Bankrupt Bankers and Irrelevant Trade Unions & Ill fated employees
Banking Scenario in India is characterized by morally bankrupt banks and trade irrelevant trade unions and ill fated employees. The banking intelligentsia that claim to be forward looking people committed to the welfare of the whole economy is founded on absurdities, especially in compensation for labour resulting in occasional labour unrest. About 65000 bank offices across the country remained shut on 27 July and 27 October in 2006 and another strike declared from 28th March, 2007 in furtherance of Pension Option was deferred on an understanding that unions would submit a proposal by April, 2007 and managements would settle issues by 30th June, 2007. A strike call for 12th September, 2007 United Forum of Bank Unions (UFBU), the body of bank unions has given pressing the Pension option afresh is in the air. Labour unrest may once again paralyze the banking system shortly.
Banks have a Pension Scheme that spells out the minimum service qualifying an employee for Pension and the other modalities of Pension. The ultimate solution to the issue is the extension of the scheme to those numbering about 8 lakhs in the industry who are yet to get the option, which the banks have arbitrarily and illegally denied to them. Want of a positive approach and moral bankruptcy of those handling the affairs are the reasons for not reaching a logical conclusion. The people who are believed to be the wisest men banked upon imprudence making a vague jumble of the whole thing. Money power makes them feel that they are not bound by the laws of the country. They act arbitrarily and illegally while pretending themselves to be the apostles of progress of the economy. Banks claim to be working for the progress and welfare of the society while they do not set right their own house by ensuring the welfare of those who made them what they are. Denial of fresh option to which they are legally entitled is illegal and unfair. Calling for a fresh proposal on Pension for consideration is totally unwarranted when a scheme is already in operation and all those who seek it are entitled to it. Agreeing to submission of fresh scheme was a total absurdity on the part of Trade Unions.
Trade Unions that collect about Rs.15 Crores as subscription from the members every month did not evince adequate interest in securing the cardinal requirement of their members. Pension Scheme commissioned in 1995 contained a draconian clause, vesting with the management the right to forfeit the entire past service of an employee for participation in strike even for a single day. This meant that, having joined the Pension Scheme by surrendering the employer’s share of compulsory PF contribution to the pension fund of the bank, if one participated in a strike, one would lose his PF as also Pension if one failed to secure the minimum qualifying service of 20 years afterwards. It prevented majority of employees from opting for Pension within the time frame, when offered in 1995. The Unions got the forfeiture of service clause scrapped from Pension Regulations in February, 1999. However, they conveniently forgot to secure a second option which, the members who could not opt for it earlier on account of the presence of the deleted clause in the Regulations became legally entitled to. Banks that had a legal and moral onus of extending a fresh option at this juncture did not carry it out. Moreover, they did not bring the amendment to the notice of the target group by issuing usual internal communication in English and Hindi detailing the amendment and stating that it will have effect from the date it is published in the Gazette of India. With malafide intention they confined to mere gazette publication, keeping the information in camera. Unions remained non performing on it until recently though the deletion of the forfeiture of service clause in 1999 vested with the employees a right to fresh option. If they are earnest in their approach, they have to clarify why the issue was kept in cold storage for about seven years. In the industry, a fresh option was extended in 2000 to employees of RBI alone.
Many a time, the policies adopted by bank managements and unions proved themselves to be irrational, imprudent and absurd. The ill fated work force that is devoid of Pension benefit is about 70 percent. Unions had a role in their not opting for the scheme as they had initially sent false signal to members in 1995 that PF would be beneficial to those with left over service of 10 years and above.
The Pension Scheme in Banks compulsorily envisages payment of Pension to those who are recruited after its inception. Ironically it refuses the benefit to those already in service who have the stipulated minimum service even against surrender to the Pension Fund their EPF contribution running in Rs. Rs.3.00 to Rs. 7.00 lakhs. The former is given the benefit without any contribution or sacrifice on their part.
The scheme implemented in 1995 gave coverage to all those who retired from banks on or after 01 01 1986 for securing Pension to a former trade union leader who retired in the year 1986. Such are the strange criteria in many a matter. The banks which approved Pension Scheme with retrospective effect of nine years and the unions which arranged it so should clarify the relevance of the date, if some other reason existed. Is it not absurd that employees who retired afterwards, after relentlessly toiling for 30 to 35 years and those who are still in service are not allowed entry to Pension Scheme? They are denied Pension which is their right akin to Fundamental Rights guaranteed by the Constitution and identified by different Courts as deferred wages to take care of their lives on loss of employment and cessation of income. It all speaks for the fact that unions operate for the welfare of leaders and not of the members. They are redefining trade union functions and project other trivial and national issues at the cost of the cardinal issue. In the process they achieve their own personal ends at the cost of collective bargaining and resorting to collective surrendering. Unions raising hefty subscriptions from members lack prick of conscience. Should they have, they should dip their flags and banners in the Arabian sea, shave off their heads, get clad in saffron and go on pilgrimage to have peace of mind.
