JSTOR_Collective Bargaining in Banks in India

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Collective Bargaining in Banking Industry in IndiaAuthor(s): B. Sakunthala and K. Sainath NemaliReviewed work(s):Source: Indian Journal of Industrial Relations, Vol. 33, No. 4 (Apr., 1998), pp. 527-536Published by: Shri Ram Centre for Industrial Relations and Human ResourcesStable URL: http://www.jstor.org/stable/27767559 .Accessed: 24/02/2012 00:57

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528 Indian Journal f ndustrial Relations

mirrors broad changes taking place in unions, in business and insociety at large.

Trade unions are believed to be wage influencing organisations.They are concerned with the presence and the activity of anassociation of employees inprotecting and improving theworkingconditions of their members. The acceptance of trade unions as

representatives of workers by the governments, employers and

general publichas increased over the years. Trade unions are no

longer confined to different categories of blue collarworkers. Nowtrade union attitude isgaining popularity among white collared jobholders also. The trade union leaders andmanagements in all bankshave realised the importance of collective bargaining in estabHshingand promoting healthy and cordial relations in their day to dayadministration.

In view of the above facts, n attempt ismade in this paper to

presentthe various

bi-partite agreementsentered into between All

India Banks Employees Association (AIBEA) and NationalConfederation of Bank Employees (NCBE) on one hand and theIndian Banks Association (IBA)on the other, with regard towagesettlements in the banking industry, nd the role played by the tworecognised unions.

BIPARTITESETTLEMENTS

Although unions had succeeded in securing better workingconditions through tribunals, their success was not 100per cent.In view of this, unions began to adopt bilateral approach. The

managements also agreed to settle the differences with theworkers' recognised Employees' Unions through bipartitesettlements. The first agreement in the industry was made on19-10-1966 (IBA, 1984) which covered basic wage, dearnessallowance, house rent allowance and other working conditions.The agreement was reached between the AIBEA on behalf ofprivate banks and the IBA on the one hand, while on the otherhand, a separate agreement was made between All India StateBank of India Staff Federation (AISBISF) and State Bank of India(SBI)Management in 1970.On 12thMay, 1970, in respect ofwagestructure of 'A' Class Banks, AIBEA entered into one more






recognised unions in the industry submitted a charter of demands.The basic pay scales recommended by Sastry Tribunal were lessthan those of Sen Tribunal. An evaluation of demands of theassociation and the award of Sastry Tribunal disclosed that, y andlarge, there were some differences in the case of scales andclassification of banks and areas. Both the unions and managementspreferred to refer the award to the Labour Appellate Tribunal. Thisled to the implementation of the modified pay scales by the

Government to theemployees (IBA, 1962).

In 1960, a strike for 21days by SBI Federation saw the birth of the Desai Tribunal. ThisTribunal gave a higher basic pay in respect of all banks inall areas.It also abolished area IVwhich came into light due to the SastryTribunal. Though the union had succeeded in improving theworking conditions, the outcome seemed to be not satisfactory innature. For instance, a clerk who was working in 'A' class bank inArea 1 could improve hisminimum basic pay from s. 96 toRs. 140showing an increase of Rs. 44 over a period of twelve years. An

amount of Rs. 115 toward the improvementin

respect ofmaximum

basic pay (290-405)during the said period is also noticed. The sametrend is observed with regard to other classes of banks of differentareas.

In respect of Subordinate Staff working in 'A'class banks inAreaI they could improve theirminimum basic pay from s. 60 toRs. 86showing an increase of Rs. 26 over a period of twelve years. Withregard tomaximum basic pay, it ncreased from s. 89 toRs. 112,an

enhancement of Rs. 23. The same trend is noticed with regard toareas II and IIIof all classes of banks. The analysis indicates that, toa certain extent, over a period of twelve years ranging from 1950

62, the award unions in the industry had succeeded in securing an

improvement in the basic scales for both clerical and subordinatestaff. able 1 shows the basic pay scales of different wards during1950-62.

