Why Not 25 % Wage Hike

IBA’ PERVERSE LOGIC ON SO CALLED ‘CAPACITY TO PAY’ IS  PREPOSTEROUS

 

The stand of IBA is preposterous . Even with 25% increase we will  be lagging behind the government employees if one realistically evaluates their projection in wake of announcement of 7 pay commission in the anvil.

 

My arguments is backed By Justice Kantilal Desai  in his award popularly known as Desai Award  where in para 5.137 he has made pellucid the following   putting to rest the then arguments of private bankers that they cannot afford to pay  the terms of the tribunals .Para   5.176 ahs scientifically  laid down the  sound fundamentals to fix wages wherein they have specified that ‘One of the important factors to be taken into account in fixing

wage scale is the prevailing rates of wages in the same or similar occupations in the same or neighboring localities” which  is appended herewith  . Hence our demand of 25% hike to restore parity with government employees and other PSU‘s is just and right, and is accordance with awards in force for bank employees. Abrogating the legal sanctity of these awards of learned  judges  by peddling spurious logic tantamount to disrespecting the laws of the land .

 

Para 5.137(page 135)

CAPACITY OF THE INDUSTRY TO DAY

 

    ‘ Whilst considering the question of wages in the banking industry, it will be necessary to consider the question of the capacity of the industry to pay wages above the bare minimum wage and place of the industry in he economy of the country. The question concerning the capacity of an industry to pay wages has been dealth with at some length of the Supreme Court in the case of Express News paper (Pvt) Ltd and another V. The Union of India and others, reported in (1959) Supreme Court Reports, page12, at pages 89 to 93. As the Supreme Court has observed in that case, the capacity of industry particular unit (marginal, representative or average) to pay (ii) the capacity of a particular industry as a whole to pay, or (iii) the capacity of all industries in the country to pay, After considering the various aspects of the matter, the Supreme Court has at pages 92 and 93 of the aforesaid report observed as follow:

 

     The principles which emerge from the above discussion are:

 

(i)                That in the fixation of rates of wages which include within its compass the fixation of scales of wages which include within its industry to pay is one of the essential circumstances to be taken into consideration except in case of bars subsistence or minimum wage where the employer is bound to pay the same irrespective of such capacity.

(ii)             That the capacity of the industry to pay is to be considered on an industry cum region basis after taking a fair cross section of the industry and

(iii)           That the proper measure for gauging the capacity of the industry to pay should take into account the elasticity of demand for the product, the possibility of tightening up the organisation so that the industry could pay higher wages without difficulty and the possibility of increase in production considered in conjunction with the elasticity of demand for the product no doubt against the ultimate background that the burden of the increased rate should not be such as to drive the employer out of business.

 

     The Supreme Court has observed in an earlier paragraph that in a given case, it may be even permissible to divide the industry into appropriate classes and then deal with the capacity of the industry to pay class wise. The industry of banking in cases where the banks have branches in more states then one, has been dealt with class wise, and the capacity of the industry which, so far as the banks before me are concerned has to be determined class wise. Having regard to the principles enunciated by the Supreme Court, the capacity of the industry considered class wise will have to be determined after taking a fair cross section of each class. As observed by the Sastry Tribunal, the wage structure should be such as to be within the capacity of the industry to bear in the light not apply of its present position but of its future possibilities also”

 

SASTRY TRIBUNAL ON PREVAILING RATES OF WAGES IN COMPARABLE CONCERNS

 (xvi) Prevailing Rates of Wages in Comparable Concerns

5.176. One of the important factors to be taken into account in fixing

wage scale is the prevailing rates of wages in the same or similar occupations in the same or neighbouring localities.

5.177. The Sastry Tribunal in considering the prevailing rates of wages

has observed that helpful comparisons could be made between wages in

major banks and those in small banks, between banks on the one hand and certain industries on the other, between the bank awards and the awards in insurance companies, oil companies and textile companies and that the rates of pay in certain departments of Government such as the Posts and Telegraphs and in State Governments would also furnish material for the construction of a pay scale for the bank workmen. It also referred to the report of the First Pay Commission and stated that there were several affinities between bank workmen and Government clerks, bank subordinates and Government menials. The Sastry Tribunal has set out the scale of pay for clerks in the service of the various State Governments and also in the serviceof the Central Government. In paragraph 260 of its award it has observed as follows :

“Or again we may take a cross section of the wage map of India for clerical staff and compare the prevailing rates in a mixed bag       consisting of industrial concerns, municipalities, insurance companies, government departments, Port Trust and Reserve Bank of India.

