The government has asked the unions of the PSU general insurance (GI) industry to accept “performance linked future wage revision’’ before it approves the pending wage revision along with arrears since August 2017. There will be a total outgo of Rs 8,146 crore from all four companies and fresh capitalisation by the government for meeting wage revision expenses.
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According to an official, in a meeting of the officials of Department of Financial Services (DFS), GIPSA, the coordinating agency of four PSU general insurers, GIC Re and recognised unions, a senior DFS official categorically said that Finance Minister Nirmala Sitharaman wanted an assurance from the unions for implementation of performance linked wage revision before approving the pending wage revision for the industry. Industry observers say the government has to provide capital to the three companies (United India, National Insurance and Oriental Insurance) for implementing their new wages.
With the 12 per cent hike along with five years of arrears, wage bill for National Insurance will be around Rs 2,177 crore, Rs 2,080 crore for New India Assurance (NIA), Rs 2,135 crore for Oriental Insurance and Rs 1752 crore for United India Insurance.
DFS officials informed the unions that wage revision could be released within five days if the union gives an assurance that they would allow smooth implementation of performance-based wage revision in the industry. GIPSA had called for an urgent meeting of unions after the Finance Minister refused to give her nod to the 12 per cent final wage revision proposal of the industry unless the unions agreed for the new revision method. However, in the meeting, the unions responded by reminding the earlier assurance of DFS Joint Secretary Sourabh Mishra and the GIPSA towards sharing the consultant report prepared by Ernst Young (E&Y).
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The unions wanted the report of E&Y — hired by GIPSA to turn the PSU general insurers into agile as well as profitable — to study the consultant’s proposals, including performance linked future wage revision, before its implementation. The unions have further clarified that they were not against KPI (key performance indicator) being the sole criteria for assessing the performance and pay structure of PSU insurers in the future but these concepts need detailed and serious discussion, sources said.
Moreover, the unions had asked the DFS and GIPSA to clear the pending wage revision at par with Life Insurance Corporation (LIC) without any condition or linking it with “performance linked future wage revision’’ before Diwali and then to come out with a new proposal for wage revision with effect from 2022-23.
Observers point out that the condition of performance linked revision may not be accepted by the unions easily and will further delay the conclusion of ongoing wage negotiation for the industry. The ministry while finalising the wage revision had earlier informed the unions that the next wage revision will be based on the performance of each PSU general insurer and each individual within the company.
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The unions had reservations in accepting it and wanted more details on the issue.
It is now almost over a month since the Finance Ministry had finally rejected the demands of unions for a wage revision on par with LIC and was expected to notify a 12 per cent hike for the industry soon though unions had not agreed with the proposals.
The government last year had approved a 16 per cent wage revision with arrears for the employees of IPO-bound LIC and had even finalised a hike of 15 per cent with arrears for the PSU banking industry in 2020.
