12% hike for PSU GI staff comes with a rider

Mumbai: Finally, the central government has notified 12 per cent wage hike, since August 2017, for the 44,000 workforce of PSU general insurance (GI) industry and has also now made it a rule that the next revision due from August will be in the form of a variable pay based on the performance of the company and the employee.

"The next revision due from August 2022 will be in the form of a variable pay based on the performance of the company and the employees," says the notification, issued by Joint Secretary in the finance ministry, Saurabh Mishra.

With the 12 per cent hike along with five years of arrears, wage bill for National Insurance Company (NIC) will be around Rs2,177 crore, Rs 2080 crore for New India Assurance (NIA), Rs2,135 crore for Oriental Insurance Company (OIC) and Rs1,752 crore for United India

Insurance(UII). In total, there will be an outgo of Rs8,146 crore from all four companies for meeting wage revision expenses, said analysts.

Talking to Bizz Buzz, Trilok Singh, General Secretary, General Insurance Employees' All India Association(GIEAIA), said: "We salute all the office bearers and members of GIEAIA and all the unions, associations and welfare associations for their long struggle in achieving the present wage revision at 12.05 per cent in extremely difficult conditions although we were demanding at par with LICI and tried our level best.We hope the issue of increase in family pension and company's contribution at 14 per cent to NPS optees shall also be addressed soon."

Singh further added that GIEAIA once again called upon the entire leadership and rank and file to put forth best efforts to strengthen public sector general insurance companies (PSGICs) to fight against unilateral and unconstitutional imposition of KPI,restructuring and to seriously intensify the struggle for formation of single monolithic corporation by merger of all four PSGICs. Earlier, FM Nirmala Sitharaman, after a bit of haggling over 'Performance-Linked Future Wage Revision', had cleared the 12 per cent wage revision proposal of the PSUGI industry before leaving for US to attend annual meetings of World Bank and International Monetary Fund.

Now, General Insurance Public Sector Association(GIPSA), the coordinating body for the four PSU GI companies and General Insurance Corporation of India(GIC Re), will issue administrative guidelines about the quantum and timeline for payment of higher salaries for the industry. The unions have criticized the government for mentioning 'conditional future performance linked pay revision' in the Gazetted notification and have already threatened agitational path in case of unilateral imposition of such a rule. Vishnu Aggarwal, General Secretary, Oriental Insurance Company Officers' Association (OICOA), said: "Now, we have to concentrate on non-core benefits, 14 per cent NPS employer contribution, improvement in family pension and other pending issues. We may have to resort to agitational path in case of unilateral imposition of KPI, hence request the workforce to be ready for the same."

Contrary to our expectations, the ministry has put the lines regarding conditional future performance linked pay revision, which is highly condemnable. We shall take suitable action in consultation with National Confederation of General Insurance Officers Association (CONFED) and Joint Forum of Trade Unions(JFTU), he added.

The unions had earlier 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.

The unions want that the government should share 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 also have now 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. In `performance linked wage revision' the performance assessment of each employee will be linked to the performance of the organization along with his/her own performance, GIPSA had said earlier in a letter to the unions of the industry.