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New wage structure for PSUs: Cabinet

There are orders to link the hike to productivity, output and profitability of companies, reports KA Badarinath.

india Updated: Oct 16, 2006 22:00 IST
KA Badarinath
KA Badarinath

The wage bill of the central Public Sector Companies (PSUs) is all set to rise by 15 – 25 per cent. The Union cabinet on Monday gave the PSU managements the go ahead to start discussions with their unions on a new wage structure for their workers.

Briefing newsmen, Information and Broadcasting Minister Priyaranjan Dasmunshi said, "The managements of central PSUs are now free to negotiate with their unions keeping in mind their profits and resource positions."The new wage structure will come into force for all PSUs personnel from the beginning of next year.

The new norms have however directed the managements to link the increase in pay to productivity, output and profitability of their companies.

The UPA Government’s decision comes soon after the constituting the sixth pay panel headed by Justice Sri Krishna for the central government employees.

"We will have to start talking to the unions," said RC Shrivastav, director (human resources) at NTPC. If workers wages are raised, the management will have to increase the emoluments of officers as well, company sources said.

As per the cabinet directive, the profit making PSUs will enter into a deal with their workers for next ten years that includes 100 percent dearness allowance neutralisation and revision in perks.

“Automatic neutralisation of dearness allowance for PSUs workers should be allowed as in the case of central government employees,” said SM Dewan, director general of Standing Conference on Public Enterprises (Scope).

The Union Cabinet has directed the PSUs chiefs to ensure that “there shall be no increase in labour cost per physical unit of output”. However, the government has made it very clear that under no circumstances, it will provide any budgetary support for the enhanced wage bill.

The centre has asked the managements of sick PSUs to await the approval of revival plan by the Board for Industrial and Financial Reconstruction (BIFR). Unless the board makes a specific provision for additional expenses on account of wage revision, the company will not be allowed to increase the pay for its workers.

Board for Reconstruction of Public Sector Enterprises (BRPSE) has been empowered to take a decision in a final decision with regard to BIFR cases.

Companies that have incurred losses during any of the past three financial years but not referred to either BIFR or BRPSE, have also been allowed to enter into wage negotiation. However, the administrative ministry has been given the final mandate to decide on the hike for employees in such companies.

“Loss-making companies would be worst sufferers. They will not be able to convince their workers to await either revival plans by BIFR or BRPSE” said SM Dewan.

First Published: Oct 16, 2006 21:27 IST