Recompute 7th CPC Minimum Pay & Multiplication Factor - Anomaly in computation of Minimum Wage: Agenda Item for NAC Meeting

Recompute 7th CPC Minimum Pay & Multiplication Factor - Anomaly in computation of Minimum Wage: Agenda Item for NAC Meeting

Item No 1

Anomaly in computation of Minimum Wage
In Para 1.29 of Chapter 1 of the 7th CPC report, the larned Chairman of the Commission Justice Shri AK Mathur has approvingly quoted the following observation their Lordship in the Supreme Court in the case of Bhupendranath Hazarika and Another Vs. State of Assam (SC 2013 (2) Sec.516)

"........ It should always be borne in mind that legitimate aspirations of the employees are not guillotined and a situation is not created where hopes end in despair. Hope for everyone is gloriously precious and that a model employer should not convert it to be deceitful and treacherous by playing a game of chess with their seniority. A sense of calm sensibility and concerned sincerity should be reflected in every step. An atmosphere of trust has to prevail and when the employees are absolutely sure that their trust shall not be betrayed and they shall be treated with dignified fairness then only the concept of good governance can be concretized. We say no more."

Naturally the recommendations of the 7th CPC ought to have been in consonance with the spirit of the observations made in Para 1.29, While determining the Minimum Pay (Chapter 4.2). The Commission is on record to state that it shall abide by the formula of Dr WR Aykroyd as amended by Supreme Court in the case of Workmen represented by Secretary Vs. Management of Reptakos Brett and Co. Ltd and Anr. on 31st October, 1991 (Equivalent citations: 1992 AIR 504, 1991 SCR Supl. (2) 129). In its submissions made to the Govt, the Staff Side had pointed out the errors and omissions crept in the computation of Minimum wage and its consequential impact. The Commission’s recommendations in this regard was clearly in violation of what has been stated in para 1.29 (quoted above). We annex for ready reference the extracts from our own submissions pertaining to this issue.

Our submission to Cabinet Secretary on 7th CPC:

"We are not in agreement with the methodology adopted by the 7th CPC in computing the minimum WAGE. We give hereunder briefly the reasons thereof.

The retail prices of the commodities quoted by the Labour bureau is irrational, imaginary and even absurd in respect of certain articles at certain places. The Staff Side had objected to the adoption of those rates in its meeting with the Commission on 9th June, 2015.

The adoption of 12 monthly average of the retail prices is contrary to Dr. Aykroyd formula. Same is the case with the reduction effected by the Commission on housing and social obligation factors. The house rent allowance is not a full compensation of the expenditure incurred by an employee for obtaining an accommodation. Therefore, no reduction on that count in arriving at the minimum wage is permissible. We may cite the minimum wage computation made by the 3rd CPC in this regard. The employees were in receipt of HRA even at that time. But still the 3rd CPC, and rightly so, adopted the 7.5% as the factor for housing. In respect of the addition to be made for children education and social obligation as per the Supreme Court judgement, (25%) the Commission has reduced the percentage to 15% on the specious plea that the employees are separately given children education allowance. The Children education allowance is not a full reimbursement of the expenses one has to incur. After the liberalization of the Education Sector where private parties were allowed to set up universities and colleges, the expenses for education had increased heavily. No concession or allowance is granted to the employees for educating the children beyond the higher secondary levels. The earlier Pay Commission has only tried to compensate a little in the increasing cost of education and that too at the primary level, since even the Governmental institutions had started charging abnormal tuition and other fees.

The website maintained for the Agriculture Ministry depicts the retail prices of commodities which go into the basket of minimum wage computation. Even though the rates quoted by them vary from the real retail prices in the market, it provides a different picture. If one is to take the rates quoted by them for different cities and make an all India average of the prices as on 1.7.2015, it will work out to Rs. 10810. It will result in the computation of the minimum wage of Rs. 19880. Adding 25% for arriving at the MTS scale, it will rise to Rs. 24850. To convert the same as on 1.1.2016, 3% will be added as suggested by the 7th CPC. The final computation will be Rs. 25,596, when rounded off shall be Rs. 26000.

The Andhra Pradesh State Pay Commission in its report has taken the commodity prices at Rs. 9830,- as on 1.7.2013 which works out to a minimum wage of Rs. 18080. The wage of MTS will then be Rs. 22600 as on 1.7.2013. The Corresponding figure for 1.1.2016 shall be Rs. 26758, rounded off to Rs. 27000.
The Staff side had computed the minimum wage as on 1.1.2014 at Rs. 26,000, taking the commodity price at Rs. 11344. The rates were taken on the basis of the actual retail prices in the market as on 1.1.2014 (average prices of 8 Cities in the country) substantiated by the documentary evidence of Cash bill obtained from the concerned vendors. As on 1.12016, the minimum wage work out to Rs. 29339, rounded off to Rs. 30,000.

The 5th CPC adopted the rate of growth in the economy (as reflected in the increase in the per capita net national produce at factor cost) over a period of ten years to arrive at the increase required to be made to arrive at the minimum wage. The per capita NNP at factor cost registered an increase of 65.28% over a period of ten years in 2013-14. If we apply the same percentage to the emoluments (Pay +DA) as on 1.1.2016 (assuming that DA will be 125% as on that date), the minimum wage as on 1.1.2016 for an MTS will have to be Rs. 26030, rounded off to Rs. 27000.

