7th Central Pay Commission’s Report -Serious resentment among employees against retrograde recommendations

7th Central Pay Commission’s Report -Serious resentment among employees against retrograde recommendations

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/NFIR/7th CPC/CORRES (MoF)

Dated: 23/11/2015

Shri Arun Jaitley,
Hon’ble Finance Minister,
134/North Block,
New Delhi

Respected Sir,

Sub: Seventh Central Pay Commission’s Report — serious resentment among employees against retrograde recommendations — reg.

There is widespread disappointment and resentment among all sections of Central Government employees against the retrograde recommendations of 7th Central Pay Commission.

In this connection, the National Federation of Indian Railwaymen (NFIR) places below core recommendations briefly which have generated unhappiness and anger among the employees in Railways as well as those in other departments of the Central Government:-

I. Minimum salary:

The Pay Commission has illogically recommended the minimum salary Rs.18,000/- p.m. We have explained our case through JCM Staff Side memorandum and also during the meetings with the Pay Commission that the minimum wage of the employees needs to be fixed at Rs. 26,000/- p.m. While the Pay Commission has briefly discussed our proposal in Chapter 4.2 of its report, ‘Determination of Minimum Pay’ in para 4.2.5 & 4.2.6 (at Page 61), it is sad to state that the 7th CPC has not only mutilated Dr.Aykroyd formula for determination of minimum wages but also changed Hon’ble Supreme Court’s decision wherein 25% to be added to the salary computed towards meeting the expenses on marriage, recreation, festivals, health, education etc. The housing component has also been reduced to 3%, with the aim to peg the minimum salary at Rs.18,000/- p.m.

II.Fitment formula:

(a) The multiplying factor 2.57 recommended by the 7th Central Pay Commission, vide para 5.1.27 (Page 77) of the Report, is totally illogical. Kind attention is invited to the pay increase granted pursuant to implementation of 5th & 6th Central Pay Commissions in the years 1996 & 2006 as placed below:-

Vth CPC –  40% hike with effect from 01/01/1996.
VIth CPC – over 32% hike (1.86 multiplying factor) w.e.f.01/01/2006

(b) The VIIth CPC has also admitted in its report vide Chapter 4.2, para 4.2.9 (Page 63) the percentage increase of pay in the past as below:-

VthCPC       31% w.e.f. 01/01/1996
VIth CPC    54% w.e.f. 01/01/2006
VIIth CPC   14.3% (since recommended)

The above facts, reveal that the VIIth Pay Commission has given perverse recommendation on “Minimum Wage” and “fitment formula”, which has led to all – round dissatisfaction among employees.

III. Abolition of Allowances:

The pay Commission has recommended for abolition of various allowances without looking into the background and justification on which those allowances were granted initially.

IV. House Rent Allowance:

Reduction of House Rent Allowance from the present ceiling of 30,20 & 10 to 24, 16 & 8 percent for Classes X,Y & Z cities is not proper. The house rents are very exorbitant in cities and small towns.

The Railway employees are extremely unhappy over non-grant of improved pay scales inspite of the fact that their duties are unique, complex and hazardous.

NFIR, therefore, requests the Government to take steps to modify the recommendations suitably for enhancing the minimum wage and fitment formula through discussions with staff side Federations and see that the atmosphere of confrontation is avoided. There are also many anomalies and aberrations in the report which are required to be dealt through discussions for rectification.
Yours Sincerely,

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

Signed Copy Click here

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Demand made by JCM-Staff Side to the Commission

4.2.5 In its representation the JCM-Staff Side has submitted that the Commission must determine a ‘need-based minimum pay,’ estimated entirely from the ILC norms and factoring in the 1991 ruling of the Supreme Court to provide for education, medical, recreation, festivals and ceremonies. 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 have further stated that unlike the previous CPCs, the Commission should not exclude any of the seven components (five ILS components + additional 25 percent provisioning + skill factor) on the apprehension that it would impose a heavy financial burden on the government.

4.2.6 Based on the various components of the ILC norms and the subsequent additions the JCM -Staff Side has reported that the minimum pay should be ₹26,000 per month, as on 01.01.2014,the date from which it wants the Commission’s recommendations to be implemented. The prices used for the calculation are stated to be the retail prices prevailing in New Delhi, Mumbai, Chennai, Kolkata, Hyderabad, Bhubaneswar, Trivandrum and Bangalore, as on 01.01.2014. The JCM-Staff Side has argued that this estimation of minimum pay is still on the lower side. This is on the basis of their argument that the 15th ILC norms need to be revised for including old and dependent parents as additional consumption units.

Fitment

5.1.27 The starting point for the first level of the matrix has been set at ₹18,000. This corresponds to the starting pay of ₹7,000, which is the beginning of PB-1 viz., ₹5,200 + GP 1800, which prevailed on 01.01.2006, the date of implementation of the VI CPC recommendations. Hence the starting point now proposed is 2.57 times of what was prevailing on 01.01.2006. This fitment factor of 2.57 is being proposed to be applied uniformly for all employees. It includes a factor of 2.25 on account of DA neutralisation, assuming that the rate of Dearness Allowance would be 125 percent at the time of implementation of the new pay. Accordingly, the actual raise/fitment being recommended is 14.29 percent.

4.2.9 The cost estimated from Step 7 is next rounded off to ₹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 ₹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:

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

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