India's four state-owned non-life insurance companies are considering giving their 66,000-strong workforce profit-linked incentives, in a bid to break a wage-negotiation deadlock with unions.
A decision to this effect was taken at a meeting which was held by General Insurance (PSU) Association (GIPSA), which represents the state-run general insurers, reported the Press Trust of India. The four insurers are New India (Mumbai), United India (Chennai), National Insurance (Kolkata) and Oriental Insurance (New Delhi).
The management of the insurance companies have offered a pay increase of 10.5% to employees, a proposal which has been rejected by the unions which are asking for a hike of at least 22%. Two rounds of wage negotiations have been held, on 15 September 2014 and 29 January 2014, with no agreement struck.
Under the latest proposal, employees are likely to get profit-linked incentives, to take effect from August 2012. The workers are represented by eight unions to negotiate a new wage agreement, which is signed for five years. The last agreement lapsed in August 2012.
All four insurers together registered a profit of over INR20 billion (US$325 million). Individually, they posted net income of an average of INR6 billion to INR7 billion for the fiscal year ended 31 March 2014, according to a GIPSA official. Under current rules, any company which has generated profit of over INR2 billion is eligible to offer profit-linked incentives to employees.
(Courtesy: SC Kapoor)