The Hindu Business Line : A new wage deal

WHEN THE BANK wage talks started, the trade unions demanded a near-35 per cent hike in pay and perquisites to the managements' offer of around 6 per cent rise. Attritional talks over the last few months have finally got the Indian Banks' Association (IBA) and the trade unions to agree on a 13.25 per cent mark-up in wages with the total relief to cost Rs 2,200 crore annully (Rs 1,288 crore for workers and Rs 912 crore for officers). The trade unions have conceded the managements' right to transfer workers within or outside the district but within 100 km from the current posting; this arrangement is to be reviewed after two years. Some 40 years ago the Shastri Award had agreed to shifting of workmen within a language zone (read State) but this was never effectively implemented.

By the new agreement some 30 categories of allowances will give way to 12 and this should partly do away with job demarcation (bankers dub it multi-tasking). For instance, a receiving cashier at a bank branch does not double as paying cashier even when there are long queues at the counters. Bankers believe workmen can now be persuaded to earn their incomes like their counterparts in the private sector where one person often performs at least five jobs at a time, and with an engaging smile too. By 2007, at least 30 per cent of the staff in government banks will go home and, if mergers come through, a second Voluntary Retirement Scheme will be necessary to shed surplus hands. In the first VRS banks brought down the labour force from 8 lakhs to 7 lakhs. Most government banks have provided for the pay-out and the deal should not hurt, though there is talk of it being used as a ruse to push up lending rates. An IBA press note states that "the details will be worked out and an MoU will be signed shortly." One is not sure whether the deal has been linked to any official productivity index to justify the package as most industry-union talks have little rationale in them.

The agreement is effective retrospectively from November 2002 and will hold good till October 2007 and many think it could be the last of such deals in the banking sector. With bank mergers in the air and managements trying to be different, wage negotiations will in the future be linked to the profits on the books or some other scientific marker; the best-run entity will pay the best wages as happens in the private sector, where pay packets outpace those in the government banks. In many ways the understanding will trip plans of government banks to match their competitors at least till 2007 as union protests are certain when anyone falls out of line. Yet, it is no consolation for the ordinary customer as neither the IBA nor the trade unions has promised prompt and humane service at the counter.

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