In para 4.2.9 of the report, the Commission has given a table depicting the percentage increase provided by the successive Pay Commissions, according to which the 2nd CPC had made a paltry increase of 14.2%. The 3rd CPC gave a rise of 20.6, 4th 27.6, 5th 31.0 and 6th CPC 54%. While the per centage increase had been in ascending order all along, the 7th CPC has sought to reverse that trend ostensibly for reasons unknown. It was the meager increase of 14% provided for by the 2nd CPC that triggered the volatile situation in the civil service and led to all India strike encompassing all employees which lasted for 5 days in 1960.

In the case of Bank, Insurance and many other Public Sector Undertakings wage revision takes place once in 5 years. In the recently concluded agreement, Bank employees were provided more than 15% increase.
After the implementation of the Pay Commission Report the AP State Employees have been given a wage structure based on a minimum wage for above the level of Central Government employees. In their case also wage revision does take place once in 5 years.

It could be seen from the above that the computation of minimum wage by the 7 CPC is prima facie wrong and computed on untenable premises and incorrect data. The minimum wage therefore requires re-computation and revision. Once the minimum wage gets revised, the fitment formula, the multiplication factor applied for determining the pay levels and the pay matrix itself will have to be consequently revised."

It could be seen from the above extract that the Minimum Wage as on 1.1.2016 could not have been computed at less than Rs 26000/- and consequently the multiplication factor ought to have been at 3.714. It is, therefore, demanded that the Minimum Wage and multiplication factor may be recomputed and Pay Level and Pay matrix changed in accordance with the revised minimum wage.

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7th CPC Revision of Minimum Wage : JCM seeks Finance Minister intervention

7th CPC Revision of Minimum Wage : JCM seeks Finance Minister intervention

National Council (Staff Side)
Joint Consultative Machinery for Central Government Employees
13-C, Ferozshah Road, New Delhi 110001
E-mail : nc.jcm.np@gmail.com

Shiva Gopal Mishra
Secretary

No.NC/JCM/2016 Dated: October 26, 2016

Hon'ble Minister for Finance,
Ministry of Finance,
(Government of India),
New Delhi

Respected Sir,

We solicit your kind reference to the discussions; the representatives of the Staff Side JCM had with you on 30th June 2016 in the wake of impending strike action that was to commence from 11th July 2016. Hon'ble Home Minister, Shri Rajnath Singh, your goodself, Hon'ble Minister for Railways, Shri Suresh Prabhakar Prabhu and Hon'ble MoSR, Shri Manoj Sinha, on having detailed deliberations with the Staff Side, had appreciated that, the Central Government employees were not generally happy with the decision taken by the Union Cabinet on 29th June 2016, while accepting the recommendations of the 7th CPC, particularly in the matter of Minimum Wage and Fitment Formula. After detailed discussions it was agreed by your goodself and other Hon'ble Ministers present in the meeting that, the government would address the grievances of the employees, whereupon the NJCA had decided to defer the "Indefinite Strike". Accordingly, a committee was set-up to consider the demand of Revision of Minimum Wage and Fitment Formula with a mandate to finalize its report within four months.

We (Staff Side) interacted with the said committee, headed by Shri P.K. Das, Addl. Secretary (Expenditure), on 24.10.2016. It would be quite appropriate to bring to your kind notice that, we have felt, during the course of meeting, that, the proceedings of the committee are extremely disappointing and are left with the impression that, the committee is dilly-dallying the issue.

We are, therefore, left with no option, but to address this communication with the fervent hope that, your goodself will direct the said committee to interact with the Staff Side in a fruitful manner and arrive at a mutually agreeable proposal on the issues of Minimum Wage and Fitment Formula.

We have full trust and believe that, the government would honour the decision taken in the meeting held on 30.06.2016 in your benign presence, and suitable direction will be given to the committee to complete the assigned task within the stipulated timeframe in a satisfactory manner.

It would be the most unfortunate development, we regret to state, if we are constrained to tread the path of struggle once again in the event of the committee not coming up with a satisfactory settlement.

With Kind Regards!

Yours faithfully

(Shiva Gopal Mishra)

Source :ncjcmstaffside.com

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7th CPC Minimum Wage and Multiplying Factor, Find a way out for resolving both the issues - Official Side

7th CPC Minimum Wage and Multiplying Factor - Find a way out for resolving both the issues – Official Side

Meeting held on 7th CPC issues under the chairmanship of Addl: Secretary (Exp), Department of Expenditure, Ministry of Finance - reg.

 NFIR
National Federation of Indian Railways

No.NFIR/7th CPC(imp)/2016 (MoF)

Dated: 24/10/2016

The General Secretaries of
Affiliated Unions of NFIR

Dear brother,

Sub: Meeting held on 7th CPC issues under the chairmanship of Addl: Secretary (Exp), Department of Expenditure, Ministry of Finance - reg.

A meeting was held between the Addl Secretary (Exp), Ministry of Finance, Government of India and Staff Side, NC/JCM (Standing Committee Members) at Room No.72, North Block, New Delhi, this day 24/10/2016. In the said meeting, discussions were held on “Revision of Minimum Wage and Multiplying Factor”. The JCM Standing Committee members have explained elaborately and urged for quick action for the revision of Minimum Wage and Multiplying Factor.

The Official Side stated that attempts will be made to find a way out for resolving both the issues. On behalf of NFIR, the meeting was attended by JCM (Staff Side) leader M.Raghavaiah, Standing Committee members S/Shri Guman Singh, R.P.Bhatnagar and K.S.Murty.

