Tuesday, June 8, 2010

Bank employees, unions divided over wage settlement

he bank employee community is divided over discrimination between pension optees and PF optees, claim industry sources. One section is unhappy with the wage package accepted by the United Forum of Banks’ Unions
The ninth bi-partite wage settlement, which was recently concluded between the Indian Banks' Association (IBA) and the United Forum of Banks' Unions (UFBU), has not gone down well with a section of the bank employees and officers, say sources within the industry. Apparently, there is still a lot of resentment amongst the employees for a variety of reasons.

Provident fund (PF) optees have raised a hue and cry about the injustice meted out to them with regard to the second pension option to bank employees. Under the wage settlement, one more pension option was made available to 2.66 lakh bank employees and officers who had not availed pension earlier. Sources within the industry indicate that the entire burden of Rs1,800 crore for availing this second option is to be shared only by the PF optees by contributing 2.8 times of November 2007 pay against 1.6 times agreed earlier. In sharp contrast, the memorandum of understanding (MoU) signed on 27 November 2009 and on 27 April 2010, had indicated that the pension cost will be shared by all the employees. However, the final wage settlement signed by the UFBU has left the PF optees high and dry, causing a lot of resentment and anguish.

This has even forced the PF optees to come together and create a forum in the name and style of "United Forum of Provident Fund Optees, Mumbai". The forum will be holding its first convention at Rama Watumall Auditorium of KC College, Churchgate (south Mumbai) on 12 June 2010, Saturday at 2.30 PM to demand pension on the same lines as was made available to earlier optees or to honour the earlier MoU.

Chairman of the UFPFO, Mumbai, Akshar Parasnis and convener of the UFPFO, Mumbai, JS Rao, have called the meeting and appealed to all bank employees to join the forum to fight against this discrimination between pension optees and PF optees.

As such, the bank employee community appears divided between pension optees who had earlier opted for pension merely by surrendering the management's contribution of provident fund with interest and the other being the provident fund optees who did not avail the pension option during 1993-95. There appears to be infighting among different bank employees' unions on this issue as well.

The Indian National Bank Employees' Federation (INBEF) on its part is claiming that this burden on PF optees is the work of certain vested interests from within the unions. These entities apparently obtained a legal opinion on the sharing of pension cost for facilitating second pension option to PF optees. The said legal opinion submitted to IBA was brought at the final stage of signing the wage agreement. It stated that it was illegal to recover the pension cost from the arrears payable to pension optees as they had already availed the pension and this second option is only for the PF optees. The INBEF claims this was part of a carefully planned and directed move by one or two employee unions.

Moneylife contacted Vishwas Utagi, secretary of the All India Bank Employees' Federation (AIBEF), he flatly denied any such discord in the community. "There is no such confusion in the industry regarding the settlement. Everybody is satisfied with it and employees will be getting the arrears soon. Those who raised an objection earlier have also signed the agreement. So there is no question of any dissatisfaction."

Shekhar Kadam, secretary of the All India Bank Officers' Confederation (AIBOC), Maharashtra confirmed that there were some murmurs initially, but most unions have accepted the settlement. "Barring one or two unions, others have agreed completely with the wage settlement. Even some of our members had some reservations initially, but we have convinced them. We are happy with the pension option."

Among the other things that have irked the bank employees is the 'meagre' hike of 17.5% announced in the revised wage settlement. This apparently includes the 6.25% of pension cost of Rs1,800 crore on the employees. They are arguing that bank employees and officers continue to be among the lowest-paid government staffers when compared to other PSUs and employees covered under the Sixth Pay Commission.
Source : Moneylife.


C N Venugopalan said...

C N Venugopalan
Ex-Manager, Union Bank of India
Kesari Junction,
N Parvoor,
Kerala – 683 513
Phone. 0484 2447994 Mob: 9447747994 E-Mail: ceeyenvee@gmail.com

No.20100611 11th June, 2010

The Hon'ble Minister for Finance,
Govt. of India,
New Delhi


Fresh Pension Option to Bank Employees –
Government shall not offend the Constitution and substantive law

I invite your kind attention to letter No. PMO ID No.9 3 2010 – PMP4 164953 and 164954, both dated 2nd June, 2010 from the Prime Minister's Office, forwarding my letter Nos. 20100511 and 20100511 (a) dated 11th May, 2010 to your office for appropriate action.

The Government that evolves out of the magnificent Constitution of the nation has the responsibility of conserving and protecting its grandeur by ensuring various guarantees like right to equality of the citizens besides its own sanctity. For the very same reason, the Government has to secure the various assurances and guarantees relating to equality of the people of all manners to place itself at the pinnacle of glory. The Government itself becoming a party to creating circumstances in which a certain community feels totally aggrieved will not be able to retain its sheen. The aggrieved will tend to make a hue and cry and will ultimately be driven to Courts of Justice for redressing their grievance resulting in huge influx of petitions in Courts that are already saddled with heavy backlog of cases.

