The Hindu Business Line : A `strike' for organised labour

No doubt the public would heave a sigh of relief that the employees of the State Bank of India (SBI) have called off their strike, with their pension demand largely conceded. The management now has to confront the challenge of balancing the additional labour cost of operations with the need to keep the price of its services at a level that would keep it competitive and thus stay relevant in an industry that it has lorded over all these years. But it has some catching up to do. On such key parameters as `business per employee' or `profits per employee' it lags considerably behind some of the other players in the nationalised sector not to speak of private and foreign banks.

That the Government quickly intervened and successfully resolved the issue should occasion no surprise. With the election process under way in five States, it perhaps could not really afford to antagonise a chunk of the voting public whose life was in some ways disrupted by the strike. If the Government was convinced that the SBI staff demand for a hike in pension entitlement was legitimate, then it should not have allowed the management to dither on on a decision all these years until its hands were forced by the staff. If, on the other hand, it felt that the economy cannot afford a widening wage differential between the staff of the SBI and those employed in the public and select private sector banks, it should have stood firm even while trying to alleviate the sufferings of the general public through means at its disposal. By presenting itself as the principal negotiator in the SBI dispute, the Government is certain to be confronted with similar demands from the entire banking and insurance industry.

From a strategic perspective, too, the decision has considerable significance. The modest quantum of pension benefit enjoyed by the SBI staff hitherto was seen as an aberration and a legacy of its imperial past. But by substantially enlarging the quantum of payment, the Government has conferred legitimacy to the notion that three retirement benefits— provident fund, gratuity and pension— all in full measure are essential elements of an enlightened approach to labour management. It is only a matter of time before this notion enters the collective psyche of the organised workforce. Whether a latter day government would be able to resist the pressure by the organised labour for statutory enforcement of an enlarged scope of welfare and its consequences to the cost of goods and services in the economy are questions that need to be examined. A national debate on the contours of a wage policy for the workforce in the organised sector incorporating an inflation-adjusted component of old-age social security brooks no further delay.

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