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PSU general insurer employees irked with move to link pay with performance

Experts say the government's decision to link wage revision with performance could have been pivoted on the financial health of the four public-sector insurers

salary, wage, pay hike
'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.' (Representative Image)
Subrata Panda Mumbai
3 min read Last Updated : Oct 19 2022 | 9:23 PM IST
Employee unions in public-sector insurance companies are unhappy with the government’s decision to link the next revision in wages of the staff to the performance of the organisations concerned and theirs.

The revisions take effect in August this year.

Unions are opposing this move and planning to hold demonstrations against it this week. They are also planning to take up the matter with finance-ministry officials after Diwali. A wage revision for public-sector banks and insurance companies is done every five years.

As regards the previous wage revision, the finance ministry last week notified an average 12 per cent hike in wages for employees of four public-sector general insurance companies (there are four in all) effective from August 1, 2017. It is for those who were and are with them since the cut-off date.

“We had to wait for 64 months to get the wage hike. They have given a 12 per cent wage hike while LIC (Life Insurance Corporation) employees have received 16 per cent. There is no parity,” said Trilok Singh, secretary, General Insurance Employees’ All India Association (GIEAIA).

“It is unfortunate that in a unilateral and unconstitutional manner even without having shared the complete reports of the consultants i.e. EY on Key Performance Indicator (KPI) and restructuring, the future wage revision for the year 2022 onwards has been linked with the performance of the company and individual (employees),” said the GIEAIA in a statement.

“The public sector insurers and their employees implement the government schemes, which are running in losses, and it is the companies who 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.

According to the unions, the General Insurance Public Sector Association (GIPSA) and Department of Financial Services (DFS) have put EY on the matter, and they are asking for EY’s report from the government so that discussion can be held on it.

Separately, the National Confederation of General Insurance Officers Association (NCGIOA), in a letter to the GIPSA, has said the concept of performance-based wage revision is unheard of in any public-sector undertaking, regardless of sector. They said they were promised this would be implemented after discussion.

“Now inserting a clause by back door method is not acceptable and is also commendable,” the letter said. The NCGIOA has the GIPSA to delete the provision of performance-based wage revision from the notification.

Experts say the government’s decision to link wage revision with performance could have been pivoted on the financial health of the four public-sector insurers. New India Assurance, the only listed state-owned general insurer, saw its profit plummet in FY22 to Rs 164.27 crore from Rs 1,604.69 crore in FY21.

According to a report of the Comptroller and Auditor General, all four insurers incurred losses of Rs 26,364 crore in the health insurance portfolio between 2016-17 and 2020-21. That is far greater than the Rs 7,800 crore profit the companies made in marine, motor, and fire insurance during the period.

Topics :PSUgeneral insurerspay hikeFinance ministerPSU insurance firmsGeneral InsurancePublic sectorGovernmentInsurersemployees

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