Yours frateranlly,
sd/-
(Dr.M.Raghavaiah)
General Secretary

Source: NFIR

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Charter of Demands Especially increase in minimum wage and fitment factor

Charter of Demands Especially increase in minimum wage and fitment factor

1. Settle the demands raised by NJCA regarding modifications of 7th CPC recommendations as submitted in the memorandum to Cabinet Secretary on 10th December 2015. (See Annexure-I). Honour the assurance given by the Group of Ministers to NJCA on 30th June 2016 and 6th July 2016, especially increase in minimum wage and fitment factor. Grant revised HRA at the existing percentage itself i.e. 30%, 20% and 10%. Accept the proposal of the staff side regarding Transport Allowance. Settle all anomalies arising out of implementation of 7th CPC recommendations, in a time bound manner.

2. Implement option-I recommended by 7th CPC and accepted by the Government regarding parity in pension of pre-2016 pensioners, without any further delay. Settle the pension related issues raised by NJCA against item 13 of its memorandum submitted to Cabinet Secretary on 10th December 2015. (See Annexure-I).

3. Scrap PFRDA Act and New Pension System (NPS) and grant pension and Family Pension to all Central Government employees recruited after 01.01.2004, under CCS (Pension) Rules 1972.

4. Treat Gramin Dak Sewaks of Postal department as Civil Servants, and extend all benefits like pay, pension, allowances etc. of departmental employees to GDS. Enhance bonus calculation ceiling of GDS also to 7000 from 01.04.2014.

5. Regularise all casual, contract, part-time, contingent and Daily rated mazdoors and grant equal pay and other benefits. Revise the wages as per 7th CPC minimum pay.

6. No Downsizing, Privatisation, outsourcing and contractorisation of Government functions.

7. Withdraw the arbitrary decision of the Government to enhance the bench mark for performance appraisal for promotion and financial upgradations under MACP from “GOOD” to VERY GOOD” and also decision to withhold annual increments in the case of those employees who are not able to meet the bench march either for MACP or for regular promotion within the first 20 years of service. Grant MACP pay fixation benefits on promotional hierarchy and not on pay-matrix hierarchy. Personnel promoted on the basis of examination should be treated as fresh entrants to the cadre for grant of MACP.

8. Withdraw the draconian FR 56 (J) and Rule 48 of CCs (Pension) Rules 1972 which is being misused as a short cut as purity measure to punish and victimize the employees.

9. Fill up all vacant posts including promotional posts in a time bound manner. Lift ban on creation of posts. Undertake cadre Review to access the requirement of employees and their cadre prospects. Modify recruitment rules of Group-‘C’ cadre and make recruitment on Reginal basis.

10. Remove 5% ceiling on compassionate appointments and grant appointment in all deserving cases.

11. Grant five promotions in the service carreer to all Central Govt. employees.

12. Abolish and upgrade all Lower Division Clerks to Upper Division Clerks.

13. Ensure parity in pay for all stenographers, Assistants, Ministerial Staff in subordinate offices and in all organized Accounts cadres with Central Secretariat staff by upgrading their pay scales. Grant pay scale of Drivers in Loksabha Secretariat to Drivers working in all other Central Government Departments.

14. Reject the stipulation of 7th CPC to reduce the salary to 80% for the second year of Child Care leave and retain the existing provision.

15. Introduce Productivity Linked bonus in all department and continue the existing bi-lateral agreement on PLB wherever it exists.

16. Ensure cashless medical treatment to all Central Government employees & Pensioners in all recognized Government and Private hospitals.

17. Revision of Overtime Allowance (OTA) and Night Duty Allowance (NDA) w.e.f 01.01.2016 based on 7th CPC pay scale.

18. Revision of wages of Central Government employees in every five years.

19. Revive JCM functioning at all levels. Grant recognition to the unions/Associations under CCS (RSA) Rules 1993 within a time frame to facilitate effective JCM functioning.

Source: http://confederationhq.blogspot.in

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7th Pay Commission – CG Employees Step up Pressure – At the very start of the meeting, representatives of the unions expressed their anguish for non-formation of High Level Committee

7th Pay Commission – CG Employees Step up Pressure – At the very start of the meeting, representatives of the unions expressed their anguish for ‘non-formation of High Level Committee’.

7th pay commission To obtain the views of the National Council (Staff Side) (JCM) on the recommendations of the 7th pay commission relating to Allowances, the second meeting of the Committee on Allowances was held on Thursday under the chairmanship of Secretary, Finance (Expenditure), Government of India, with the National Council (Staff Side) JCM.

At the very start of the meeting, representatives of the unions expressed their anguish for ‘non-formation of High Level Committee’. According to them it was agreed to in July by the Group of Ministers (Government of India) for settling the issue of Minimum Wage and Multiplying Factor. The unions want the ‘minimum wage’ for Central employees to be fixed at Rs. 26,000 as opposed to Rs. 18,000 recommended by the 7th Pay Commission (CPC).

“The Secretary, Finance (Expenditure) told that, the committee constituted under the chairmanship of Addl. Secretary (Exp.) with J.S. (Pers.), JS (Estt.) and JS(Imp.) as Members has been made only for this purpose. Let us believe that, after the meeting, report of the said committee would be sent to the Government of India for its acceptance’’, Mr. Mishra, secretary (Staff Side) of the National Council/Joint Consultative Machinary, noted.