Unions preferred collective bargaining in order to improve

their working conditions, which resulted in five bipartitesettlements. In addition to this, the sixth bipartite settlement wasreached between the unions and management on October 8,1994.The striking feature of all the bank employees working in all thebanks is that they draw the same scales of pay, on the basis of



Communications 531

their cadres. The study has revealed that there is an improvementinbasic pay and total emoluments of the award staff n the banksdue to various settlements. The minimum basic pay of a clerkincreased from Rs. 154 to Rs. 1,660 over a period of twenty eight

years, showing an increase of Rs. 1,506 and in percentage, it is977.92.With regard to themaximum, the difference between the.first o fifth settlements was Rs. 2,400, showing an increase of521.74 per cent. The average increase in terms of percentages are34.92 and

13.03,in

respect of bothminimum and maximum

respectively. The same trend is also noticed in the case of totalemoluments also. They increased by Rs. 1,002.56 and Rs. 3,212.32,in respect of both minimum and maximum total emolumentsrespectively. The average increase in terms of percentages are12.63 and 13.55, respectively.

IMPACT OF COLLECTIVE BARGAINING ONWAGESTRUCTURES

In the following paragraphs, an attempt ismade to discuss theimpact of bilateral agreements on wage structures in bankingindustry, ith regard to clercial subordinate staff. or the purposeof wage structures pertaining to 'A' class banks, both recognisedunions, the AIBEA and the NCBE, are in existence. The wagestructures spread over 28years, that s thebi-partite era,which coversfrom 1st to 5th settlements, is studied. Tables 2 and 3 give the netincrease in total emoluments of award staff during five bipartitesettlements.

The data presented in Tables 2 and 3 consist of basic pay(minimum and maximum) including DA and HRA pertaining toclerical staff nd subordinate staffworking in 'A* lass banks of semiurban places with non-CCA (City ompensatory Allowance) centres.To arrive at total emoluments, basic pay+DA+HRA alone are

considered. In order to calculate the net increase, the minimum basic

pay that was drawn on the first day of implementation of the

agreementand the last

dayof

expiryof the

agreementare considered.

DA based onworking class index is considered for the 1st and 2ndbipartite settlements, whereas, in the case of third, fourth nd fifthbi-partite settlements, A is calculated on the basis of the consumer

price index.




It is observed from the tables that there is a definite netincrease in the total emoluments from 1st to 5th bipartitesettlements over a period of 20 years. The net increase has risenfrom 20.06 to 89.39, showing a difference of Rs. 69.33 during thesaid period. The average net increase during the 20 year periodisRs. 347 per annum with regard tominimum total emoluments.It is also noticed that there was an increase in minimum

emoluments at the time of expiry of each agreement during five

bipartitesettlements.

The sixth bipartite settlement, which came into effect fromNovember 1, 1992 led to an improvement inwage by 10.5 percent. In addition to this a 6per cent increase is achieved by unionsin terms of pension from November 1, 1993. Hence the totalachievement is 16.5, in terms of percentage. Details with regardto the merger of dearness allowance with basic salary and theactual increase in house rent allowance, conveyance and medical

benefits areyet

to be worked out. Thisagreement

affects around8.5 lakh employees (Award Staff) in the banks. It is understoodthat the managements and unions have agreed to merge thedearness allowance component upto 1148 points with the basicpay.

The mathematical models (Pao Lun Cheng, 1968) employedto study the effect of collective bargaining inwage negotiationsdiscloses that the union cannot always improve upon its expected

utility, thoughit can make some concessions

beyond21.77. The

negotiations which came to an end during October, 1994 alsorevealed the same facts. It does not, however, mean that both

parties have arrived at a perfect understanding, as per thesettlement. Some differences always exist between these twolevels. According toNash (1953)both parties may agree to settledown at the average level. The predicted level of settlement is16.3 in terms of percentage. The actual settlement is 16.5 per cent

which includes both basic wage and pension. From the above

analysis, it isseen

that thereis an

impactof collective

bargainingand trade unions on wage negotiations in the banking industryin India.



Communications 533

REFERENCESIBA (1962),All India Industrial Tribunal (Bank Disputes) Sen Award to Desai

Award, Bombay, 1950-62.

IBA (1970),Bi-partite Settlements, Second Bi-partite Settlement Between IBA andAIBEA, p. 94.

