Salary negotiations in banking sector: Nine bank unions representing nearly 14 lakh employees are set to make a strong push for an early agreement on the issue of wage revision in the crucial meeting with the management ahead of Diwali. A revision in the salary and wages of bank employees has been due since November 2017, however, it could not be agreed upon despite 30 meetings over the issue since July 2017. The October 17 meeting in Mumbai is crucial as it comes on the heels of Modi government’s big decision to merge 6 PSU banks with 4 larger ones, which was vehemently opposed by the bank unions. According to the industry sources, though a 12% average hike in salary was in principle agreed upon in the last month’s meeting, however, finer details are yet to be worked out.
“In the last meeting held on September 17, 2019 an offer of 12% increase in pay slip component was made by the negotiating committee besides other things,” said the Indian Banks’ Association in a letter to the bank managements as it recommended payment of one month’s salary (basic plus DA) to bank staff as an ad hoc payment ahead of festival season.
Why a pay revision in banking sector is stuck
Unlike the central government and state government employees that are covered under the pay commission, salary and wage revision in the banking sector takes place through a wage revision settlement between the workers and management. However, unlike the pay commission that is constituted every 10 years, the wage revision agreement in the banking industry is valid for five years only.
The last pay revision in the banking sector took place in November 2012, though it was implemented in 2015 but the effective date of implementation was November 2012 and the five year period ended in November 2017. This will be t11th wage revision settlement between bank employees and management but it is pending for the last 2 years.
The issue of merger of DA with basic
This wage revision is crucial as a part of the dearness allowance that is paid to bank staff is expected to be merged in the basic salary in this round of settlement.
“Merger of DA with the basic salary is due and it has been almost decided that 47.80% of the DA applicable in November 2016 will be merged with the basic salary of bank staff,” Ashwani Rana, General Secretary of Delhi Pradesh Bank Workers Organisation, told Financial Express Online.
The remaining component of dearness allowance (DA) to be paid to bank staff will be decided afresh by taking reference to the DA applicable in November 2016.