cost.

From overall load to Payslip cost

The approach of all the Unions and Associations till the 9th Bipartite Settlement was to discuss the percentage increase in the overall wage cost of the employees and officers. That overall wage cost included not only the cost of revision of Basic Pay, HRA, CCA, Special Pay, Graduation Pay etc. (whatever that appears in the Pay slip) which form Pay slip cost but also the cost of superannuation benefits like PF, Gratuity, Pension etc. As the increased per cent of the overall wage cost till the 9th Bipartite settlement included cost of superannuation benefits, the net increase of salary got reduced.  Therefore, the Unions changed the approach and demanded the increase only in the Pay slip cost with a clear understanding that the resultant cost of superannuation benefits has to be borne by the Managements over and above the increase in the Pay slip cost.

Introduction of Special Allowance:

While the 10th Bipartite talks were in concluding stage, IBA became very adamant and was not ready to go beyond 2% increase in the Basic Pay in order to reduce cost of the superannuation benefits to be borne by the Managements of the Banks. As a result, a new component by name Special Allowance which attracted only D.A. (Dearness Allowance) was introduced and was fixed at 7.7% of the Basic Pay.  

This Special Allowance was not taken into account for calculating any of the superannuation benefits. This has caused negative impact in the superannuation benefits (particularly in the quantum of pension and commutation) of those retired during the period of operation of 10th Bipartite Settlement.

Basic Pay increased only by 2.5% during 11th BP Settlement:

During the 11th Bipartite Settlement, the primary demand of all the Unions and Associations was to add this 7.7% Special Allowance D.A. thereon to the Basic Pay before working out revised pay scales. But this did not happen.

Even after 44 rounds of discussions and series of agitation programmes which included strikes on several days, IBA was adamant and not ready to increase the Basic Pay beyond 2.5%.  During Covid period, the MoU was suddenly concluded in July 2020 with 2.5% increase in the Basic Pay. 

 As this was one of the contentious issues, BEFI opted out of signing the 11th Bipartite Settlement.

Due to the adamant attitude of IBA, the Special Allowance component increased from 7.7% to 16.4% which attracted only D.A. and was not taken into consideration for calculation of the superannuation benefits. Again, those who retired during this period of 11th Bipartite Settlement were put to more loss with regard to superannuation benefits.

This is a serious anomaly.  While UFBU has been pressing for pension updation in order to render justice to those retired during the earlier settlements, currently those who retired during the 10th and 11th Bipartite Settlements are denied their due share in their pension and commutation.

Rectify the anomaly with retrospective effect:

This time also, if the Payslip cost is clinched and Basic Pay is not loaded proportionately, the Special Pay is bound to increase beyond 16.4% which would not be considered for the superannuation benefits.  This will for ever injure the interest of the employees and officers and the future Trade Union movement will find it very difficult to rectify the resultant anomalous position that would arise.

Hence in this Settlement itself, the anomaly of 7.7% Special Allowance in the case of retirees during the 10th BP Settlement and 16.4% in the case of retirees during the 11th BP Settlement has to be rectified with retrospective effect.  The Basic Pay for the 12th BP Settlement has to be constructed after adding the Special Allowance of 16.4% and DA thereon as demanded unanimously by all the Unions and Associations in UFBU.

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Tagged with Bank, BWU, IBA, UFBU

November 2023

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