 

The Sastry Tribunal has then set out the emoluments received at the initial start by members of the clerical staff of various concerns in this mixed bag. It has also given a summary of the emoluments given to clerks under   the more important award relating to various concerns.

 

5.178. The Labour Appellate Tribunal after referring to the fact that the

Sastry Tribunal had set out in its award the total emoluments of a mixed batch of industries and Government and quasi-Government institutions stated that it had collected other material also. The Labour Appellate Tribunal has thereafter set out the total emoluments payable to a clerk at the initial start in 28 different concerns. After considering the emoluments payable in concerns,

 

 The Labour Appellate Tribunal in paragraph 102 of its decision

observed as follows :—

“In our view the clerk in an ‘A’ class bank in class I area should

receive as his starting total emolument something midway between

Rs. 130 (which the Central Government gives to its clerk) and the

wages of the higher commercial firms (excluding the oil companies

to avoid possible contentions).”

In the course of its decision it has further stated as follows :—

“It is true that quite a number of the concerns whose total

emoluments we have given are industries but as we have said before

a clerk is no less a clerk whether he is in an industrial concern or

in a bank; his duties are in the main clerical even though the nature

of such clerical duties may vary from concern to concern. There

are however in the list a number of concerns which are in the main

commercial although some of them may have allied industrial units.

Bearing in mind the principal considerations already enunciated

and taking a conservative view, we are satisfied that the minimum

total emoluments of a clerk in an ‘A’ class bank in class I area

should be raised to something between Rs. 140 and Rs. 145 and

suitable variations will have to be made for other classes of bank

employees in the different areas.”

 

Corollary:

 

 

Even with 25% hike we well just be    inching towards some semblance of parity with pay  of government employees if we evaluate the projected salry in anviel in the wake of 7the pay commission.

 

The capacity to pay is never the standard of any capitalist when he starts an industry. They study the market some where they find the rate of profit to be 20, somewhere 30 and some where 50. They try to cash on it and come with their accumulated capital, reserves or some things – Rs. 5 crores or Rs. 10 crore and put it in to much machinery, so much raw material and go on hunting for the worker see at what will they can buy the labour power. Then they calculate that if the labour power is purchased Rs.10 a day their rate of profit will go down from Rs.50 to 30. So they reduce the rate. So the capacity to pay is really the capacity to earn the highest rate of profit. And we (The trade Union) change the wage rate up by bargaining, by organising ourselves and by strikes. So capacity to strike determine the capacity to pay on the part of the employer. The capacity to pay is not an abstract, unbreakable inviolable principles. It is a determinable thing determined by the rate of profit and capacity of the worker to bargain and strike for it. As the trade union maintain, it is not the industry’s alleged capacity to pay that is material to urge fixation put the workers capacity to work without which there can be no production.

 

So long as there is a high volume of NPAs in banks, there cannot be defined , expected profits .NPA is not our creation.   So we cannot accept this shallow and unfounded logic of capacity of the banks to pay. If that be the case wage hike for government employees  canot be granted  unless The central government brings down the current account deficit to 'Zero' ,the fiscal deficit to 'Zero' (CAD was at Rs.216,000 crores for 2013-14 as per the news item in NDTV Profit on 21-05-2014. Fiscal deficit was at Rs.519,529 Crores for 2013-14 as per the news item published in various newspapers

 

If the central government recovers a fraction of    NPA which around six lakh  crores through stringent legislations and measures   and further  recovers the huge tax arrears due from big industrial houses, large corporate groups, MNCs and high net worth individuals (HNIs), in Income Tax, Service Tax, Customs Duty, Excise Duty, Property Tax etc. in full (Income Tax arrears alone stood at Rs.580,000 crores as at the end of March, 2014), bank and government employees can be easily granted just  share of value added  in the forms of just wage revisions.

 

In view of the aforesaid principles laid by Indian jurisprudence , for bank employees our demand of 25 % hike in pay slip components is fair , just meets ends of justice and should be seized form unyielding hands no holds barred.  

 

S.SRINIVASAN

PRESIDENT

NATIONAL UNION OF BANK  EMPLOYEES’ ( NUBE)