At the meeting, the unions made a strong case for implementation of the allowances to be decided by the Committee from January 1, 2016.

Besides, they wanted that House Rent Allowance be fixed at range 10 to 30 per cent of the basic linked to the classification of the town of posting, children education allowance of Rs. 3,000 and hostel subsidy of Rs.10,000. All these allowances should be tax exempt.

Staff Side demanded inclusion of post-graduate and professional courses in children education allowance. The issue of special duty allowance was also raised for Northeastern region.

They also demanded, ‘Fixed Medical Allowance’ of Rs. 2,000 with Dearness Allowance Indexation, review of overtime allowance, small family allowance and dress allowance.

“Various Departmental Allowances, which have been abolished, should be allowed to continue, like Breakdown Allowance in the Railways and Fixed Conveyance Allowance to Postal Department employees”, Mr. Mishra noted.

Separately, M. Ragaviah, National Federation of Indian Railwaymen - NFIR (an affiliate of INTUC) said, “While there has been no commitment from the Chairman and Official Side of the Committee, the Finance Secretary however stated that further meetings will be held and in the meantime the JCM (Staff Side) may list out common issues and send the same to the Joint Secretary (Imp) and equally Departmental specified issues be sent through the respective Administrative Ministries for examination”.

Source: The Hindu

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7th CPC REPORT & NDA GOVERNMENT

7th CPC REPORT & NDA GOVERNMENT

M. Krishnan, Secretary General,
Confederation of C. G. Employees & Workers

Report of the 7th Central Pay Commission (CPC) headed by Retired Supreme Court Justice, Ashok Kumar Mathur was submitted to Government on 19th November 2015 after 21 months. The Union Cabinet announced its decision to implement the recommendations on 29th June 2016. Through the press release circulated to media and the statement of Finance Minister, the Government made a calculated move to create an impression among the public that the Modi Government is magnanimous enough to extend big bonanza to the Central Government employees. Eventhough, immediately after submission of the 7th CPC report, the Joint Council of Action of Central Government Employees (NJCA) representing Railways, Defence and Confederation including Postal had submitted a memorandum to Government demanding modifications of the retrograde recommendations of the 7th CPC, the Government while announcing its decision, rejected all the demands raised by the staff side.

The 7th CPC recommended only Rs.18000/- as minimum pay by arbitrarily modifying and manipulating Dr. Aykroyd’s Need based minimum wage formula on untenable premises and incorrect data. The main demand of the NJCA is to re-compute the minimum wage on the basis of actual commodity prices as on 01.07.2015 and factor Dr. Aykroyd formula stipulated percentage for housing, social obligations and children’s education etc. and to revise the fitment formula and all pay scales on the basis of the so determined minimum wage. The methodology adopted by 7th CPC is irrational, imaginary and even absurd.

The Government’s claim that big increase is given to the employees is totally false. In para 4.2.9 of the report, the 7th CPC has given a table depicting the percentage of increase provided by the successive pay commissions appointed after independence. According to the table, the 2nd CPC has made a paltry increase of 14.2.% (1960), the 3rd CPC gave a rise of 20.6% (1973), the 4th CPC 27.6% (1986), the 5th CPC 31% (1996) and 6th CPC 54% (2006) whereas the average increase granted by 7th CPC is only 14.29% (2016), while the percentage increase had been in ascending order all along, the 7th CPC has sought to reverse that trend. The megre increase recommended and accepted by the Government without any change is the worst ever any pay commission has recommended since 1960. In 1960 five days historic strike of entire Central Government employees took lace demanding modifications of 2nd CPC recommendations.

Another claim of the Government is that it has accepted the recommendations of the 7th CPC to increase the existing salary by 2.57 times !!!. This is a totally misleading propaganda. The existing basic pay of a lowest level employee of the Central Government called Multi-Tasking staff (MTS) is 7000 plus 125% Dearness Allowance as on 01.01.2016. Thus the total salary as on 1st January 2016 is 7000 + 8750 DA = 15750. The Minimum pay recommended by 7th CPC is 18000 i.e; the actual increase in salary is Rs. 2250/- only at the lowest level. The fitment factor of 2.57 is worked out excluding the 125% DA an employee is getting at present. As the next wage revision takes place only after ten years in 2026, the above increase of 2250/- in the salary is megre.

In the past, every time, either before or immediately after the appointment of pay commissions, the employees are granted DA merger, Last time, before appointment of 6th CPC, Government has granted merger of 50% DA in 2004 and the merged DA is treated as Pay for all purposes. This time no DA merger is granted. Suppose, as in the past, the Government has accepted the demand for merger of 50% DA as on 01.01.2011 when DA crossed 50%, the total salary of an employee at the lowest level as on 01.01.2016 will become Rs.18395/- (7000 + 50% DA 3500 = 10500 + remaining 75% DA as on 01.01.2016 Rs.7875 = 18395). Thus it can be seen that even if no pay commission is appointed by Government, simply by granting DA merger alone the lowest level salary will become more than 18000/- which is recommended by 7th CPC after 21 months study and spending crores of rupees for its functioning.

The Government’s press release further claim that the ratio between lowest and highest salary (compression ratio) is 1:3.12. The highest level employees are Cabinet Secretary and Secretaries of various departments. The recommended salary of the Cabinet Secretary is 2,50000. Government deliberately avoided comparison between salary of lowest employee and highest level employee, instead compared with middle level Class-I officer only. Actual ratio between the lowest and highest salary come to 1:14 (18000:2,50000). No other pay commission has recommended such a huge margin.