IBA and Bank Unions have concluded an agreement to extend a fresh Option for Pension to those who could not exercise it when offered in 1995 because of the presence of an adverse chapter providing for forfeiture of entire past service of an employee in case one participated in strike any time. Though fresh option was legally mandatory to be extended to them when the particular clause was scrapped from the Pension Regulations in February, 1999, Public Sector Banks fraudulently kept the amendment in camera and failed to comply with the legal requirement and deprived majority of bank men of their legitimate right. Albeit the fact that the draft Pension Regulations of 1993 and the Final Pension Regulations sanctioned by the Government categorically stated that "an option once exercised shall be final and irrevocable", banks revoked the options of some employees (including me) exercised in response to the draft Regulations. This was done at the behest of IBA which is a mere voluntary organization of banks and had no powers to overstep the authority of the Government. IBA and Bank Unions, through their whimsical actions, evolved several queer banking equations, proving themselves as totally incompetent to address wage related issues of bank men. If the government goes by the recommendations of IBA – to be better called Indian Blunder Arcade- its very image will be get tarnished soon. It has become imperative that the Government set up a separate Pay commission for the Bank employees for determining the compensation for labour in the industry as in the case of Government servants.

C N Venugopalan said...

Now that the Government is examining the modalities of extending fresh Option for Pension, it is inevitable that the absurdities are eliminated and full justice is rendered to the people who have been stranded in life for want of income after serving the banks for making what they are now. I felt is desirable that proper feed back on items of strategic importance be given to MOF as otherwise, the wrong implementation of the scheme may generate an impression among the banking community that the MOF and the Hon'ble Minister heading it are devoid of the requisite faculties of mind. With a view to preventing fresh anomalies in the process of implementation, the following items deserve special attention:-

1. Banks are alleging deficit in Pension Funds and lack of financial muscles and make an attempt to recover from the beneficiaries of Pension Scheme a substantial amount from their wages. This has no locus-standi. The simple question that pops up is "what banks and Government would have done if every one had opted for Pension when offered initially?"
2. The recovery of Provident Fund (employer's share) paid at the time of retirement together with 56 percent on it from the retired is a gross anomaly. While commissioning the Pension Scheme in 1995, all those who retired from 01 01 1986 were given its coverage on refund of the CPF paid on retirement along with 6 percent simple interest. This is having precedence and if it is done, it will bring in some amount of fair play. One who retired 10 years back paying 56 percent of the CPF ( say on Rs.2.50 to Rs.3.5 lakhs) may not be suffering much, but one who retired recently say in 2009 also paying back the same 56 percent ( say on Rs.7.00 to Rs.9.00 lakhs ) will be the worst victim of the stipulation. The former must have at least enjoyed the interest on the amount while the latter has not at all. Subjecting the latter to such an irrational payment is vitiated by gross injustice. The envisaged recovery as also its modality is equally not maintainable.
3. Pension is payable under one and the same Pension Regulations. Recovery of a levy from one segment is illegal as another set of employees are paid pension without the levy.
4. While concluding the pact on Pension, the date from which Pension is payable to the already retired is reportedly fixed as 27th November 2009, the date of signing the pact. This deprives the beneficiaries of the Pension payable to them from the date of retirement to such arbitrary date, albeit their legal eligibility to get the same. In my own case, the amount of Pension forfeited through the pact would be Rs.9.00 to Rs.10.00 lakhs for the past eight years. If the bank and the government are to snatch away the pittance payable to an employee on retirement for its functioning, it poses a big shame to the great nation. The wage pact was one to be signed much earlier and the undue delay in signing the same has also put the beneficiaries to the loss of pension for the delayed period as per the "black pact". When one set of people who have done the same work for the organization are paid pension from the date of their retirement, denying the pension payable to the others till the arbitrary date is quite unfair from legal and social angles. It is heard that the date is agreed upon at the instance of the Hon'ble Finance Minister after the parties to the pact consulted him. If so, it can cast a shadow on the reputation of the Minister who himself is a legal luminary and a versatile genius and the decision takes things to the nadir of ethics.


C N Venugopalan said...

