The oldest Union of the Bank Employees AIBEA has issued Circular highlighting today as a Historical Day in the history of Trade Union Movement of Bank Employees. It is on this day, a new era of negotiated settlements dawned in the Banking Industry following powerful agitations demanding settlement of employees’ issues through discussions sitting across the table with employees’ organizations. The First Bipartite Settlement was signed on this 19th day of October in 1966. In the process of signing of First Bipartite Settlement AIBEA which was having a commanding position at that time in terms of huge support from Bank Employees committed a grave Historical Mistake. Here is an attempt to locate that mistake and its adverse impact on bank employees during successive years.
AIBEA held its 11th Conference in Hyderabad in April, 1960, 12th in Calcutta in September, 1962, 13th in Trivandrum in February, 1964. In all these Conferences emphasis was given for conducting massive campaign on two vital issues, viz. nationalization of banking industry and Industry level direct negotiations between Bankers and Workmen for settlement of demands. The employees responded to the call magnificently and raised their voice unequivocally centering round those two very important demands.
In the meantime Desai Award was due to expire on 31.12.1962. But the Government extended it for one year up to 31.12.1963. AIBEA formulated its wage demand in Trivandrum Conference in February 1964. It is here a Historic Mistake was committed and this mistake proved costly over a period of time and is the sole reason for present pathetic condition of Bank Employees. What was that mistake? Let us analyze it.
15th Indian Labour Conference was held in 1957 which is known for bringing significant changes for welfare of employees of the country. In this Conference, the representatives of all types of employers, employees and Government participated. The most significant participation was that of Late V. V. Giri Ji and Late Guljari Lal ji Nanda, the two leaders who are known for working in Trade Unions and contributing support to employees. The 15th Indian Labour Conference tried to resolve the issues relating to fixation of wages for employees adopting reasonable and scientific methods. Accordingly, principles for determination of need-based minimum wage, fair wage and living wage were evolved. These principles start guiding Trade Unions in formulation of charter of demands demanding wage revision. These principles were also adopted by Central Pay Commission. The 15th Indian Labor Conference (ILC) in 1957 had determined the need-based minimum wage for a single industrial worker. The norms set by the ILC had said that it should cover all the needs of a worker’s family.
The normative family is taken to consist of a spouse and two children below the age of 14. With the husband assigned 1 unit, wife, 0.8 unit and two children, 0.6 units each, the minimum wage needs to address 3 consumption units.
The food requirement per consumption was derived from the recommendations of Dr. Wallace Aykroyd, the noted nutritionist of that time. Aykroydn had stated that an average Indian adult engaged in moderate activity should, on a daily basis, consume 2,700 calories comprising 65 grams of protein and around 45-60 grams of fat.
Aykroyd had further pointed out that animal proteins, such as milk, eggs, fish, liver and meat, are biologically more efficient than vegetable proteins and suggested that they should form at least one-fifth of the total protein intake.
The clothing requirements should be based on per capita consumption of 18 yards per annum, which gives 72 yards per annum (for a family of 4) or 5.5 meters per month for the average worker’s family.
For housing, the rent corresponding to the minimum area provided under the government’s industrial housing schemes is to be taken. The 15th ILC kept it at 7.5% of the total minimum wage. Besides, fuel, lighting and other items of expenditure should constitute an additional 20 percent of the total minimum wage.
AIBEA committed historical mistake at Trivandrum Conference departing from the previous approach of preparing detailed charter of demands incorporating therein need-based minimum wage, fair wage and living wage as per decision of the 15th Indian Labour Conference. AIBEA, this time submitted demand for wage increase @ 20% to the Banks seeking negotiation across the table for settlement. But the Government again extended the term of Desai Award for another year up to 31.12.1964. This created acute resentment among the employees. At the call of AIBEA they, for the first time in banking industry, resorted to Work to rule and non-cooperation movement throughout the country on and from 20th July, 1964, demanding bipartite settlement.
Under the impact of the movement the entire banking operations in the country came to a standstill and its pressure was felt by both the Government and the bankers. As a consequence through the intervention of Chief Labour Commissioner (Central) a tripartite meeting was convened and a Memorandum of Settlement was signed on 18th August 1964 between the AIBEA and the IBA (Indian Banks Association) and EBA (Exchange Banks Association), conceding an immediate ad-hoc increase of two extra slabs of D.A. and agreeing to start industry-level negotiations for settlement of the workmen’s demand. Thus the era of tribunals ended in the banking industry and ensued different rounds of talks between the parties-opening a new chapter in the middle class movement of the country.
