To pay or not to pay, is the contentious question

Union leader Sharad Rao, who called the workers’ demand for ex-gratia payment of Rs 106 crore a “plain” one, said: “Ex-gratia payment is considered a customary payment akin to bonus wherever the Bonus Act does not apply.” He cited, as a precedent in this case, a 1976 Supreme Court judgement in response to a petition filed by the Mumbai Kamgar Sabha against Abdulbhai Faizullabhai and others. However, a law officer from the BMC said the case in question was fought between workers of a profit-making organisation and its management and thus could not be cited as a precedent for a non-commerical body like the BMC.

Former municipal commissioner S S Tinaikar, however, defended the demand for ex-gratia payment. “Even textile mills pay their workers bonus. The state government has announced ex-gratia payment to its employees this year even though it faces a deficit,” he said. “The new precedent set by the BMC is all wrong. It is the workers’ right to receive ex-gratia payments,” he stressed, adding that the current deficit should not influence the BMC’s decision precisely because the BMC is not a profit-making organisation.

Payment of ex-gratia began in 1973, when the then municipal commissioner B G Deshmukh announced it as the “civic administration’s gift to its employees.” The payments have been made consistently since and ex-gratia has assumed the nature of a “customary payment.” However, the BMC made no provision for it in this year’s budget.

Surprisingly, the BMC Act makes no mention of ex-gratia payment, and the state government had in fact issued a GR on July 14, 1998 saying civic bodies need not pay ex-gratia to their employees.

For municipal commissioner Nalinakshan, ex-gratia payment is unnecessary for “the highest paid of all municipal workers in India,” especially when the BMC is plagued with financial trouble. “Rs 106 crore is too much of a burden for the corporation to bear,” he said, adding that the workers had been receiving ex-gratia for 27 consecutive years. “Now when the economic scene is poor, the workers should bear with the corporation,” he said. “We have stalled the payment only for this year. Next year we will consider,” he pointed out.

He laid stress on the fact that the BMC paid its workers scales higher than those recommended by the Fifth Pay Commission, saying a driver in the BMC earns between Rs 10,000 to Rs 15,000 per month, including overtime dues. “The workers want the best of both worlds. They want housing loans and allowances as per the Fifth Pay Commission’s recommedations, even though the corporation provides them with housing,” he said.

Nalinakshan said the BMC’s salaries are higher than those given by any other civic body in the country. “The overtime dues of the workers often exceed their salaries,” additional municipal commissioner Ajit Kumar Jain said.

In 1998, a three-year agreement on ex-gratia payment was signed between the employees unions and the civic administration, which made ex-gratia payment mandatory. However, the expiry of the agreement in March this year has immediately sparked a tussle between workers and the administration.