When the economy is becoming so vibrant and banks are showing fantastic working results, there is absolutely no room for any apprehension on availability of funds. Payment of Pension to all is something that can be contained within the level of expenditure obtaining in 1995. Had the Pension Scheme been not implemented, banks would have to contribute to the PF of each employee on the rolls as also future recruits until their normal retirement. After transfer of the P F balances of those who joined the Scheme in 1995 into the Pension Corpus, banks did not make any further contributions in respect of such employees into the Fund. The PF liability in respect of fresh recruits also was not reckoned and transferred into Pension Fund. A back log of 10 years is now created during which period the establishment expenses were converted as profits and distributed as dividends to shareholders. If the demand for Pension Option to those in PF segment is met, their PF balances would go to augment the Pension Fund substantially. The notional PF contribution of those who joined already, that of the subsequent recruits, the existing PF balance of those who get admission through the option and the future contribution till retirement of all the categories would not less than Rs.60,000 Crores which would foot the entire Pension liability of all without any additional expenditure. Paucity of funds to pay Pension to all is hence quite illusory.
Public sector banks contribute a major portion of their profits to the exchequer, which is utilized for paying pension to government servants and legislators whose work is not directly resulting in any productive activity. A member of the Parliament or Legislative Assembly who serves for a short span of two years is earning a Pension in spite of subsequent ouster out of public dissatisfaction. The Bank employee who serves the entire effective life for the progress of the institution, and whose work is resulting in productivity and, is denied his eligible Pension. The amounts payable as Pension to a bank employee is snatched away for paying Pension to the government servants and public men. One can not reconcile the situation of robbing Peter to pay to Paul.
Over the past three four years, banks have been fighting with each other by offering reduced rates of interest to take over loan accounts from one another. The benefit went to the potent borrowers. The poor and deserving got no concession. Scope for corrupt practices in the corporate sector also existed while giving reduction in rates. The Banking system sustained loss of revenue of immeasurable proportion. Key men of banks squandered the resources of banks to aid their cosmetics. The amounts so lost could well have met the Pension obligation substantially. In spite of every thing, the industry is now giving very good signals through higher stock values, enhanced dividends, high reserves. In spite of the good indices and the paying capacity, the bank managements project paucity of funds to extenuate non payment of the statutory obligation.
The bureaucrats in banking are converting the Indian democracy into “demonocracy” even as the country is celebrating the diamond jubilee of independence. They do things at heir sweet will, without any rationale or legal backing and are reluctant to correct past mistakes even on realizing them. The Voluntary Retirement Scheme mooted in 2000 was an abetted one through incentives offered. Banks paid Pension to those who retired from the Pension segment from the ensuing month of retirement without the Pension regulations not having provision to do so before the age of normal age of super annuation. Regulation 28 of Pension Regulations was amended later on 13 July, 2002 to ratify the erroneous payments. Salary and Pension was concurrently paid to this lot during the left over service. People who retired voluntarily from one bank and subsequently joined other banks got salary as also Pension from the erstwhile employer for the same period along with salary from the fresh employer. The banking system is extending triple benefits to such people. A similar situation can not be seen in the whole universe other than with the prudent Indian bankers. In the case of retirees from PF segment, the PF contribution banks would have made till the date of retirement was not at all paid. Their exist was a surplus sacrifice that enabled banks to down size staff to reduce expenditure and make lustrous profits when they wanted. If there is any rationale in denying them their dues, IBA and Unions are welcome to clarify.
The people who retired voluntarily wile remaining in the PF segment are the most ill fated ones who became subject to utter discrimination and are left in the lurch. Bank managements that formulated several policies sans least intelligent reckoning, the trade unions who remained silent spectators to such things and the Government that gave assent to the unscientific formulations are all parties to the discrimination that infringes fundamental rights and violates the provisions of the constitution. Granting of hike in Pension in SBI in 2006, which resulted in three retirement benefits to SBI employees while their counterparts in other Public sector banks enjoyed two benefits only was another discrimination at the behest of the Ministry of Banking. The Ministers who took oath in the name of the Constitution assuring to preserve its sanctity, the bank managements that signed separate wage pacts in respect of SBI and rest of the Banks and the trade unions that lacks commitment to the members including former members who retired etc. are parties to the discrimination. All of them should open their eyes and correct the past mistakes by extending fresh pension option in its original form as given earlier to all those who have the qualifying service banks to eradicate anomalies. This is the only ultimate solution to garner industrial unrest and to prevent occasional interruption of banking service to the public. The left parties who profess to be scientific and labour oriented should also evince some interest by urging upon the Government to rescue the ill-fated employees who are devoid of their Pension to garner industrial harmony.
C N Venugopalan ceeyenvee@gmail.com
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