Monday, 31 October 2016

Ensure Implementation of Equal Pay for Equal Work.

Confederation of Central Government Gazetted Officers' Organisations (CCGGOO) welcomes the judgment of the Supreme Court of India reiterating the right of ‘equal pay for equal work’. The court delivered a judgement on this, on October 26.

This issue of denial of same wage for same and similar jobs was being raised for long by the trade unions. Despite having a law of Equal Remuneration Act – to ensure that there is no disparity in wages between men and women while doing the same job – disparities still persist in various sectors. The same issue continues, with the huge disparities in the wages and other benefits between regular workers and casual, daily-rated and contract workers doing the same work.

This issue was raised again and again by the trade unions with different governments at the centre. In the year 2009 and 2010, the Indian Labour Conference, the highest tripartite body in the country, had concluded on amending the Contract Labour (Abolition and Regulation) Act to ensure same wage for same and similar jobs. This was repeated again in the 46th Indian Labour Conference in 2015.

But the government has not done anything on that. This was one of the demands on which the trade unions in the country have been conducting struggles and organising country wide general strikes.

The CCGGOO demands that at least now, with the Supreme Court directing that the principle of equal pay for equal work constitutes a clear and unambiguous right vested in every worker, the government of India and the state governments should ensure this principle. CCGGOO demands that there should be no further delay in ensuring implementation of this.

The Supreme Court has highlighted certain principles for the implementation of this right of the worker. The government of India should also ensure that these principles enunciated by the Supreme Court should not be used for manipulations to deny this right.

The CCGGOO calls upon all the Associations, Unions, Federations,Officers and workers to be prepared for necessary struggles to get this right implemented in all sectors.

Thursday, 13 October 2016

Programme of action is inevitable

The meetings of allowances and standing committee of National JCM scheduled on 13th October 2016, has been postponed to 25th October 2016. It was expected that the recommendations of allowance committee will be made in October 2016, with the postponement of meetings now we can expect the allowances committee will submit its report in November 2016.

Meanwhile the Finance Ministry has issued orders on advances. The 7th CPC has recommended for abolition of all advances, the staff side demanded retention of all advances , some of the advances such as medical, computer and travelling allowances are retained, but the important festival advance has been abolished.

The Government has so far not set up the high level committee on minimum wage, fitment formula revision and other main demands of CG employees as assured by Cabinet Ministers in July 2016. Four months’ time which was sought by the Cabinet Ministers is going to end shortly.

The Central Government has shown urgency in issuing orders on advances, but the same urgency is not shown in case of issue of orders on allowances and revision of minimum wage, fitment formula which will benefit lakhs of Central Government employees.

To put more pressure on the Central Government to accept the main demands of the Central Government employees and Officers, programme of action is inevitable.

New Pension System – It’s No Pension Scheme

Discontent is simmering among the government employees and teachers over the Contributory Pension Scheme also called the National Pension Scheme that was launched in 2003 by the then NDA government. The united Andhra Pradesh government and later the Telangana State governments have also adopted the scheme. After 2004, the ranks of government employees denied the defined benefit pension and brought under this contributory pension scheme started to swell. They are realising its ill-effects on them. There are about 1.15 lakh such employees in Telangana and another 1.56 lakh in Andhra Pradesh, who are affected by the New Pension Scheme.

As per this scheme, the central government employees appointed on or after January, 1, 2004 will come under this scheme. Until then, the government employees were getting pension as an additional post-retirement benefit. But, the new scheme provides for pension based on the contributions from the employees accrued in a fund set up for the purpose. The Pension Fund Regulatory Development Authority Act (PFRDA) was enacted by the then UPA government in 2013 with the support of the major opposition, NDA. In accordance with the Act, the pension funds will be invested in the stock market and the quantum of pension being subject to its vagaries.  The lives of the retirees would therefore swing as per the bulls and bears of capital market.

 The government and the promoters of PFRDA Act argued that the retired employees are to be benefited immensely by the New Pension Scheme as the markets would yield them wealth. But, this wealth perceived is actually market capitalisation. Its estimates are just notional. In the previous scheme, the pension benefit was defined and calculated based on the last drawn pay. Apart from this defined pension, the retired employees in the old scheme would also get other benefits like gratuity and commutation. But, in the new pension scheme, the quantum of pension is completely dependent on the price fluctuations in the market. If the market plunges due to one sentiment or the other, then the retirees would be losing heavily for no fault of theirs. Stock markets across the world are prone to either manipulation or speculation. The uncertainties deprive the government employees the luxury of planning their retired life as they become vulnerable to the peculiar behaviour of stock markets.