The talks were actually concluded in May 1966 and the settlement was signed on 19th October 1966 in the presence of Chief Labour Commissioner (Central). Before signing the settlement the gist of the draft agreement was placed before and approved by the 14th Conference held in Delhi from 26th June to 1st July 1966, ignoring critical concern voiced by some comrades about inclusion of the management’s issue of ‘mechanization’ in the settlement as a package deal and resorting to percentage increase concept ignoring approach of need based minimum wage, fair wage and living wage.
The settlement was also signed on the dotted lines with INTUC-affiliated All India Bank Employees Federation. A further negotiation and settlement on wages and service conditions of the bank employees with the Northern India Bank’s Association was signed in 1967.
The tale of struggle and the historical victory which had begun from the Shastri Award and the Desai Award which had sent the bank employees in a more respectable state in comparison to the workers in the central government and with other general level, had begun to faint down due to the historical mistake committed by AIBEA by departing from the resolution adopted at 15th Labour Conference and instead resorting to demanding percentage increase in Salaries. The most significant blunder was committed during the the fourth bi-lateral agreement and it lost glitter consequent to the pact on pension and computerization dated 29-10-1993 whereby the status of struggle was taken up by surrender. From that time till this date the bank employees are, in comparison to the workers in the central government and in the general levels regulatory training behind in so far as their salary and pension are concerned. Moreover the life insurance employees who fall in the same category of the bank employees in eyes of the finance ministry and whose salary pact comes next to the bank employees, and who used to look upon the salary pact of the bank employees with disdain and had been entering into pacts taking the same to serve their basics have now surpassed quite ahead in comparison to the bank employees? Who is the accused behind making of the good luck of the bank employees into bad luck? Who is after all responsible for the present worst condition of the bank employees?
It is believed that the pacts about salary and other service related conditions entered between the employees and the management and reached between them by mutual negotiation become ideal. The laborers world over go struggling to achieve such an ideal status. That is why after the Shastri Award and the Desai Award and consequent to the talks between the bank employees and the bank managers organization, IBA, the erstwhile gained right to enter into bilateral pacts as well as in the board of directors of all banks to appoint representatives of the employees and officials, thereby they obtained a partnership right in management of the banks, they felt rejoiced. In that event they felt that through sustained struggles the leaders of the labour organizations who succeed in making the historical achievements would hereafter pile up heaps of their achievements and so the bank services would become the first choice of the striving youths of the country. To-day when we peep into the present history we find that the ideal system of talks between the IBA and the leading unions on the basis of mutual negotiations have not only failed in the meeting the hopes and expectations of the bank employees in terms of salary, pension and settling the service conditions but even it could not sustain the success that the bank employees had received through the Shastri Award as well as the Desai Award. The young bank employees are to-day in majority. They have pinned golden future to their bank service and these struggling youths are oblivious to the fact that the circumstances would lead their future from heaven to earth. It is therefore, necessary that once again to bring to their knowledge of the historical slab ground and approach road to regain the respect, honour and self-respect be probed.
What do the Shastri and the Desai Awards say?
The leaders who adopt the basis of payment capacity and profit and placed in terms of growth percentage are to-day seen avoiding to speak on equality and parity. They are not enlightening the youths on the principle of equality and parity that was acknowledged about 65 years ago through the Shastri and Desai Awards. When it is accepted undisputedly that since the bank employees’ service conditions are being determined on the basis of Shastri Award, then on the Desai Award and finally through the amendments reached under bilateral pacts, then why is the game of going ultra-virus to the principles of equality and parity as laid down in the Shastri Award and the Desai Award which have never gone under any amendments till this date? We are providing therewith, for information of the youths the provisions of the Shastri and Desai Awards as it appears therein, the material which deals on the topics of equality and parity.
We can draw helpful comparisons between wages in the major banks and those in small banks, between banks on the one hand and certain industries on the other between the bank awards and the awards in insurance companies, oil companies and textile companies. The rates of pay in certain departments of Government such as the Posts & Telegraphs and in State Governments will also furnish material for the construction of a pay scale for the bank workmen. Above all we have the report of the Central Pay Commission which is now considered an authoritative and useful guide to problems relating to wage determination at least among Government employees. There are several affinities between bank workmen and Government clerks, bank subordinates and Government menials. The Central Pay Commission had before them the very same clerical class and the class below it. Mr. Vimadaial developed the industry-cum-region principle with great force and wealth of illustration from recent cases."
