Estimate of the repudiated arrears' payments owed by L.I.C of India to its resigning ex-employees.

         

          Since L.I.C of India refused to provide me with any statistics regarding the wage revision arrears' amounts repudiated, since 1997, I have drawn up an estimate (rather conservatively, since the amounts payable to each person would actually vary with his/her actual length of service, cadre and rank and types of emoluments in the Corporation.) 

          The Corporation gave me a list of 40 employees from the Central Office, 6 employees from the Western Zonal Office (excluding my name, so this number is questionable!) whose arrears have been repudiated, with respect to the 2010 Charter of Wage Revision.

          In its response to one of my questions in my R.T.I appeal, the Corporation stated that it has 115 Divisional Offices, 8 Zonal Offices, 9 Audit Centers, 1 Management Development Center and the Central Office. 

           So in all there are 19 main offices (8+9+1+1) to be considered who could have provided the data asked for by me. All the data flows to the Central Office of the Corporation regularly (Branch office to Divisional office to Zonal office to Central office), since it is the basis of the Balance Sheet prepared by the Corporation. Yet the Central Office didn't provide me the statistics.

            Now let us come to the estimate:

            Assuming 50 Class 1 officers per main office resigned and were denied arrears, with respect to the 2010 Charter, 50 x 19 = 950 Class 1 officers' wage revision arrears had been repudiated.

           Assuming that an equal number of employees resigned w.r.t each of the previous wage revisions in 1997, 2002, 2005, 2010 and 2016, the total number of Class 1 officers whose wages have been repudiated would work out to 950 x 5 = 4750.

          This Clause 3 i b was applicable (though illegally, as has now been established; thanks to the Supreme Court’s judgment!) even to Class 2 Officers - the Development Officers, Class 3 and Class 4 employees of the Corporation..

          Let’s assume that an equal number of them resigned in Class 2 and Class 3 cadres, so 4750 + 4750 = 9500 more employees’ arrears were also repudiated w.r.t those 5 Charters of Wage Revision.

          The total number of resigning Class 1, 2 and 3 employees whose arrears were repudiated will be 4750 + 9500 = 14250

          Assuming that each person would have got a minimum of Rs. 400,000 as arrears (incuding difference in wages, Provident Fund and Gratuity);

         14250 x 400000 = Rs. 5,700,000,000/- would be payable to them, as on date.

          This mind-boggling amount (which would work out to much more actually) will now have to be paid with compound interest at rates applicable on the actual dates that they were payable from, till date. That would work out to billions of rupees.

          (If interest would be paid at 9% p.a. compounded yearly for 14 years, from 2007 till 2021, the total amount payable to 14250 resigning employees would work out to Rs. 19,047,844,055/-)

          The Income Tax as applicable would have to be deducted from these payments and sent to the I.T. department.

Now comes the most offending part!

L.I.C of India has not included these amounts (payable dues - liabilities) in its Statements of Accounts!

By its own admission, in response to my queries posed in the R.T.I Appeal, the Corporation has blithely stated that this information is not available with it as it is not a record and doesn’t need to be maintained by it for its regular functioning!

An Accounts Officer in the Corporation coolly informed me that since the arrears are not payable, they have not been accounted for!

The Supreme Court has mentioned in its judgment that wages are fundamental rights that can neither be waived off nor bartered away, and are in fact payable as the concerned employee was on the pay roll of the Corporation on the date from which the Charter payments were applicable. The fact that the payments were being made retrospectively was immaterial as the Corporation was responsible for the delayed payment.

Another shocking aspect:

This repudiation has been equally applicable for all the 4 nationalized insurance companies, LIC Housing Finance Limited, LIC Mutual Fund Limited and all associated companies, since 1^st August 1997.

Now estimate the mind-boggling amounts involved in this scam! My head is reeling!

If this public sector behemoth L.I.C of India doesn’t maintain its records scrupulously, is given to unethical practices like repudiation of fundamental rights like wages, in respect of its resigning ex-employees; encourages unnecessary litigation (increasing operational costs), evades payment of I.T. dues to the central exchequer and is not transparent in its functioning, what hope can its stake-holders have, for conduct of good business through accurate and statutory business practices? Of clear-cut profits?

If the wage revision arrears would have been paid in a timely manner, the need for their payment with interest today would have been avoided. If they had been accounted for, the massive efforts and time needed to compute all this data now, for payments; wouldn’t have been required. If it had remitted the requisite amounts to the I.T. departments then, it would have prevented the great losses to the central exchequer!

Being a trustee of the policy-holders’ money, L.I.C of India needs to have a professional approach with regard to management of its funds and regular functioning of its business. Above all, respect for its employees, who contribute to its profitability and glory!