SBI Union Explains Dirty Game Plan Of IBA For Xth Bipartite Settlement

ALL INDIA STATE BANK OFFICERS’ FEDERATION 

(Registered under the Trade Unions Act 1926, Registration No: 727/MDS)

State Bank Buildings, St. Mark’s Road, Bangalore – 560 001

CIRCULAR NO:52 6th July, 2013

TO ALL AFFILIATES/MEMBERS:

CHALLENGES IN THE FORTHCOMING SALARY REVISION
COST TO THE COMPANY

ATTACK ON THE BARGAINING RIGHTS OF THE UNIONS

The members were appraised of the details of the last two meetings in order to enable them to understand the trends of the negotiations and adopt appropriate strategies to defend the existing bargaining rights for a fair and equitable compensation system in the Banking Industry. The General Secretary in his report spelt out the various aspects of the concept of Cost to the Company which has been flagged for the discussions as an issue on behalf of the Management. 

In fact, this is the first management issue brought forward for discussions. The cost to the company is a new compensation system devised in several sectors of the economy including those sectors which are considered as very competitive and well paying sectors such as IT and BT sectors. The concept has been developed in the recent past and is extensively utilized by the new generation of corporates that are operating in the country. The essence of cost to the company revolves around an employee: His worth is valued on a day to-day basis and his emoluments would be adjusted in such a way that the Management don’t have to take the social responsibility of ensuring an equitable distribution of the surplus that has been created in the institution and also not to have any baggage of looking after the welfare of the employee both on the day to day basis as well as in future.

2. The Unions/Associations have no role to decide the compensation system that is arrived on the basis of the Cost to the Company. At the most, it may be negotiations between an individual and the Managements who wish to enroll him as their employee. He would convey his expectations and worthwhile joining the bank and the Management would come out with their own offer and both of them would finalize the package. The package is normally expressed in terms of annual outgo of the Management.

For the purpose of the classification of the various heads of expenditure that is included in the package, the total amount would be segregated into two parts, one is the fixed pay and the other one is variable pay. The percentage of these heads of outgo may vary from time to time based on the productivity of the employee and the overall performance of the company. There is no place for the collective bargain in this compensation system.

 An attempt was being made by the IBA to explain the applicability of the concept during our negotiations by classifying the various components of our present salary structure into fixed pay and variable pay and thereafter arrive at a total package and to explain to the members the implication of the Cost to the Company. It would be worth remembering here that some of the unions who were lured by some of the Banks at the time of merger were thereafter issued with the notices of reduction of wages due to non-performance and finally a letter of termination of service. The Banks which were taken over by the new Generation Private Sector Banks suffered these setbacks and lost their permanent jobs. Let us examine some of the grave implications of the method of Cost to the Company cost.

Bilateralism:

3. Bilateralism will see the end of its existence, since the essence of the Cost to the Company is survival of the fittest and not of welfare of the group as a whole. The individuals will have to prove their mettle through their performance and ensure a better combination of fixed and variable pay. The socialistic pattern of approach that we have developed over the last 50 years of sustained struggle and sacrifice by our former veterans and leaders who gave their sweat and blood in building this great movement will slowly be demolished. 

After prolonged strikes and agitations, job security and social justice was established. The cost to the company is the challenge to the concept of Job security that is prevailing in the banking industry. We have witnessed how the jobs were destroyed in many of the institutions where forced mergers and acquisitions have taken place inside as well outside the industry. There is confusion amongst some of our colleagues that it is only an arithmetical calculation. No, it is total illusion that one will be better off in terms of planning his investment options with the lump sum money made available to him. Some perquisites that are now available on the basis of professional performance may come under the tax regime. This is not so simple. 

The present system of protection available for the minimum structured salary and perquisites will lose its significance. The IBA is slowly trying to push the workforce into a big trap thereby destroying the very essence of the collective bargaining by the trade unions. There is a need to answer some of these basic questions which led to and were the basis for the formation of our strong trade union movement in the banking industry. 

Whether we are moving towards surrendering our hard earned trade union rights?

 Should we allow the Management to unilaterally decide the compensation system on the basis of unilateral assessment of each individual? 

What should be the contribution to the posterity who are looking forward for a better future in the employment from the so called strong organized trade unions present in the Banking Industry. 