Other retrograde recommendations of the 7th CPC are as follows:

1. House Rent Allowance (HRA) rate reduced from 30%, 20% and 10% to 24%, 16% and 8%
2. 52 existing allowances are to be abolished.
3. All interest-free advances including Festival advance, are to be abolished. Only interest bearing advances to be retained.
4. Salary for the second year of Child care leave granted to women employees should be reduced to 80%.
5. For Three Time bound promotions (Assured Carreer Progression) passing examination and other conditions made mandatory.
6. New Pension Scheme (NPS) shall continue, recommended only some cosmetic changes.
7. Contractorisation and casual labour System shall be continued.
8. Outsourcing of Government functions to continue.
9. Employment of retired personnel to be legalized and panel of experienced retired personnel should be kept ready.
10. Filling up of vacancies – commission pointed out that there are six lakhs unfilled vacancies in Central Government services, but no recommendations for filling up the vacancies in a time bound manner by special recruitment.
11. Regularisation of Gramin Dak Sevaks of Postal department – rejected.
12. Increase in minimum pension percentage, Fixed medical Allowance to Pensioners and increment rate – rejected.

Inspite of several round of country wide agitational programmes conducted by NJCA including massive Parliament March, the NDA Government refused to negotiate the demands with the staff side, but declared unilateral implementation of the recommendations without any modifications. The resentment, anger and protest of the entire Central Government employees increased day-by-day and the NJCA decided to go ahead with indefinite strike from 11th July 2016 and preperations and campaigning for making the strike a thundering success went on in full swing. Modi Government understood that if it still refuse to discuss with the NJCA then from 11th July 6 AM onwards the entire Central Government establishments including Railways, Defence, Postal and other departments. will come to standstill marking the commencement of the biggest strike action of the Central Government employees.

It is in this background the Hon’ble Prime Minister directed three Cabinet Ministers including Home Minister Shri Rajnath Singh, Finance Minister Shri Arun Jaitly and Railway Minister Shri. Suresh Prabhu to hold discussion with the NJCA leaders on 30th January 2016. Major demands in the Charter of demands were discussed with particular reference to Improvement in Minimum wage and fitment formula. Issues relating to parity in pension was also discussed. Finally the Ministers assured that a high level committee will be appointed to consider the issues raised by the NJCA.

As no written minutes or communications is forthcoming from the Government regarding the 30th June discussion and assurances, the NJCA decided to go ahead with the strike. Country wide demonstrations were held daily in front of all offices and at all important centres. On 6th July 2016 when the NJCA meeting was in progress, Hon’ble Home Minister Shri Rajnath Singh again invited the NCA Leaers for discussion. The Minister reiterated the earlier assurances and told that Finance Minister will issue a press statement making the Government stand clear on the demands.

Accordingly, the Government issued a press statement on 6th July 2016 in which it is stated that – “The Ministers assured the Union leaders that the issues raised by them would be considered by a High Level Committee.”

Thus, the unite struggle of the entire Central Government Employees compelled the unwilling NDA Government to accept the reality that modification in the 7th CPC recommendations is a must and before arriving at a final conclusion the staff side should be given a fair chance to present and discuss the case with the Government. It was assured that the proposed High Level Committee to be appointed by the Government shall complete its task within a time frame.

Advancement in the wages and service conditions of Central Government Employees can be achieved only through the united struggle of all Central Government employees for which the unity built up under the banner of NJCA is to be maintained and strengthened. Further the neo-liberal policy offensives of the NDA Government in the Central Government Employees Sector including privatisation, outsourcing, downsizing, contractorisation, corporatization, winding up of departments, New Pension Scheme etc. can only be resisted and reverted by building up united movement of the entire employees. Eventhough the strike is deferred, the Central Government employees shall continue its united struggle against the anti-people and anti-labour policies of the NDA Government. We should self-critically analyze the strength and weakness of the NJCA and shall arrive at proper conclusion for taking corrective measures, if necessary, and also for further unity and advancement. The final outcome of the united struggle is, no doubt, one step forward.

Source : http://confederationhq.blogspot.in/

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NFIR Press Note : Expressed serious disappointment over the Government’s decision on 7th Pay Commission minimum wage

NFIR Press Note : Expressed serious disappointment over the Government’s decision on 7th Pay Commission minimum wage

The National Federation of Indian Railwaymen (NFIR)’s General Secretary expressed serious disappointment and unhappiness over the Government’s decision on minimum wage. Although there is justification of upward revision of minimum wage, the Government has not done justice to the employees. Similarly, the multiplier factor has not adequately been revised, Dr. Raghavaiah General Secretary NFIR said.

Dr. Raghavaiah further said that as already decided by the NJCA, Railway employees will go on strike from 6:00 AM of 11th July 2016.

Source : NFIR

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NFIR : 7th CPC Recommendation totally disappointing

NFIR : 7th CPC Recommendation totally disappointing.

NFIR
NATIONAL FEDERATION OF INDIAN RAILWAYMEN
3,Chelmsford Road, New Delhi – 110 055
Affiliated to:
Indian National Trade Union Congress (INTUC)
International Transport Workers Federation (ITF)

No.IV/NJCA(N)/2014/Part II

Dated: 29-06-2016

The General Secretaries of
Affiliated Unions of NFIR

Brother,

Sub: 7th CPC Recommendations – reg.

