Unfavourable part of Pay Revision for exexutites on IDA Pattern

Through this , we (all the employee who have joined the Corporation after 1.01.07, the effective date of wage revision of executives on IDA pattern) would like to draw the kind attention of the Management towards the most disadvantageous part of the wage revision circular, cited above. If there are any employee who are in the most disadvantageous and unfavorable satiation by this wage revision are those employees who have joined the Corporation after the 1.01.07 and before the date of above circular i.e. 13.09.09. Because there is no increase in their gross salary, but it is decreased if we consider only Basic, DP and DA (difference between what they were drawing before revision and what they will draw after revision)
This may be very clear from the following example:-
Lets consider two employee ‘A’, who has joined the Corporation as on 15.12.06 as Manager and ‘B’, other employee who has joined the Corporation as on 15.01.07 as Manager. Now, as per wage revision circular, mention above, their salary will be fixed as below:-
Employee ‘A’

Basic Salary as on 1.01.09
Old Structure - Rs 9350 (after third increment)
New Structure - Rs 21670 (as per Annexure IV of the Circular)

Employee ‘B’

Basic Salary as on 1.01.09
Old Structure - Rs 9100 (after second increment)
New Structure - Rs 17410 (after 3 % annual increment on initial scale)

Now the gross salary (only Basic, DP & DA) of both the employee, for the month of October, 2009 on the basis of old structure and new structure, would be as under:-


Employee ‘A’
Salary for the month of October, 2009 (with Old Structure)

Basic = 9350
Add: DP (50% of above) = 4675
14025
Add: DA (@ 61.60% on above) = 8639
Gross Pay = 22664

Salary for the month of October, 2009 (with New Structure)

Basic = 21670
Add: DA (@ 25.30% on above = 5483
Gross Pay = 27153

Difference between the salary, as per old structure and as per new structure, for the month of October, 2009 is Rs 4489 (27153-22664)


Employee ‘B’
Salary for the month of October, 2009 (with Old Structure)
Basic = 9100
Add: DP (50% of above) = 4550
13650
Add: DA (@ 61.60% on above) = 8408
Gross Pay = 22058

Salary for the month of October, 2009 (with New Structure)

Basic = 17410
Add: DA (@ 25.30% on above = 4405
Gross Pay = 21815

Difference between the salary, as per old structure and as per new structure for the month of October, 2009 is Rs (-) 243 (21815-22058).

From the above it is very clear that there is no increment but the salary is decreased by Rs 243, when revised from old structure to new structure of employee ‘B’ who has joined the Corporation as on 15.01.07, after the effective date of revision, i.e. 1.01.07.

However, the salary of employee ‘A’ who has joined the Corporation as on 15.12.09, just 15 days before the date of revision, has increased by Rs 4489 (as above).

Now, if we consider the difference between the salary of employee ‘B’ and ‘A’ for the month of October, 2009 as per new structure, we find that there is a great difference of Rs 5338 (27153-21815), while the difference between the date of joining is only of one month. Moreover, as the most of the fringe benefits to the employee will now be calculated as a percentage of the Basic, this difference will further be increased to a far extent.

The only reason for this is that employee ‘A’ has joined as on 15.12.06 and he got the benefit of fitment formula in fixation of pay, while the employee ‘B’ has joined as on 15.01.07 and his salary has been fixed at the minimum of the scale. Thus there is great difference between the salary of an employee who has joined before the date of revision i.e. 1.01.07 and who has joined after the date of revision.

In the above situation, it is clear that employees who have joined after the date of revision i.e. 1.01.07 and before the date of pay revision circular, who were drawing the salary as per old structure are in the most disadvantageous and unfavorable situation. They are feeling very discouraged and injustice with this wage revision. This situation is also not in favour of the Corporation because it may lead them to search better employment option in other organizations. Even if they remain in the Corporation their performance may be discouraged by the above situation.

While giving the fixation formula for the existing employees who joined before 1.01.07, the minimum pay scale of the new employees who have joined after 1.01.07 has not been properly fixed. The solution for the above anomaly must be sought out in such a way that the salary of new employees who have joined after 1.01.07 may be fixed at par with those who joined before 1.01.07.

One of the solutions for this anomaly may be that Basic of the new employees may be fixed by applying fitment formula on his initial Basic as on the date of joining. Thus in the above example, the Basic salary of employee ‘B’ as on date of his joining i.e. 15.01.07, if fixed as per new structure by applying fitment formula, would be Rs 19930. This would resolve the above anomaly to a great extent.

We hope that the Management will look into the matter seriously and give a favorable consideration towards the injustice of the new employees so that they may feel encouraged.

The effective date of pay revision is 1.1.2007. So it can naturally benefit those who were in service on that date. The same thing happens on every occasion of pay revision and it is equally applicable to the new entrants in CDA. The "fitment benefit" is given in recognition of the service provided by the employee to the organisation. Naturally a person who was not in service on the effective date of pay revision should not expect the same.

