A joint struggle in Tamil Nadu

Government employees and teachers of state-aided educational institutions plan a joint agitation in the face of a series of government measures that would curtail their rights and benefits.

IN a significant development, more than 350 unions and associations representing over eight lakh government employees and two lakh teachers of state-aided educational institutions in Tamil Nadu have united to fight the continuous onslaught by the Jayalalithaa regime on their rights and privileges. Two major organisations to which these associations and unions are affiliated have formed an umbrella organisation to carry on the struggle to win back the lost benefits. The new federation has charted an action plan, according to which rallies will be held in Chennai and the various district headquarters on May 8 and an indefinite strike from July 2 if its demand is not conceded.

The Joint Action Council of Teachers and Employees Organisations Government Employees Organisations (JACTEO-GEO) organised a token strike on April 10 demanding the restoration of the employees' rights. The Confederation of Teachers Associations and Government Employees Organisations (COTA-GEO) did not participate in the strike but observed a day's fast. The representatives of these two organisations met in Chennai on April 21 and formed the federation, JACTO-GEO-COTA-GEO, to lead a united struggle.

Right from May 2001, when the All India Anna Dravida Munnetra Kazhagam (AIADMK) government headed by Jayalalithaa assumed office, it has been denying or curtailing government employees' customary rights and benefits such as dearness allowance (D.A.), travel allowance, festival advance and the leave encashment facility. The government announced many cost-cutting measures, including retrenchment and a freeze on new appointments. At one stroke it dismissed 10,000 permanent employees in the Highways Department. The government justified these measures by stating that the State's finances were in the red owing to the policies of the earlier Dravida Munnetra Kazhagam (DMK) regime. Also, the measures, the government said, were in tune with the reforms regime and the conditions set by the World Bank and other international lending agencies.

A series of agitations by various sections of employees were of no avail. Assurances of a better deal, given from time to time by the government, went unhonoured. Strikes called by the unions were often defeated with the help of "loyal" employees or with repressive measures such as mass arrests of the participants and threats to use laws such as the Essential Services Maintenance Act (ESMA), under which those abstaining from work would face three months' imprisonment and a fine of Rs.5,000. However, certain recent measures of the State government, which would sweep away the employees' terminal benefits, which are valued at a few lakhs of rupees, proved the proverbial last straw. The April 10 strike was a big success "notwithstanding the ESMA threat", a strike leader said. Only 60 of the 8,000 employees reported for work at the Secretariat, he added.

Finance Minister C. Ponnaiyan's March 21 Budget speech had some small mercies for the agitated government employees and teachers, many of whom feared that their retirement age would be scaled down from 58 to 56. Ruling out any hike in pay and allowances in view of the "extreme financial stress", the Minister announced that the government would provide one additional instalment of D.A. with effect from April 1, 2003. The 3 per cent hike would mean an extra expenditure of Rs.200.91 crores a year. He announced that the 4 per cent D.A. hike sanctioned earlier, with effect from October 1, 2002, on the condition that three-fourths of the benefit would be given in cash and the rest be impounded in the General Provident Fund, would be paid fully in cash with effect from April 1, 2003.

The two announcements would have cheered the government employees and the teachers, but for a third one, relating to an assurance given by the DMK government in 1998. While implementing the Sixth Central Pay Commission's recommendations with effect from January 1, 1996, the government paid them only 40 per cent of the arrears for the period between April 1, 1996 and March 31, 1998, with the assurance that the balance would be paid with interest on a later date. Ponnaiyan said: "We inherited a situation in which we found it difficult to meet even the current commitments and pay the existing entitlements. It is impossible to pay the arrears, which have now mounted to nearly Rs.1,800 crores... ."