Cabinet’s decision on minimum wage is totally disappointing as no improvement has been made. Equally in multiplier factor, there is no improvement.

As already decided, the JCM constituent organizations will be compelled to go on strike.

NJCA will meet very soon (either today or tomorrow) to take stock of the situation and issue directions.

Yours fraternally,

sd/-
(Dr.M.Raghavaiah)
General Secretary

Source: NFIR

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7th Pay Commission Latest News – Minimum wage and Fitment formula

7th Pay Commission Latest News – Minimum wage and Fitment formula

The Staff side had demand of minimum wage of Rs 26000/- & fitment formula of 3.71 against 7th CPC recommendation of Rs 18000/- & fitment formula of 2.57.

7th Pay Commission Latest News – Confederation of Central Government Employees, Karnataka Branch analyses how 7th CPC minimum wage is fixed and why employees are on the losing side.

7th Pay Commission has adopted a formula for fixing the minimum wage and fitment formula in its recommendations. As per this recommendations Basic Pay in Central Government Service has been fixed as Rs. 18000 while highest pay has been fixed as Rs. 2,50,000. As far as existing employees are concerned, the a uniform multiplication factor of 2.57 has been arrived at which has to be multiplied with the existing basic pay of an employee to get the revised basic pay. However, Confederation of Central Government Employees reports that the prices for various essential commodities taken by the 7th Commission for arriving at minimum wage and fitment formula are on the lower side and consequently actual economic inflation in the past 10 years has not been factored in to the recommended 7th CPC pay and allowances.

The following is the analysis of Confederation of Central Government Employees and Workers, Karnataka Branch with regard to Minimum Wage and Fitment formula adopted by 7th Pay Commission.


Minimum wage and Fitment formula
Comrades,
The Staff side had demand of minimum wage of Rs 26000/- & fitment formula of 3.71. Against this the 7th CPC had recommended minimum wage of Rs 18000/- & fitment formula of 2.57. The 7th CPC recommendations has provided only at 14% wage hike at Group “C” level it is only ranging from Rs 2240/- to Rs 3500/- increase per month, and at Group “B” level ranging from Rs 4000/- to Rs 6500/- increase per month. After deductions & income tax the net increase will be just from Rs 500/- to Rs 3000/- only .
This increase is lowest by any pay commission, hence vast changes are required as the prices of essential commodities have gone up and also the inflation rate has gone up.

There are various reports on 7th Central Pay commission on the media reports on minimum wage of Rs 21000/- & fitment formula of 3.00, (which is at 34% wage hike against the 14% wage hike recommended by the 7thCPC).

The Empowered committee of Secretaries have not finalised any such minimum wage and fitment formula, the meeting is scheduled on 11th June 2016.

Please go through minimum wage as on 1/1/2016 using the prices as on 1/7/2015 of the Director of Economic & statics , Ministry of Agriculture and Farmers Welfare, Government of India, New Delhi.
Sources website : http://rpms.dacnet.nic.in/QueryReport.aspx

Minimum Wage as per Government  Prices  as on 1/7/2015
Rice  fine/Wheat	42.75	32.45	1387.2375
Dal / Pulses	7.2	112.96	813.20
Raw Vegetables	9	112.96	1016.64
Green Vegetables*	11.25	26.78	301.275
Other Vegetables*	6.75	50	337.5
Fruits	10.8	45	486
Milk Dairy	18	97.92	1762.56
Sugar	5	41.85	209.25
Edible Oil	3.6	142.42	512.712
Fish	2.5	231.67	579.175
Meat Mutton	5	401.95	2009.75
Egg	90	4.68	421.2
Detergents*	1	250	250
Clothes	5.5	279.34	1536.37
Total			10809.6695
Housing @ 7.5%			810.65
Miscellaneous @ 20%			2161.93
Total			13782.2495
Additional @ 25%			3445
			17227.2495
Grand Total –
Minimum pay for unskilled worker in the erstwhile Group D			17227
Additional @ 25% for Group “C”			4306.75
Minimum pay for skilled worker in the erstwhile Group “C”			21533.75
Rounded off to Rs 22000/-
Add 6%  for DA = 125%  difference			646
Actual Minimum wage as on 1/1/2016			22179.75

We should add 10% for difference between retail price and Government rates.  It is clear that we should get minimum wage of Rs 24500 and fitment formula is 24500/ 7000 is 3.40 that is 50% wage hike .
The 7th CPC had provided wrong prices for example

Rice/Wheat Rs 25.93 per kg Dal (Toor/Urad/Moong) Rs 97.84 per kg.

If correct prices were adopted by the 7th CPC and correct methodology is adopted we would have got better minimum wage and fitment formula,

Comrades it is the time to struggle, we should educate the members and prepare for struggle, so that we should get at least 50 % wage hike without allowances, as allowances are not taken into pension benefit.
Only struggle will get us benefit. Please don’t believe on rumours. Now it is now or never.  Serve strike notice on 9th June 2016.

Comradely yours

(P.S.Prasad)

General Secretary

Source : http://karnatakacoc.blogspot.in/

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7th Pay commission report on determination of minimum pay

7th Pay commission report on determination of minimum pay

7th CPC has fixed the Minimum Pay at Rs.18000/- as per Indian Labor Conference recommendations considering 3 units of a family of 2 + 2. The amount was arrived by the prices sourced from Labor Bureau, Shimla. 7th CPC claims that this amount is more than twice than that of a private sector employee.

