Sunday, 18 September 2016

7th Pay Commission minimum pay and fitment factor – IRTSA Memorandum to Committees of Secretaries

7th Pay Commission minimum pay and fitment factor – IRTSA Memorandum to Committees of Secretaries – Minimum Pay of Rs. 22,100 and fitment factor of 3.15 are to be fixed IRTSA Memorandum to Govt on fixation of Minimum Pay & Fitment Factor of 7th CPC INDIAN RAILWAYS TECHNICAL SUPERVISORS ASSOCIATION
Additional Secretary (Expenditure), Government of India, North Block, New Delhi-110001
For kind consideration of the Committee of Secretaries – On Minimum Pay & Fitment Factor of 7th CPC Subject: MINIMUM PAY & MULTIPLE FACTOR AFTER 7TH CPC Reference:
i) Para 10.1.67 of Report of 7th Pay Commission
ii) Para 3 & 4 of Resolution No. 1-2/2016-IC dated 25-7-2016 of Govt of India on 7th CPC Report
We have to make the following submissions for the kind consideration of the Committee for regarding Minimum Pay and Fitment / Multiplication Factor: 1. MODIFICATIONS ACCEPTED BY SUPREME COURT & PRESENT DAY REQUIREMENTS IGNORED BY 7TH CPC FOR DECIDING MINIMUM PAY BY Dr. W. AYKROYED FORMULA
a) The Minimum Pay Fixed at Rs.18000 by the 7th CPC is very much unjust and meager and ignores the accepted norms in this regard.
b) The Minimum wage of Rs.18000 proposed by 7th Pay Commission is based on Dr Aykroyed formula for Minimum Need Based Wage which was adopted by 15th Indian Labour Conference held in 1957. This needed to be updated as per present day requirements. As per law of natural justice and as per directions of the Supreme Court of India issued as long back as in 1991 in the case of Reputekos Brett & Co. Vs Workers & others.
c) Prescribed provision of 25% to cover education, recreation, festivals & medical expenses has been reduced to 15% by 7th CPC. Similarly provision for housing has been reduced from prescribed 7.5% to 3% which are totally inadequate, unjust and unrealistic..
d) In para 4.2.8, Step-1, 7th CPC indicated that a family is comprising of three consumption units, as per norms set by 15th Indian Labour Conference (ILC) in 1957.
e) Computing husband as one unit, wife as 0.8 unit and two children each below the age of 14 as 0.6 unit is very much inadequate and 15th ILC had not considered maintenance of aged parents. f) Maintenance and Welfare of Parents and Senior Citizens Act, 2007 make it a legal obligation for children and heirs to provide maintenance to senior citizens and parents, by monthly allowance.
g) It is therefore, necessary that while calculating cost for maintenance household the aged parents should also be considered as 2 Units besides the husband, wife, two Children as consumption units per family and the same should be taken at least as four (if not five) instead of three.
h) Dr. W. Aykroyd formula on food & other requirements and associated requirements specified by 15th ILC shall be applied for 4 consumption units per family.
i) Minimum Pay works out to be Rs.24,000 (instead of Rs.18000 recommended by the 7th CPC) and the multiple factor 3.43 (instead of 2.57 recommended by the 7th CPC)
j) Table-1 of 7th CPC for calculation of minimum pay needs to be redrawn as under by keeping 4 consumption unit per family: Table-1 Calculation of Minimum Pay as on 01.01.2016 for four consumption unit per family Per day PCUUnitPer month 4 PCUUnitPrice/Unit \ R s.Expenses R s. 1Rice/Wheat475gm57.00kg25.931478.01 2Dal (Toor/Urad/Moong)80gm9.60kg97.84939.26 3Raw Vegetables100gm12.00kg58.48701.76 4Green Vegetables125gm15.00kg38.12571.80 5Other Vegetables75gm9.00kg32.80295.20 6Fruits120gm14.40kg64.16923.90 7Milk200ml24.00l i t re37.74905.76 8Sugar/Jaggery56gm6.72kg37.40251.33 9Edible Oil40gm4.80kg114.02547.30 10Fish3.33kg268.38894.60 11Meat6.67kg400.902672.67 12E gg120no.4.27512.40 13Detergents etcR s/month388.41388.41 14Clothing7.33m eter164.881208.57 15 T otal (1-14) 12290.97 16 Fuel, Electricity, Water Charges 3072.74 17 Total-(15) divided by 0.8 15363.71 18 Marriage, Recreation, Festivals, etc. 2711.24 19 Total-(17) divided by 0.85 18074.95 20 Provide for Skill by adding 25% to (19) 4518.74 21 Sum (19+20) 22593.69 22 Housing @ 698.77 23 Total-Divide no.21 by 0.97 23292.47 24 Step up of 3% on No.23 as DA is projected at 125% on 01.01.2016 698.77 25 Final Minimum Pay as on 01.01.2016 (23+24) 23991.24 26 Rounding off 24000