5. As per the Pension Pact, the commutation will be allowed as on the date of the option and not on the basis of the age at the time of retirement. This runs counter to Pension Regulations as subsequent amendment of the Regulations in any manner infusing fresh conditions will be as futile as patching a hole with darkness. Commutation is, in all fairness to be reckoned on the basis of the age at the time of retirement and not from the date of option as there is no enabling provision so far in the Pension Regulations. .
6. Recovery of 2.8 times the revised pay of November, 2007 from those who are in services is also not justified in any way as their counterparts who are already in Pension Segment are not made to pay the levy. Fact remains that when pay revision took place every time, a portion of the load factor was taken from the PF Optees and Pension Optees uniformly and placed in Pension Fund of Banks. Courts have viewed Pension as deferred wages and once again taking a fresh levy, that too from CPF optees alone for placing them in Pension Scheme is irrational. A number of suits are already filed in different parts of the country already by the victims.
7. The key industry is perpetrating inequality in compensating labour since three retirement benefits viz. Pension Gratuity and CPF are paid to employees in government run Allahabad Bank while those in other stronger PSBs banks paid two benefits only. The position obtaining in State Bank of India is also similar to that in Allahabad Bank. How can one reconcile if pay and allowances in MOF is different from that obtained in another Ministry.

The various legal aspects relating to the fresh option are reportedly being examined by the MOF in consultation with the Ministry of Law and Justice now. In order that righteousness is established in the process of implementation and the possible huge influx of petitions in various High Courts are prevented, it is felt essential that the recovery of 56 percent from the retired, 2.8 times pay from the working etc. are dispensed with and commutation is permitted on the basis of age at the time of retirement while extending fresh option. It is my humble submission that the Government shall not inflict an injury to the Constitution of the Country and to substantive law placing itself on Achilles' heels while dealing with the banking community that has contributed their mite to the Financial Sector in a great way. If instructions have already been issued, they may please be revised in a befitting way.

It is also pertinent to say here that the six days working bank men are paid a pay hike of 17.5 percent alone when the five days working government employees were paid 40 percent hike which is 229 percent higher than that of bank men. The proposed variable pay in baking industry is also fraught with serious repercussions as it will result in erosion in income when those who pleased the immediate boss will be paid lavishly.
I am enclosing a copy of the letter, Former Justice of Supreme Court Mr. Krishna Iyer had addressed to the Hon'ble Prime Minister in relation to fresh Option of Pension to be extended to bank men. A copy of my letter is also marked to the Ministry of Law for their information for doing the needful. It is my earnest desire to roar the slogan "Bharat Mata Kee Jai" as done hitherto and not "Weep, Weep Mother India".

I earnestly request you to consider the various matters at length and to have me a line in reply.

Thanking You,

Yours faithfully,

C N Venugopalan


The Hon'ble Minister for Law and Justice,
Government of India, New Delhi

C N Venugopalan said...

Draft letter to be addressed to CPIO MOF- Please paste and copy and send after incorporating your address. Employees may send in the name of relatives/friends

…………………………… Place:
-------------------- Date:

The Central Public Information Officer,
Government of India,
Ministry of Finance,
Department of Economic Affairs,
North Block
New Delhi 110 001

Dear Sir,

Requisition of Information under RTI Act, 2005

We invite your kind attention to letterNo.20060611 dated 11th June, 2010 Shri C N Venugopalan of Kerala has addressed to the Hon'ble Minister of Finance pointing out the anomalies in extending fresh option for Pension in Public Sector Banks.

The following anomalies in the proposal made by IBA have been listed out and brought to the attention of the Hon'ble Minister for his consideration:-

1. Recovery of CPF and another 56 percent on it as a contribution for pension coverage to retired
2. Recovery of 2.8 times November, 2007 pay in the case of the working people
3. Forfeiture of Pension from the date of retirement to the arbitrary date of 27 November, 2009 in the case of the retired.
4. Releasing commutation benefit without reckoning the age at the time of retirement.

Pension is an already sanctioned benefit to the bank employees which had been taken away illegally through the wrong implementation of the scheme and is not at all a new benefit. Whereas the Pension Scheme has been one and the same and Government and Public Sector Banks irrationally burdening one segment of employees alone totally lacks propriety. Such an action will constitute an offence upon the magnificent Constitution of the great democratic nation and on substantive law. Government approval for the illegal recovery recommended by IBA will go to prove that the oath of office the Hon'ble Minister has taken while swearing in "to treat people of all manners alike" gets breached.

I request that the action the government has taken to do away with the anomalies and to render justice to the bank men may please be intimated. The action report on the letter either separately or in the form of the notings on the letter under reference may be made available to me. In case the anomalies are eliminated in tandem with the provisions of the constitution and of substantive law, furnishing of the information sought will stand waived.

The prescribed fees for supplying the information is sent herewith

Thanking You,

Yours faithfully,


Encl: Postal Order/Demand Draft No.___________ dated _________ for Rs.10/- payable at N Delhi in favour of CPIO, MOF

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