Inflation Cover:

4. At present we are having the best solution of providing relief to our rank and file against the inflation. The inflation cover is available on a quarterly basis and it was due to sustained struggles in almost all the bipartite negotiations and it took us almost 8 bipartite settlements to reach the common criteria of fixing the compensation against inflation through cost of living index figures furnished by the Government from time to time. 

In the system of Cost to the Company this exercise is on an annual basis and perhaps the IBA may try to convince us by saying the inflation would also be factored in the package worked out on an annual basis. This is only a façade of giving an impression that the old system prevails, but as far as the Cost to the Company concept is concerned it is all inclusive package and there is no scope for such adjustments that we have at present. 

Several members of the IBA seem to be attempting to convince the negotiator that these would be taken care off. This would be temporary phenomena and later on the best that the industry level settlement that has given to us in the form of Dearness Allowances will vanish in due course and the posterity will never forgive the current leadership of our movement.

Career Progression and Defined Rolls:

5. The Public Sector undertakings have developed one of the best career paths for the workforce and the structure was devised through regular rationalization of the scales and grades that were prevailing in various banks. The seniority and service was fully protected while fixing them to the various categories of designations and the roles and responsibilities were also clearly demarked amongst themselves. There was no cause for any concern as for as the career progression in the bank is concerned. 

The concept of cost to the company is that it is individual related compensation system and not related to the particular scale/grade in an institution. It could be better understood by giving one or two examples. A junior entrant in the organization may be fixed a far higher package than the senior person who is already working in the institution. Similarly, in the same category of designation, there may be so much of variations that a junior person may be drawing excess compensation system when compared his own boss in the institution. 

There is no transparency as regards the fixation of the individual compensation in fact one of the essential qualities of the cost to the company is the compensation of individuals are maintained in such a high secrecy in order to avoid discontentment amongst the employees in an institution.

6. The existing system of healthy career progression gets totally detailed. The performance of an individual may take him to the top positions at the earliest while the others are slogging and rotting in their own positions as seen happening every now and then in the private sector. Apart from the above, the employees tend to lose loyalty to the organization leading to high attrition rates. 

The Concept of Variable Pay:

7. The concept of variable which forms an integral and important portion of CTC is a tool used by Managements either to favour or to discriminate amongst employees. Variable pay is invariably performance linked. How can performance be evaluated, even within the Bank when assignments, positions are diverse in nature and not uniform. For e.g., to differentiate between budgetary and budgetary assignments, operational and non operational assignments, marketing and non marketing assignments etc., will be very difficult leading to few employees/officers getting better variable pay/incentive thereby leading to discrimination, exploitation, boss management and favouralism.
8. Apart from this, monetizing all the perks within a Bank or arriving at an average for the entire industry is a complicated affair as different Banks have different perks and other facilities. Over a period of time all the hard earned perks and its enhancement at periodical intervals lose its significance and slowly fade away into oblivion. Apart from the above certain notional intangible benefits which are welfare related, health related also get limited and shrink and then are taken away. 
Game Plan of IBA:

9. The Cost to the Company is the first issue flagged for discussions as Management subject in the current negotiations. The IBA is acting smart. If this issue is resolved the IBA is clear that there is no question of battling for settling the remaining issues as those two issues are inter linked and the offshoot of the first issue.

10. Comrades, the leadership of the Federation therefore feels that the concept of the Cost to the Company has to be rejected outright and to defend the hard earned rights of the workforce in the Banking Industry. The All India State Bank Officers’ Federation has a long history of struggles and sacrifices. It has overcome several challenges that were posed to the movement over the last 50 years. We are now on the threshold of celebrating the Golden Jubilee of our Movement very shortly. We have seen how the imperial regime attempted to blunt the trade union spirit of our seniors and what contributions and sacrifices that they have made to build a strong edifice to this great movement. We cherish their contribution and efforts of consolidation over the last several years. The history created by our Federation through the first historical indefinite strike in the year 1969 which heralded the emergence of strong supervisory cadre unions not only in State Bank of India but in the entire Banking Industry as well during this course. We cannot surrender these hard earned bilateral rights at any cost. Hence, we cannot accept the Cost to the Company concept of the Indian Banks’ Association and are prepared to fight to prevent its entry into the banking industry.

11. We will keep our members appraised of further developments in due course. In the meanwhile, all our members all over the country are requested to be informed about the game plan of IBA and be in readiness to jump into action at short notice to defend our hard earned trade union rights.
With revolutionary greetings,