 The origins of PFRDA are in the Project OASIS (expert  committee) Report (December, 1999), which was constituted by the first NDA government. However, the tripartite Central Board of Trustees of the Employees Provident Fund had, in a special meeting held on February 8, 2000 and was chaired by the then labour minister, unanimously held: “the (said) report is investment centric and not social security or social insurance centric and contains a number of recommendations and suggestions, which are inconsistent with the ground reality or practical considerations.” The CBT was “unanimously of the opinion that the proposals in the report … would seriously jeopardise the safety and future savings of the workers as well as the whole concept of social security and social insurance.”

 Even the Bhattacharya Committee, appointed by the NDA government, did not recommend only a ‘defined contribution’ scheme, which is the case with the New Pension System. It recommended a hybrid Direct Benefit /Direct Contribution or mixed scheme. The policy of pension reforms emerges out of the World Bank report titled, “Averting the Old Age Crisis”. This report advocated pension sector reforms. The essence of the World Bank report  was not to tackle the crisis  faced by the elderly in their old age  as professed in the title of the report , but , to resolve the ‘crisis’ of the pension pay out burden of the governments world over. This new scheme works out as follows. The gratuity and commutation amount are paid out of the 60 percent withdrawn from the accumulated contribution of the employees during their service. The remaining 40 percent will be invested in the annuities. The income yielding out of this would be paid as pension. In the old pension scheme, the amount was essentially dependent on the maximum wage one reaches by the time of retirement. The other benefits like gratuity, commutation availed in the old Pension Scheme are non-taxable but 60 percent withdrawals at the time of retirement under the New Pension Scheme are subject to taxation.

 The pension amount earlier was guaranteed. But, now, it is left to markets. When the UPA government defended the New Pension Scheme stating that it would yield more returns than the pension obtained otherwise, Members of Parliament asked the government to ensure a minimum guaranteed pension in the PFRDA Act itself. The then Prime minister Manmohan Singh simply replied how it can be guaranteed as it was dependent on market movements. Infact Section 20(2)(g) of PFRDA Act  inter-alia, provides: “there shall not be any implicit or explicit assurance of benefits except market based guarantee mechanism”. The government employees under this new pension scheme will be deprived of the government Provident Fund account. Thus they will be losing the interest on the GPF accruals and the facility of partial withdrawals from the GPF.

 All the government employees appointed on or after January, 1, 2004 were contributing 10 percent of their pay into the contributory pension scheme. The government would contribute a matching amount. This money is in the National Securities Depository Limited (NSDL). The fund managers, who operate this fund, are investing the same in the markets. The experience so far suggests that the net asset value accrued on these contributions is not even matching the bank interest. Thus, the employees who have earlier failed to comprehensively comprehend the implications of the New Pension Scheme started feeling the pinch of it. Hence, the disgruntlement!

Even the government is not going to benefit much as it has to contribute 10 percent as a matching grant. It is not therefore relieved of the pension burden. However, the industry gets access to massive public savings. The   magnitude of the public resources available for the private sector is evident from the following statistics. By the end of November, 2015, about 16 lakh central government employees were brought under this scheme. The total amount accumulated accounts for about 44,000 crores. Similarly all the state government employees enrolled in the new scheme accounted for over 28 lakh. The total amount was to the extent of over Rs 50,000 crore. This accrual will increase each passing year.

Even the Supreme Court held that pension is a social security measure and is the fundamental right.  The apex court in D.S. Nakara & Others vs. Union of India, 1982   stated that Pension is a right; not a bounty or gratuitous payment. Pension also has a broader significance in that it is a social-welfare measure rendering socio-economic justice by providing old-age economic security to those who toiled ceaselessly in their youthful heyday.

Privatising pension funds tantamounts to privatising social security and depriving the protective freedom enjoyed by the employees, who contributed to the government service for decades. The PFRDA Act applies to those appointed after 2004. However, the pace with which pension reforms are implemented across the world leaves no guarantee that the Act will not be mandatorily extended to the employees recruited prior to 2004, who are now in the old defined benefit pension scheme. In case, if the government does so, it is unlikely that the courts will strike it down as Supreme  Court in many judgments held that when  the State  considered  it  necessary  to liberalise the pension scheme   in order  to augment  social security in  old age  to government  servants it  could not grant the  benefits of liberalisation only  to  those who retired subsequent  to the  specified date and deny the same to those who had  retired prior  to that date.

