Nirmala Sithraman,Union finance minister
The unions had asked the DFS and GIPSA to clear the pending Wage Revision at par with Life Insurance Corporation (LIC) without any condition or linking it with future “Performance Linked Wage Revision’’ before Diwali and then to come out with the new proposal for wage revision with effect from 2022-23
The government wants the unions of the PSU general insurance(GI)industry to accept “Performance Linked Future Wage Revision’’ before it approves the pending wage revision along with arrear, since Aug 2017, for the industry.
In a meeting on Friday, among the officials of department of financial services(DFS), GIPSA, the coordinating agency of four PSU general insurers and GIC Re, and recognised unions, Sourabh Mishra, joint secretary, DFS, categorically mentioned that finance minister Nirmala Sithraman wants an assurance from the unions for implementation of “Performance Linked Future Wage Revision’ before approving the pending wage revision for the industry.
The DFS officials informed the unions that wage revision could be released within five days if union gives assurance that they would allow smooth implementation of “Performance Linked Future Wage Revision’ in the industry.
Asia Insurance Post had reported on Thursday that the GIPSA had called for an urgent meeting of unions at the conference room of department of financial services after Sitharaman wanted the unions to agree for a “Performance Linked Future Wage Revision’ before she approves the final wage revision proposals of the industry.
However, the unions responded by reminding the earlier assurance of Mishra and the GIPSA towards sharing the consultant report prepared by Ernst Young(E&Y), which has been hired by GIPSA to turn the PSU GI industry into agile as well as profitable and has recommended `Performance Linked Future Wage Revision’, to enable them to study the consultant’s proposals before its implementation.
The unions have further clarified that they were not against KPI(key performance indicator) being the sole criteria for assessing the performance and pay structure of PSU GI employees in future but these concepts need detailed and serious discussion.
Moreover, the unions had asked the DFS and GIPSA to clear the pending wage revision at par with Life Insurance Corporation (LIC) without any condition or linking it with “Performance Linked future Wage Revision’’ before Diwali and then to come out with a new proposal for wage revision with effect from 2022-23.
The unions had also raised its demand for merger of three companies- National Insurance Company(NIC), United India Insurance(UII) and Oriental Insurance Company(OIC) as per Budget Proposals 2018.
Mishra had asked the unions to share their views on “Future Wage Revision on Performance Linked’ with the GIPSA for the government’s due consideration.
Observers point out that the condition of `Performance Linked future Wage Revision’’ may not be accepted by the unions easily and will further delay the conclusion of ongoing wage negotiation for the industry.
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.
In `Performance Linked Wage revision’ the performance assessment of each employee will be linked to the performance of the organisation along with 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 PSU GI for a wage revision on par with LIC and was expected to notify 12 per cent hike for the industry soon though unions had not agreed with the proposals.
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 New India Assurance (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.