MANAGING
PAY, PROMOTION AND TRANSFER
Dr
G P Naik
Director,
Talent Avenues Corporation
Recently I conducted a Strategic HRM workshop for
HR Managers. Some of the participants had an unusual issues to be resolved
through discussion during the workshop as under.
Wage issue
CASE 1: His
Company a German MNC manufacturing electrical products at Jigani in Bangalore
gave 16% increase in salary to the workmen, against industry standard of 9 to
10 percent, but they refused to sign the salary increment letter.
Workmen’s argument: management gave the
entire increase by way of other allowances rather than apportioning into basic,
DA and other components. Hence around 80
percent of workmen have not signed the increment letter.
Management argument: The existing basic
and DA put together works out to be around 80 to 85 percent of total salary. It
was a mistake by our previous head of HR, which we want to correct it now.
CASE 2:
Her company an aluminium manufacturer in Kolkata wants every workman to sign a
salary settlement annually, under section 2(p) of Industrial Disputes Act 1947
to get the annual increment.
Management
logic: Our company advocate told us that by making the individual employees
sign settlements, company can avoid wage disputes.
Workmen
logic: The management should sign a single settlement with union on behalf
of all workmen rather than forcing individual employees to sign it, because
individual employees cannot understand what a settlement is all about. Hence
around 90 percent of the workmen have not signed it.
Solution:
Both the cases do not fall into the category of demanding higher wages or
violation of any wage laws. Hence the following solution was found.
Except the power vested with the government under
Minimum Wages Act 1948, to determine wage rates and related issues, it is the
sole discretion of the management to determine, the rate of wages or the
components of wages.
Government or court of law will not intervene in
the matter as long as employer is not violating any wage laws.
It is not necessary for the employees to accept the
increment letter or sign 2(p) settlement.
Management shall credit the annual increment along
with the Wages and issue the salary slip.
If any workmen do not want the higher Wages, they
can give a letter to the management to stop the increment and management may
accordingly stop it.
If at all any courts have given verdict for paying
wages higher than minimum wages fixed by the government, it is only because the
management Advocates have not argued the case properly.
Promotion
issue
CASE 3:
An automobile company at Indore has at least 50% of its workers with more than
15 years of experience and most of them are drawing wages higher than newly
joined officers. We cannot retrench them without government permission. They
are refusing to accept promotion. Our company advocate says that forcing
employees to accept promotion amounts to violation of labour law.
Solution
It is the sole discretion of the management to
promote the deserving employees based on their performance and potential.
Promotion does not cause monetary or non-monetary
hardship to promoted employees. Hence government and court of law will not
intervene in the matter.
Management should keep encouraging employees to
acquire higher education qualifications and give managerial training, from time
to time.
Management should never negotiate its right to
promote deserving employees as per the organizational needs.
Pay scale should have a time bar and once the
employee reaches the top of pay scale, he shall stop receiving annual
increments, unless and until he opts for promotion.
Most often, promoted employees are better
performers than direct recruits.
Transfer
issues
CASE 4:
A Gurgaon based electronic component manufacturing company, has opened
factories in Chennai and Ahmedabad, and wanted to transfer 79 employees out of
Gurgaon, but no employee is willing to accept the transfer. Company advocate
has said that management cannot transfer employees unilaterally, which is
violation of labour law.
Solution:
Management is not required to give
notice of change under Industrial Disputes Act 1947 for transferring employees
from one place to another place.
Transferring employees is the management discretion
which is not negotiable.
If employees refuse to accept the transfer letter, display
it in the notice board and prevent them from entering the Gurgaon factory.
If they do not report at the new place of posting,
treat them as unauthorised absence and initiate disciplinary action by issuing
charge sheet.
Panacea for
long lasting solution
Mention clearly in the appointment order itself
that, salary variation, promotion to higher cadre and transfer to another
office or location will be done from time to time at the sole discretion of the
management.
Be fair and transparent in your decisions.
Communicate effectively with the employees about
the need for salary variation, promotion and transfer.
Re examines your company advocate’s legal opinion.
Question him for giving you the wrong advice even after charging hefty fees.