 The government can escape judicial scrutiny claiming that New Pension Scheme benefits employees. Investing public savings in the stock markets should be the option of those who save. But, the New Pension Scheme makes it mandatory. Each employee will have his or her own priorities of expenditure in life. The economic necessities differ from person to person. How can one be deprived of choice of spending one’s surplus income? Even if the government ascribes to itself the parental role, the mandatory savings should yield minimum guaranteed and better returns. The risk-absorbing capacity of a retiree will be limited and it varies from individual to individual.

 Under this New Pension Scheme, the employees will not get any family pension facility. Besides, service charges will be collected from the employees for managing their pension funds.  As per the PFRDA Act, the government gives a matching grant. But, this may not stand as evident from the experience of pension reforms in other countries like in many East European countries. The governments often implement fiscal austerity regime. They are legally mandated to control expenditure under Fiscal Responsibility and Budget Management (FRBM) Act. In such a situation, the possibility of government slashing its share of the contribution by amending the Act cannot be ruled out.  Noble laureate and former chief economist of World Bank, Joseph Stiglitz warned that pension privatisation can lead to worsening of economic crisis as evident from the experience of Argentina.

Thursday, 6 October 2016

CCGGOO Circular No.6

CCGGOO Circular No.6

CCGGOO Circular No.6

CCGGOO Circular No.6

Minimum Wage and Fitment formula will be Rs. 20000 and 2.86 respectively if Minister’s statement is adopted

The 7th CPC while calculating the minimum wage of Central Government Employees has arrived at Rs 18,000/-. The 7th CPC has erred in prescribing provision to cover education, recreation, ceremonies, festivals and medical expenses has been moderated to 15 percent against the provision of 25% . Supreme Court’s ruling in the Raptakos Brett Vs Workmen case of 1991, the Hon’ble Supreme Court delivered a historic judgment and directed that children’s education, medical requirement, minimum recreation including festivals/ceremonies, provision for old age, marriage etc. should further constitute 25% of the minimum wage and be used as a guide in fixation of minimum wage.

The Hon’ble Minister of Labour & Employment Shri Bandaru Dattatreyaji in his press statement on 24-September-2016 has stated in Understanding Minimum Wages and Bonus article as follows.

“The norms recommended by the Indian Labour Conference, in 1957, fox fixing the minimum wages are: (a) consumption units for one wage earner; (b) minimum food requirements of 2700 calories per average Indian adult; (c) clothing requirements of 72 yards per annum per family; (d) rent corresponding to the minimum area provided for under Government’s Industrial Housing Scheme; and (e) fuel, lighting and other miscellaneous items of expenditure to constitute 20% of the total minimum wage.

In 1991, the Hon’ble Supreme Court delivered a historic judgement and directed that children’s education, medical requirement, minimum recreation including festivals/ceremonies, provision for old age, marriage etc. should further constitute 25% of the minimum wage and be used as a guide in fixation of minimum wage.”

If this provision is alone adopted by the 7th CPC, the minimum wage would have increased by more than 10% and worked out to Rs 20,000/-. The fitment formula will work out to 2.86. If the entire minimum wage is recalculated based on actual retail prices as on July 2015 without applying average of 12 months and correct methodology the minimum wage would be Rs 26,000/ and fitment formula would be around 3.5.

The Hon’ble Minister’s statement should be applied by the Government in true spirit and the minimum wage and fitment formula should be enhanced accordingly.

Tuesday, 4 October 2016


1.      Settle the demands regarding modifications of 7th CPC recommendations as submitted in the memorandum to Cabinet Secretary. Honour the assurance given by the Group of Ministers 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 in the memorandum submitted to Cabinet Secretary.
3.      Scrap PFRDA Act and New Pension System (NPS) and grant pension and Family Pension to all Central Government employees and Officers recruited after 01.01.2004, under CCS (Pension) Rules 1972.
4.        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.
5.      No Downsizing, Privatisation, outsourcing and contractorisation of Government functions.
6.      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 mark 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 punity 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 Regional basis.
10.  Remove 5% ceiling on compassionate appointments and grant appointment in all deserving cases.
11.  Grant five promotions in the service career to all Central Govt. employees and Officers.
12.   Ensure parity in pay for all with Central Secretariat staff by upgrading their pay scales.
13.  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.
14.  Introduce Productivity Linked bonus in all departments and continue the existing bilateral agreements on PLB wherever it exists.
15.  Ensure cashless medical treatment to all Central Government employees, Officers & Pensioners in all recognized Government and Private hospitals.
16.  Revise wages of Central Government employees and Officers in every five years.
17.  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.

Cut in repo rate by 25 basis points to 6.25 percent

The Reserve Bank of India (RBI) on 04.10.2016 (Tuesday

announced  a cut in repo rate by 25 basis points to 6.25 percent.


GPF interest rate reduced to 8% w.e.f 01.10.2016