Para 252 of Sastry Award
"In matters of education, intelligence, social needs, family responsibilities, standards of living and outlook on life there is a fair degree of similarity between the clerks that work in a bank and those that work in a Government department. The Government, it is said, has to be an ideal employer and treat the employees fairly and with due regard to their human needs. The Government, unlike the banker or the manufacture, is not wholly dependent upon periodical returns from the sale of goods or services. Government’s income is largely drawn from taxes and it is a vaguely indefinite fund susceptible of indefinite increase Though there is some element of truth in these considerations the Government has to think in terms of national income, national outlay and what the country can reasonably aflord to pay its workers. In Government service however there are certain special privileges like a pension on retirement with commutation facilities and certain concessions like free medical treatment educational fee concessions and so forth."
Para 259 of Sastry Award
"Having considered all aspects of the matter, I am of the view that to the extent that prevailing rates of wages in similar occupations in the same localities play a part in fixation of wages, the workmen have made out a case for an upward revision of their emoluments".
Para 5.181 of Desai Award
These provisions of the Shastri Award and the Desai Award describe undoubtedly and indisputably that while fixing salary of the bank employees the modus adopted had been to compare salary of the bank employees with that of the salaries of the central government and the other general work categories to reach, on that basis a salary scale. In this context it would be appropriate to quote herewith the para: 127 of the Shastri Award which describes the principle in determining the salaries scale:
"We shall conclude this chapter by quoting an extract from paragraph 199 of the Sen Award. A wage scale must primarily insure against the feeling among the employees that they are unable to meet the ordinary responsibilities of their life and that they are thus being unfairly treated; it should also be such that they do not succumb to the temptations that often come in their way, oftener than in most other industries; it should further be such as to inspire and maintain their loyalty and co-operation. The last factor is important but is often for gotten or lost sight of by the employers. There is no reason why Government service should by being regarded as the best kind of service for clerks, continue to attract the best kind of recruits from the middle class. At least the bigger banks should not be satisfied with the second best or a lower class of recruits, and they must be prepared to pay at a scale sufficient to compensate the relative insecurity of tenure and (in many cases) the inadequate retiring benefits inherent in their services, as compared with the benefits and advantages to be found in Government services, The result of the introduction of better scales of pay and allowances than exist at present is likely to be the gradual elimination of inefficiency, dishonesty and deliberate shirking of work to a marked degree, so that in time the introduction of improved methods of organisation would be rendered possible". We respectfully agree with these observations"
Had IBA not committed Historical Mistake of resorting to demand in terms of percentage increase and had remained confined on scientific approach of determination of need based minimum wage, fair wage and living wage adopted at 15th Labour Conference, adopted by Central Pay Commission and applied in Sastry and Desai Award, the ideal mechanism of collective bargaining and settlement through negotiations across the table would have benefitted the Bank Employees.
Later IBA committed another big mistake when Banks were nationalized and Banking Regulations Act, 1970 came into existence which does not recognize Indian Banks Association. Provisions were made giving right to Government of India in consultation with Reserve Bank of India. AIBEA must have insisted for abolition of rights of Indian Banks Association in the matter of negotiation and Settlement and would have insisted for negotiation with Department of Economic Affairs which is now known as Department of Financial Services thereby eradicating middleman role of Indian Banks Association.
When we look back at the history of Trade Union Movement in the Banking Industry, we find that AIBEA which was established by Leaders of extra ordinary courage, conviction, devotion and fighting caliber started disappearing from the scene by 1964 and were replaced by leaders having compromising attitude which is reflected in the mistake committed at Trivandrum Conference in 1964 which adopted demands in percentage increase terms. These Leaders of compromising attitude mixed struggle with settlement and hence there compromising attitude could not be felt. But then these leaders also disappeared over a period of time and have been replaced by Leaders having surrendering attitude. These are the leaders who have occupied top position in well established AIBEA not on the basis of their fighting capabilities but on the basis of their closeness with earlier compromising leaders. Present young employees feel this surrendering attitude and this is the reason for widespread resentment.
We Bankers is attempting to correct the Historical Mistake committed by AIBEA just prior to signing of First Bipartite Settlement. It has adopted the same unitary organizational set up which AIBEA had adopted at the time of its formation way back in 1946, it is trying its best to bring back the same fighting spirit which founders of AIBEA had displayed and had achieved better salary through Sastry Award and Desai Award giving weight age to risk factor associated with working in banks and thereby having slightly better Salary as compared to Central Government Employees having no such risk factor.