Minimum Wage Fixed by 7th Pay Commission at Rs.18000/- and along with allowance proposed, total salary in the lowest cadre would be around Rs,22500

7th Pay Commission has fixed the minimum wages for the lowest cadre employee is Rs.18000 w.e.f 01.01.2016.

Determination of Minimum Pay

The first step in Wage Revision is to fix the  minimum wage that is required to be paid to the lowest ranked Staff to meet the expenditure for himself and his family in a dignified manner.

Minimum Pay Estimated by the V and VI CPC

V CPC adopted the ‘Constant Relative Income Approach’ which means the real minimum pay should grow in line with the cost of living and added to it the DA of Rs.1,110 to arrive at the ‘price protected’ minimum pay of Rs.1,860 as on 01.01.1996 and finally increased to Rs.2550 at the implementation stage.
To estimate the minimum pay in the government, the VI CPC used the norms set by the 15th Indian Labor Conference (ILC) in 1957 to determine the need-based minimum wage for a single industrial worker. The norms set by the ILC are as below:

i.      A need-based minimum wage for a single worker 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;

ii.      The food requirement were derived from the recommendations of Dr. Wallace Aykroyd, the noted nutritionist, which 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. The 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;

iii.       The clothing requirements should be based on per capita consumption of 18 yards per annum, which gives 72 yards per annum (5.5 meters per month) for the average worker’s family.

iv.      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 percent of the total minimum wage;

v.      Fuel, lighting and other items of expenditure should constitute an additional 20 percent of the total minimum wage.

As per Supreme Court Directives the VI CPC considered additional components of expenditure towards Children’s education, medical treatment, recreation, festivals and ceremonies which this amount at 25 percent of the total minimum wage calculated from the first five components.  Since Government is providing medical facilities to all its employees the VI CPC arrived at a minimum wage of Rs.5,479. This was enhanced by about 22 percent to Rs.6,660, which was recommended as the minimum pay in the government. The enhancement quantified the skill factor that Group D staff would acquire through training, upon their merger into Group `C’. Ultimately, at the implementation stage, the minimum pay was fixed at Rs.7,000 per month on 01.01.2006.


Demand made by JCM-Staff Side to the Commission

In  its  representation  the JCM-Staff Side has  submitted that the Commission must determine a ‘need-based minimum pay’.  In addition they have also sought the inclusion of a quantified skill factor on the lines of the VI CPC’s approach for addressing the merger of the Group D staff into Group `C’.  They insisted on seven components (five ILS components + additional 25 percent provisioning + skill factor).
JCM-Staff Side has reported that the minimum pay should be Rs.26,000 per month, as on 01.01.2014, the date from which it wants the Commission’s recommendations to be implemented.

Approach of the Commission

VI CPC adopted the 15th ILC norms to arrive at a base figure, to which was added additional 25 percent for various additional items plus the skill factor. The Commission has thus noted that directly or indirectly, the ILC norms have always been at the core of the minimum pay calculations made by the previous Pay Commissions. The Commission is also of the view that the ILC norms, along with other supplements (the entire set of seven components), are the best approach to estimating the minimum pay as it is a need-based wage calculation that directly costs the requirements, normatively prescribed to ensure a healthy and a dignified standard of living.

The 7th Pay Commission has estimated the minimum pay (the calculations for which have been tabulated below) through the following steps:

Step 1:   The food, clothing and  detergent  products  listed  and  their respective quantities specified by the 15th ILC have been adopted. These quantities indicate the monthly consumption of the listed products by a family comprising three consumption units. [For e.g. for the product ‘Dal’ the quantity specified for daily consumption is 80 grams per consumption unit per day. The monthly consumption of Dal by a consumption unit thus works out to 2.4 kg (80 x 30). Accordingly the monthly consumption of Dal by a family comprising 3 units is 7.2 kgs (2.4 x 3).]

Step 2:   The quantities have been multiplied by their respective product prices to arrive at product wise cost. The price of an item is the average of its prices prevailing in each month from July, 2014-June, 2015
The prices of all items have been sourced from Labor Bureau, Shimla. These prices are used in the calculation of the CPI (IW) and subsequently the calculation of Dearness Allowance. In the current exercise the prices of all items are for the period July 2014-June 2015 and have been used in the calculation of DA at 119 percent operative from 01.07.2015.

Step 3:   The cost of food, clothing and detergent products obtained from Step 2 has been divided by 0.8 to arrive at a total, of which 20 percent provides for fuel and lighting expenses.

Step 4:   The cost estimated from Step 3 is divided by 0.85 to arrive at a total, of which 15 percent is towards recreation, ceremonies and festivities. The prescribed provision of  25 percent to cover education, recreation, ceremonies, festivals and medical expenses has been moderated to 15 percent because expenses on educational and medical necessities are being separately provided for through relevant allowances and facilities and thus need not be provided here. This partially addresses the first of the two components outside the 15th ILC norms.

Step 5:   The cost estimated from Step 4 is increased by 25 percent to account for the skill factor, following the reasoning that there is no unskilled staff in the government after the merger of Group D staff in Group `C’. This addresses the second of the two components outside the 15th ILC norms.

Step 6:   The cost estimated from Step 5 is divided by 0.97 to arrive at a total, of which 3 percent provides for housing expenses. This is done in view of the observation that license fees for government accommodation is about 3 percent of the total pay. This addresses the fourth component stated under para 3 but partially so, as the 15th ILC norms had fixed the housing provision at 7.5 percent.

