IBA’s views would have a major bearing on LIC’s negotiations

Nearly 900,000 employees of public sector banks and the Life Insurance Corporation (LIC) can look forward to early conclusion of the ongoing wage settlement.The Indian Banks' Association (IBA) has concurred with the unions’ view that the model code of conduct that has come into play in the wake of elections being called will not apply to their talks.

The code prohibits government from announcing populist measures up to the elections.“Wage negotiations will go on as usual. The code of conduct does not come into play in this case,” IBA chief executive, K Ramakrishna told Financial Chronicle.IBA’s views would have a major bearing on LIC’s negotiations, since the latter generally takes a cue from the developments in the banking sector.

A five-year bipartite bank wage settlement is signed between bank unions with the IBA, the representative body of bank managements, while the LIC agreement is worked out between the management and unions. Once the settlement is reached, the details are sent to the finance ministry for approval. The earlier settlements ended in 2007.

Fearing a possible delay in concluding the negotiations, bank unions, under the umbrella body, the united forum of bank unions (UFBU) and the LIC employees’ unions had separately sought the intervention of stand-in finance minister, Pranab Mukherjee. “We seek your personal intervention so that the wage negotiations do not get strangled,” general secretary, All-India LIC Employees’ Federation, A V Nachane, had said in a letter to Mukherjee.

Nachane said that legal opinion suggested that the wage agreement could be signed in the run up to the elections.“We are advised by ex-judge of the Supreme Court that the code of conduct does not interfere with the ongoing processes of wage negotiations where the money does not flow from the central funds of the government of India but from the funds of the respective institutions,” Nachane said. He refused to divulge the name of the judge.

Convenor, UFBU, C H Venkatachalam, told FC that, “Negotiations are on between IBA and the unions. Moreover, we are not drawing any funds from the consolidated fund of India.Therefore, the model code of conduct should not impact the talks,” he said.

Venkatachalam said that a formal clarification will be sought from the election commission, if need be.
The talks will impact the monthly wages of nearly 7,50,000 employees of public sector banks and 1,14,000 LIC employees including officers.

The LIC unions are also striking a hard bargain with the management. “The management’s offer has been for a 12 per cent increase in wages. We would want at least 20 per cent hike,” B S Rawat, joint secretary, AILICEF, said.

Source : Financial Chronicle.