a) 40% fixation benefit was given over 4th CPC scale to 5th CPC scale in general to all the scales.
b) 40% of maximum of 5th CPC scale was given over 5th CPC scale as fixation benefit in general in 6th CPC scales.
c) But, only 14.29% (i.e even less than 15%) of basic pay has been given as fixation benefit is after the 7th CPC over 6th CPC pay, which is grievously inadequate.
d) Table-2 given below gives the comparison on fixation benefit given after 6th CPC & after 7th CPC. Table-2 5 t h CPC 6 t h CPC % increase from 5th CPC Pay + DA to 6th CPC Pay 6th CPC Pay + 125% DA 7th CPC Pay % increase from 6th CPC Pay + DA to 7th CPC 5th CPC Pay 5th CPC Pay + DA 86% PB GP 6th CPC Basic Pay 2750 5115 PB-1 1800 7000 36.85% 18000 14.29% 3050 5673 PB-1 1900 7730 36.26% 22050 19900 13.68% 3200 5952 PB-1 2000 8460 42.14% 24507 21700 19.66% 4000 7440 PB-1 2400 9910 33.20% 25389 25500 15.18% 4500 8370 PB-1 2800 11360 35.72% 30996 29200 16.18% 5000 9300 PB-2 4200 13500 45.16% 35186 35400 16.54% 7450 13857 PB-2 4600 17140 23.69% 42525 44900 22.50% 7500 13950 PB-2 4800 18150 30.11% 51314 47600 12.83% 8000 14880 PB-2 5400 21000 41.13% 59063 53100 16.37% 8000 14880 PB-3 5400 21000 41.13% 63882 56100 18.73% 10325 19205 PB-3 6600 25350 32.00% 66150 67700 16.58% 12000 22320 PB-3 7600 29500 32.17% 81302 78800 17.05% 14300 26598 PB-4 8700 46100 73.32% 94248 118500 14.24% 15400 28644 PB-4 8900 49100 71.41% 145215 131100 19.91% 14300 26598 PB-4 10000 53000 99.26% 153059 144200 35.21%

e) The Multiple Factor of 2.57 proposed by the Pay Commission for Pay Fixation is totally unjust, inadequate and arbitrary especially keeping in view the high inflation (in real terms and wage rise in the organized sector including the PSUs after two revisions in PSUs since the Sixth CPC. The Fixation Benefit needs to be at least 40% – as after the last two Pay Commissions and the Common Multiple Factor may please be fixed at least (Pay+DA) + 40% of Pay + DA, ie. 3.15 times of 6th CPC basic pay. Table -3 showing calculation of new pay which will be equal to Pay + Pay fixation benefit equal to 40% of 6th CPC Pay + DA 1Minimum Pay (6th CPC)7000 2D A @ 125%8750 3Pay + DA15750 4Fixation benefit (40% of Pay + DA) & Proposed increase in real wage6300 5New Pay (3+4)22050 6Increase in basic pay (in Rs.) (5 – 1)15050 7No . of times increase in basic pay3.15 8Real wage no. of times increase1.40 k) Minimum Pay works out to be Rs.22,100 (instead of Rs.18000 recommended by the 7th CPC) and the multiple factor 3.15 (instead of 2.57 recommended by the 7th CPC)

3. MINIMUM PAY BY MERGER OF DA EVERY TIME THE DA RISES BY 50% a) Merger of DA with Pay & Pension was always done every time the DA crossed 50%, except after the Sixth Pay Commission and that norm justifiably needs to be restored. b) Minimum Pay as on 1-1-2016 would be Rs.19,687 if DA was merged with Pay when the DA crossed 50% (from 1-1-2011) and when it crossed 100% even without any relief or fixation benefit of 7th CPC and the Minimum Pay would be Rs. 22,483 or say 22,500 with 14.29% of total emoluments Fixation benefit given by the 7th CPC (which itself was the lowest ever after any CPC) – as per detailed calculations submitted below:
4. a) Minimum Pay after DA Merger at 50% & 100% and with 14.29% rise. 7000×1.5 = 10500 x 1.5 = 15750×1.25 = Rs.19687×1.1429 = 22500.272 or say Rs.22000
b) Fitment Factor after DA Merger at 50% & 100% and with 14.29% rise = 22500 / 7000 = 3.21 times of BP
c) Even if the Merger of DA was done only once after it crossed 50% (on 1-1-2011), Minimum Pay as on 1-1-2016 would have been Rs.18375 (without any relief or fixation benefit of CPC) and Rs.20984 or say Rs.21000 with 14.2% Fixation benefit given by the 7th CPC as per details below:
d) Minimum Pay after DA Merger at 50% & 100% and 14.2% rise: = 7000 x 1.5 = 10500 x 1.75 = 18375 x 1.1429 = Rs.21000.7875 or say Rs.21000.
e) Fitment Factor after DA Merger at 50% and 14.2% rise 21000 / 7000 = 3 times of BP
f) All the foregoing calculations of Minimum Pay and Fitment Factor are linked to only 14.2% rise of wages as inherent in the recommendations of 7th CPC – which is the lowest ever rise after a Pay Commission in recent years.
g) The minimum Pay may please be fixed as Rs.22500 and the multiple factor for revision of Pay and Pension may please be fixed as 3.21.
4. It is, therefore, requested that, in view of above submissions:
a) Minimum Pay may please be fixed as Rs.24,000 and the multiple factor 3.43, by modifying Dr.W.Aykroyed Formula & 15th ILC norms by duly taking into account Maintenance and Welfare of Parents and Senior Citizens Act, 2007. (or)
b) Minimum Pay be fixed as Rs.22,100 and the multiple factor 3.15 by giving 40% fixation benefit for the 6th CPC Pay & DA. (or)
c) Minimum Pay may please be fixed as Rs.22500 and the multiple factor for revision of Pay and Pension may please be fixed as 3.21, by merging the DA with Pay whenever it crossed 50% with fixation benefit of 14.2% equitant to the rise recommended by 7th CPC.
Thanking you in anticipation,
Yours faithfully,
Harchandan Singh,
General Secretary,
IRTSA Download IRTSA Memorandum IRTSA/CHQ / Memo CPC MF / 2016-16 dated 14.09.2016

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