Step 7:   The cost estimated from Step 6 is as on 1 July, 2015 when the DA was 119 percent. The DA is assumed to be 125 percent as on 1 January, 2016, the day from which the Commission expects its recommendations to be implemented by the government. Accordingly the cost estimated from Step 6 has been increased by 3 percent (2.25/2.19 = 1.027 or nearly 3%).

The cost estimated from Step 7 is next rounded off to Rs.18,000, which is the minimum pay being recommended by the Commission, operative from 01.01.2016. This is 2.57 times the minimum pay of Rs.7,000 fixed by the government while implementing the VI CPC’s recommendations from 01.01.2006. Accordingly, basic pay at any level on 01.01.2016 (pay in the pay band + grade pay) would need to be multiplied by 2.57 to fix the pay of an employee in the new pay structure. Of this multiple, 2.25 provides for merging of basic pay with DA, assumed at 125 percent on 01.01.2016, while the balance is the real increase being recommended by the Commission. The real increase works out to 14.2 percent (2.57÷2.25 = 1.1429). The following table shows the real increase given by each CPC/Government over the previously set minimum pay:

(in percent)

II CPC	14.2
III CPC	20.6
IV CPC	27.6
V CPC	31.0
VI CPC	54.0
VII CPC	14.3

The real pay in government is protected by providing Dearness Allowance (DA), which is  that  percentage  of  pay  by  which  the  CPI  (IW)   increases  over  a  fixed  base  value.

Consequently the absolute amount of DA keeps on growing with every point increase in CPI (IW). On the other hand the real value of the industrial minimum wage is protected by providing Variable Dearness Allowance (VDA), which is a fixed amount of money given per point increase in CPI (IW) as notified by the Chief Labour Commissioner (central sphere) from time to time. Consequently, over a period of time, the minimum pay + DA in government becomes larger than the minimum wage + VDA in the private sector even though the basic minimum wage in both the sectors is calculated on the basis of the 15th  ILC norms. As on 01.01.2015 the minimum pay in government was Rs.14,910 whereas minimum wage for a skilled worker was in the range of Rs.9,000–Rs.11,000 per month.

Besides DA, government provides house rent, transport, location and function specific allowances besides Leave Travel Allowance (LTA) which, along with the basic pay, constitute the gross pay of a government employee. If one were to only take HRA at 30 percent of the basic pay and transport allowance at Rs.400+DA, as are admissible in A1/A class cities, together with educational allowances for two children at the rate of Rs.1,500 per month, the gross pay further increases to Rs.20,870 (20870 = 14910 +2100+860+3000) as on 01.01.2015. In addition government gives a host of other benefits that can be measured under the CTG (Cost to Government of an employee) concept. From these numbers it is clear that benefits given to the lowest ranked government employees, whether monetized or not, are significantly higher than the minimum basic pay and also much higher than the emoluments of skilled industrial workers.
On comparison with the private sector emoluments of a Govt General Helper, who is the lowest ranked employee in the government is Rs.22,579, more than two times the emoluments of a General Helper in the private sector organizations surveyed at Rs.8,000-Rs.9,500.

After considering all relevant factors the Commission is of the view that the minimum pay in government recommended at Rs.18,000 per month, w.e.f. 01.01.2016, is fair and reasonable and one which, along with other allowances and facilities, would ensure a decent standard of living for the lowest ranked employee in the Central Government.

Annexure to Chapter 4.2

Calculation of Minimum Pay as on 01.01.2016 by the Commission
		Per dayPCU	Unit	Per month3 PCU	Unit	Price/ Unit (Rs.)	Expenses(Rs.)
1.	Rice/Wheat	475	gm	42.75	kg	25.93	1108.30
2.	Dal (Toor/Urad/Moong)	80	gm	7.20	kg	97.84	704.44
3.	Raw Vegetables	100	gm	9.00	kg	58.48	526.28
4.	Green Vegetables	125	gm	11.25	kg	38.12	428.85
5.	Other Vegetables	75	gm	6.75	kg	32.80	221.42
6.	Fruits	120	gm	10.80	kg	64.16	692.93
7.	Milk	200	ml	18.00	litre	37.74	679.26
8.	Sugar/Jaggery	56	gm	5.04	kg	37.40	188.48
9.	Edible Oil	40	gm	3.60	kg	114.02	410.46
10.	Fish			2.50	kg	268.38	670.95
11.	Meat			5.00	kg	400.90	2004.51
12.	Egg			90.00	no.	4.27	383.98
13.	Detergents etc			Rs./month		291.31	291.31
14.	Clothing			5.50	meter	164.88	906.83
15.	Total (1-14)						9217.99
16.	Fuel, Electricity, Water Charges						2304.50
17.	Total-(15) divided by 0.8						11522.49
18.	Marriage, Recreation, Festivals, etc.						2033.38
19.	Total-(17) divided by 0.85						13555.87
20.	Provide for Skill by adding 25% to (19)						3388.97
21.	Sum (19+20)						16944.84
22.	Housing @						524.07
23.	Total-Divide no.21 by 0.97						17468.91
24.	Step up of 3% on No.23 as DA is projected at 125% on 01.01.2016						524.07
25.	Final Minimum Pay as on 01.01.2016 (23+24)						17992.98
26.	Rounding off						18000

Source: gconnect.in

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