“The ministry of finance wants the unions to agree for the performance based wage revision in future before effecting the new revision of 12 per cent hike with five years of arrears for the workforce of the general insurance industry,” said sources in the ministry
Creating further anxieties among the 44,000 workforce of PSU general insurance industry, who are eagerly awaiting their new higher salaries along with five years of arrears during the festive seasons, the conclusion of the ongoing wage negotiation has hit another roadblock as finance minister Nirmala Sitharaman has not given her nod to the proposals yet and has sought further `clarifications’ on how performance based(key performance indicator) wage revision can be implemented for the industry in the future.
GIPSA, the coordinating body for the four PSU general insurance companies and GIC Re, has called for an urgent meeting of all recognised unions tomorrow at the conference room of department of financial services(DFS) in New Delhi to discuss the contentious issue that may trigger a fresh round of confrontation between unions and the government.
“The ministry of finance wants the unions to agree for the performance based wage revision in the future before effecting the new revision of 12 per cent hike with five years of arrears for the workforce of the PSU general insurance industry,” said sources in the ministry.
The ministry had earlier informed the unions that the next wage revision will be based on the performance of each of PSU general insurers and each individual within the company.
Wage revision of each employee will be linked with the performance of the organisation and his/her own performance, GIPSA had said earlier in a letter to the unions of the industry.
According to the new plans, primary component of the wage revision will be variable (performance based). However, a small fixed component of the pay shall be towards the cost of living adjustment during each appraisal and wage revision cycle, GIPSA had said.
Measurement of performance will be made absolutely objective, based on key performance indicators identified for each employee as well as the performance milestones set for each organization. APAR(annual performance and appraisal report) and promotion policies will be modified accordingly to recognize and reward good performance, said GIPSA.
However, the unions had their reservations on the new proposals of the MoF and yet to give their consent to it.
It is now almost over a month when the ministry of finance(MoF) had finally rejected the demands of unions, belonging to the public sector general insurance industry, for a wage revision on par with Life Insurance Corporation(LIC) and was expected to notify 12 per cent hike for the industry soon though unions had not agreed with the proposals.
However, it has not been an easy affair for the ministry to notify the hike unilaterally as three of the financially weak companies, Oriental Insurance Company(OIC), United India Insurance(UII) and National Insurance Company(NIC) may not have sufficient funds to meet the huge outgo due to the new salary structures for the employees, said MoF sources.
Though, New India Assurance(NIA) and GIC Re have sufficient funds to take care of the higher expenses on account of higher salaries, the government wouldn’t allow a situation where only two companies will be paying and others wouldn’t, explained the sources.
Sources in the industry also pointed that it was expected that the government will infuse further funds into the three general insurers before notifying new salary hikes.
`There will some indications tomorrow how the government will be handling these sensitive issues as the wage revison for the PSU general insurers are already delayed.
With the 12 per cent hike along with five years of arrears, wage bill for NIC will be around Rs 2177 crore, Rs 2080 crore for NIA, Rs 2135 crore for OIC and Rs 1752 crore for UII.
There will be a total outgo of Rs 8146 crore from all four companies for meeting wage revision expenses, said analysts.
The government last year had approved a 16 per cent wage revision with arrears for the employees of IPO bound LIC and had even finalised a hike of 15 per cent with arrears for the PSU banking industry in 2020.