Announcing new schedules for the payment of arrears, the Minister said that arrears on account of commutation in respect of those who retired between January 1, 1996 and March 31, 1998 would be paid in three equal annual instalments with interest, starting from 2003-2004. Arrears relating to gratuity, with interest, would be paid in the form of small savings certificates in three equal annual instalments from 2003-2004. As for those who retired between January 1, 1996 and March 31, 2003, the arrears of pay and allowances with interest would be blocked into a non-interest-bearing account from April 1, 2003 and paid in the form of savings certificates in three annual instalments starting from 2003-2004. In the case of those "still in service", the arrears would be retained in a non-interest-bearing deposit account from April 1, 2003, and would be paid in the form of small savings certificates in three equal annual instalments, the first at the time of retirement. For example, those retiring during 2003-2004 would get their second and third instalments in the two subsequent years.

The announcement implied that the delay in the payment of arrears with no interest thereon would range from one year to 32 years, depending upon the dates of retirement. This is perceived by a union leader as "the most unkindest cut of all". According to him, it would disappoint a large number of retired persons who have been awaiting the payment. By refusing to honour past commitments, the government had lost its credibility, he said. Several employees, who are still in service felt that the denial of interest and the postponement of payment until retirement were unjust actions. According to them, the money, when returned, would have little value given the current rate of inflation.

The announcement and the five Government Orders (G.O.) issued two days prior to the Budget, which made drastic changes in the calculation and mode of payment of pensions, came as a rude shock to the retired employees.

SPELLING out the government's determination to slash pension-related entitlements, which it said were "unsustainable", and explaining the need for the drastic changes it had brought about, a common prelude to the G.O.s observed: "It has, therefore become a compelling necessity to examine all entitlements with a view to controlling pension costs in the future." In its first order, the government directed that the minimum service period to qualify for payment of full pension be raised to 33 years from the present 30, and the amount be fixed at 50 per cent of the average emoluments for the 10 months prior to retirement as against the current system of calculation, which is either 50 per cent of the last month's emoluments or 50 per cent of the average of the past 10 months' emoluments, whichever is higher. This order and five other orders relating to terminal benefits, issued on the same day, shall be applicable to those retiring from service on or after April 1, 2003.

The second order provided for encashment of leave up to a maximum of 300 days at the time of retirement. For this, the earned leave accumulated up to 240 days, and unearned leave of up to 120 days, converted into 60 days of full pay, should be allowed for encashment. The encashment would be based only on pay and the D.A. Other allowances such as House Rent Allowance and City Compensatory Allowance would not be taken into account, as done before.

The next two orders altered the method adopted in the commutation of pension. The Tamil Nadu Civil Pension (Commutation) Rules, 1944 provides that a government servant shall, subject to certain conditions, be allowed to commute for a lump sum payment of a portion of the pension. Under the existing rules, a government servant on retirement can opt for a maximum of 40 per cent of the pension payable for 15 years. The commuted amount would be paid on a discount rate of 4 per cent, which would be deducted from the monthly pension for a period of 15 years. While the third order raised the discount rate from 4 per cent to 8 per cent, the fourth order reduced the upper limit for commutation to 33.33 per cent of the pension as against the earlier 40 per cent.

The fifth order related to the payment of gratuity. The government argued that following a pay revision with effect from January 1,1996, payments in respect of gratuity increased substantially. The government's expenditure under this head went up from about Rs.224 crores in 1998-99 to more than Rs.500 crores in 1999-2000. While retaining gratuity at the same level of entitlement at the time of retirement, the government directed that 50 per cent of the payment be in cash and the rest in small savings certificates.

N.L. Sridharan, president of the Tamil Nadu Government Employees Association, said that the increase in the number of years of service to qualify for pension would deprive a large number of employees of pension benefits, especially with the recent increase in the upper age limit for entry into government service to 27 years. With the retirement age remaining at 58 years, those who join government service at the age of 27 will not complete the number of years of service required to be eligible for full pension. Employees belonging to the Scheduled Castes and the Scheduled Tribes and those appointed on compassionate grounds would also be affected, he said. The change in respect of the calculation of the pension and the exclusion of city compensatory allowance and the house rent allowance from the calculation would also affect them. The changes in respect of commutable pension and the mode of payment and the hike in the discount rate would come as a jolt to retired personnel, Sridharan said. On the whole, the loss to each employee ranged from Rs.90,000 in the case of an office assistant to Rs.4 lakhs in respect of an officer at the highest level in the State cadre, he said.