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| Officers go to court over IDBI move on variable pay, new service rules |
| Namrata Acharya / Kolkata Mar 03, 2010, 00:06 IST |
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The All India IDBI Officers Association has filed a writ petition before the Bombay High Court challenging the bank’s decision to change service conditions and implement a variable pay structure. The petition, filed last month, is scheduled for hearing on Friday.
While IDBI Bank is the only public sector bank to implement a performance-linked pay structure with the government yet to approve the new compensation package, other public sector banks have dropped plans to go ahead with the proposed salary structure following opposition from the employees’ unions.
“IDBI Bank is yet to put up a performance management system for evaluating the variable component. “However, the bank has decided to bring the new pay package into effect from November 2007 and has disbursed Rs 121 crore as arrears to nearly 6,000 officers,” said a union representative.
According to a circular of the All India IDBI Officers Association, while approving the pay scales in November 2002, the government, which is the majority shareholder in the bank, had directed IDBI to revise the pay and allowances in 2007 based on negotiations with officers and also to ensure parity with other public sector banks.
Subsequently, on May 23, 2009, the bank’s board approved the new compensation package and agreed to modify service conditions, pertaining to leave, working hours and other benefits. In July, however, the government had asked the bank to keep the issue on hold. An IDBI Bank spokesperson said, “The bank has implemented the revised compensation structure for officers from January 1, 2010 and the arrears paid with retrospective effect. The revised pay structure has not been implemented for workmen staff, with whom (an) agreement is yet to be reached.” The bank also said there was “complete alignment and agreement” between the government and the bank on the desirability and the necessity of implementing the performance-linked variable pay. “The opposition is only from a very minor segment of employees, primarily consisting of Union Office Bearers, who have not accepted the idea of their performance coming under the scanner and their pay being accordingly determined.”
“Besides,” the spokesperson said, "following the development financial institution’s acquisition of IDBI Bank, its subsidiary, and United Western Bank, the service conditions needed to be harmonised “and brought in line with the industry standards”."
The revised pay structure envisages splitting the salary into two segments – where 70 per cent of the compensation package would be fixed and the remaining 30 per cent the variable component. An officer of the bank said, while employees in grades A, B and C have got on an average 25 per cent hike, the group D and E staff have got hikes between 45-65 per cent.
“The compensation package, and also the change in service conditions have been forced on the officers despite their opposition, and introduced without an approval from the government,” the officer added. The officers are also opposing the bank's statement on a circular dated February 23, 2010, that it would “review” and not “revise” pay scales from November 2012. The issue has also generated political interests, with CPI(M) leader in the Lok Sabha Basudeb Acharia deciding to oppose the move. “IDBI Bank has unilaterally decided on the pay scale of the staff and the officers. I have written letters to the ministry regarding this and will raise the4 issue in the Parliament.”
Also read: Feb 2: IDBI Bank gets variable pay surprise
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