The executives under IDA have been treated very unfairly by the Govt and more so in the higher levels. Even if full benefits of 50% allowances and 30% superannuation benefits are taken together, at the GM level a new entrant would get nearly Rs.10000 per month less than his counterpart in CDA. But at lower levels the difference is not that much and if the total pay elements incl. HRA and Allowances are considered, a new entrant at E1 (IDA) level would get slightly more than his counterpart entering PB3 with 5400 grade pay.

In the above example also, for person B, if differential HRA benefits are taken into consideration, there would be increase of about Rs.1000 in Metro cities and about Rs.1400 in most other cities.

The whole train of this discussion arises because of the fact that although the Pay Revision has been effected from 1.1.2007, the actual revision has been done only in 2009. Had this been done at the very time it became due, i.e. on 1.1.2007 itself then those who had been recruited after that date would not have existed at that point of time. Then they would had subsequently joined at the new scales itself. Further, in that situation, the interim relief in the form of 50% merger would not also have been provided. The quoted problem arises because of the fact that 50% merger benefit were allowed to all irrespective of whether they were entitled to fitment benefit or not.

The present situation also partially arises because of the normal human emotion of envy. Purely on technical point, the revision benefit accrued only to those who were in service as on the midnight of 31.12.2006. Neither to the person who had retired the day before, nor to the person who is appointed the day after. Yet, the person who retired the day before got absolutely nothing from the process is conveniently forgotten (he could have an even bigger grievance saying he got a gratuity of only 3.50 lakhs whereas the person retiring next month got 10 lakhs). On the other hand the person who got appointed later and will get around 20% to 30% increase in overall salary is not happy, just because someone who is senior to them and joined earlier is getting more.

The cut-off date often play a crucial role in our life . You are eligible to vote in an election if you are 18 on 1st January of the year. It does not matter if you turn 18 on 2nd January and even if the elections are held in the month of December. One can feel deprived but that is life. Also think of those who were born on 1st January 1947 but had to retire on 31st Dec 2006. They get nothing. No gratuity no wage revision.

Still we are trying to get maximum possible allowances and superannuation benefits and also trying for upgraded payscales so that there is financial benefit for everyone.

ida pattern wage revision is best among all in respect of 3% inhance per year togetherwith 30% fringe benefits. only debacle seems in including hra in pay percutes which need rectification if possible?
r c srivastava lucknow

In the past few days, there has been several outbursts in various forums from many Managers appointed after 1.1.2007 airing their grievance on the supposedly Raw Deal they got in the pay revision. What they conveniently forgot was that the pay revision was actually due on 1.1.2007, when such persons did not exist in the Corporation and had it been given on that date, all such persons would have joined in the new scale itself, without any right of revision of pay.

Any pay revision process consists of three components, fitment benefit, DA neutralisation and better allowances. The fitment benefit part is the exclusive benefit given to the employees existing on the date of revision and future employees have no right to claim the same. The benefit of DA neutralisation and better allowances are the right of both existing as well as future employees.

What is also forgotten is that the pay revision process is not yet complete and the issue of allowances and super-annuation benefit is yet to be finalised. Even the component of HRA is yet to be revised due to the question of effective date. The Officers Association had been trying relentlessly to get the best possible deal for the officers on these components.

As is evident from the MOU signed with the Staff Unions, consequent to the lead role taken by the Officers Association, the Management has in principle agreed to the demands of employer funded Pension and Post-retirement Medical schemes, although the same needs further approval of the BoD and Ministry before the same could be materialised. The exact percentage of Allowances under the cafeteria approach is also yet to be decided by the BoD, although it is expected to be decided in the meeting scheduled on 18th Nov.

Taking into consideration the expected supperannuation benefits and other allowances @40% of Basic pay, let us calculate the CTC of a person joining the corporation as Manager in 2009 itself and posted at any of the Metro cities. The impact of Medical and LTC benefits, though relevant, have not been considered.

CTC as on Sept 2009
i.e. before revision

Basic Pay : 8600
DP: 4300
DA: 6450
HRA: 3870
CCA: 300
Tiffin All.: 125
Conveyance: 800
Sub-Total : 24445
Annualised : 293340
Paid Leave 30 days: 19350
Employers Contribution to CPF: 27864
Gratuity (15 days) 9675
Total CTC: 350229


CTC October 2009 onwards

Basic Pay : 16400
DA: 4149
HRA: 4920
Other Allowances @ 40% 6560
Sub-Total : 32029
Annualised : 384348
Paid Leave 30 days: 20549
Employers Contribution to CPF: 29591
Gratuity (15 days) 10275
Employers Cont. to Pension 24659
Employers Cont. to Med. Fund 9444
Total CTC: 478866

% increase in CTC : 36.73%

So if everything goes smoothly, after the complete process of pay revision is over, a Manager who has joined the corporation in 2009 itself, is expected to get an increase of nearly 37% in CTC.

That too even if we do not get the Pay Equivalence with CWC and other PSUs that we are still fighting for.

Whether a CTC of 4.79 Lakhs (plus full Medical Reimbursement and LTC benefits) to a practically fresher, that too without the pressures that accompany a private sector job, can be called "poor salary" is debatable. And whether an increase of 37% can be called “Raw Deal” is also open to debate.