PSU general insurer employees irked with move to link pay with performance
Mumbai, October 17, 2022
Unions to hold demonstrations this week, opposing the move. They are also planning to raise the issue with FinMin officials post Diwali
Employee unions are irked by the government’s decision to link the next revision in wages of PSU general insurance staff, due from August 2022, to the performance of the company and their own performance.
Unions are vehemently opposing this move by the government and plan to hold demonstrations this week to show their opposition to the move. They are also planning to raise this issue with finance ministry officials post Diwali.
Wage revision for public sector banks and insurance companies is done every five years. Last week, the finance ministry notified an average 12 per cent wage hike for employees of four public sector general insurance companies, effective August 1, 2017. The wage is applicable to those who were in the service of these companies. Officers and employees will also get arrears for five years.
“We had to wait for 64 months to get the wage hike. They have given a 12 per cent wage hike, while LIC employees have received a 16 per cent wage hike. So, there is no parity,” said Trilok Singh, Secretary, General Insurance Employees' All India Association (GIEAIA).
The next revision due from August 2022 will be in the form of a variable pay based on the performance of the company and the employee, the government notification said. The employee unions are expressing serious reservations around this.
“The public sector insurers and their employees implement government schemes that are running in losses, and it is the companies that are bearing the losses. So, if there are losses in the industry then how can the performance of the companies be judged? But without any discussion they are moving ahead, and we have serious reservations around that,” Singh said.
For the past six months, General Insurance Public Sector Association (GIPSA) and DFS have deputed EY to the public sector general insurance companies. "We are demanding EY’s report from the government and want discussions on the report. If they go ahead with it, we will have no option but to agitate. After Diwali, we will try to meet the finance ministry officials on this issue," Singh added.
Experts say the government’s decision to link wage revision with performance could have been driven by the financial health of the four public sector insurers. New India Assurance’s, the only listed state-owned general insurer, saw its profit plummeted in FY22 to Rs 164.27 crore from Rs 1,604.69 crore in FY21. According to a report by the country’s comptroller and auditor general (CAG), all four public sector insurers incurred losses of Rs 26,364 crore in the health insurance portfolio between 2016-17 to 2020-21, which has overshadowed the Rs 7800 crore profit the companies made in marine, motor, and fire insurance during the period.
[The Business Standard]