IBA (1979), Bi-partite Settlements, Third Bi-partite Settlement Between IBA andAIBEA, NCBE, p. 145.

IBA(1984),Bi-partite

Settlements Between CertainBanking.... represented by

theIndian Banks Association and their Workmen (1966 to 1979), Bombay,

p.i

IBA (1994), Bipartite Settlements, Sixth Bipartite Settlement Between IBA andAIBEA, NCBE, New Delhi.

Nash (1953), "Two-person Co-operative Games/' Econometrica, Vol. 21, January,pp. 128-140.

Pao Lun Cheng (1968), "Wage Negotiation and Bargaining Power," Industrial andLabour Relations Review" Vol. 21, Number 2, Cornell University Press,

New York, January, pp. 163-182.SBISU (HC) (1990), Special Circular, Fifth Bi-partite Settlement, Hyderabad, 10th

July.

State Bank of India Staff nion Circular No. 64, June 1984,Madras Circle, Madras.



Ol 8 -<*S) r?i *3 O

asic

PayScales

ofifferent Awards (1950-1962)

(Inupees)

Category/Classofank

Area

I

SenAward

AreaI reaIIrea

Award

Government Modified

Scales Desai Award

AreaI reaIIreareaI reaIIreaVreareaI reaII

Miaax.in.ax.in.ax.

Min.ax.in.ax.iaax.

Minax.in.ax.in.ax.in.ax.

Miaax.iaax.in.ax.

Clerical

Staff

Classanks690248012 Classanks285843607 Classanks665325291

Classanks ubordinatetaff

Classanks099809 Classanks656587 Classanks293052

Classanks

8580345627 7345627700 6627700491 5700491182

4026948 3694827 3482706 3270685

8580755345627

77366271709700

6936318000491 5700491182182 402694848 369482727 348270606 327068585

1400530692037 1203720371207 1203712070481

8612007404 8007404801

740480128

Source: Sen Award, Government

Modified

Scales and Desai Award (1950-62)



n S o en Ol Ol

Table:mprovementnheetncreasefwardtaffuringheivei-partiteettlementsClericaltaff)

Dateinimumaximum

Bipartiteasic.A.RAotaletasic.A.RAotalet

settlementss.s.s.s.ncreases.s.s.s.ncrease

1.1.67

1.1.70

1st2nd

142 170

123.5412.60

11.004.00

276.5496.60

20.06

414550

360.1813.50

18.008.00

792.1881.50

89.32

1.1.70.9.78

2nd3rd

170325

295.80

160.88

14.00

19.50

479.8005.38

25.58

5501040

957.0014.80

18.002.40

1525.00617.20

92.20

1.9.78.7.83

3rd 4th

325520

379.9913.20

19.501.60

724.4974.80

50.31

1040660

1169.20

647.80

62.40140.00

2271.60447.80

176.20

1.7.83

1.11.87

4th 5th

520900

520.0098.99

41.602.00

1081.60170.99

89.39

1660 835

1580.0013.55

132.8000.00

3372.80648.55

275.75

Source:oipartiteettlements



Ol s Su! s o*

ward Staff

During

theive Bi-partite Settlements (Subordinate Staff)

Dateinimumaximum

HRA

Total

Netasic D.A. HRA Total Net

settlements Rs. Rs.Rs.Rs.Increase

Rs.Rs. Rs.Rs. ncrease

1.1.67

1.1.70

1st 2nd

92 16

106.7290.44

9.0011.00

207.7217.44

9.72

145200

168.2052.00

11.00

14.00

324.20

366.00

41.80

1.1.70.9.78

2ndrd

116245

269.12

151.90

11.004.70

396.1211.60

15.48

200455

464.00

282.10

14.00

27.30

678.0064.40

86.40

1.9.78.7.83

3rd4th

245430

362.6011.56

14.700.00

622.3081.00

59.26

455790

673.40

388.68

27.30

1128.30

63.20

1241.88

113.58

1.7.83.11.87

4th 5th

430815

516.00

180.19

40.005.20

986.001060.39

74.39

790

1510

948.00

333.86

63.20801.2020.80964.66

163.46

Source: I to

Bipartite

Settlements

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JSTOR_Collective Bargaining in Banks in India