Dear Experts:
The Management has entered in to wage settlement under section 18(1) of the I.

Dear Experts:
The Management has entered into Long Term wage settlement under section 18(1) of the ID Act with the Union which is in force. By arriving at wage settlement every time a considerable increase in com each of the component of wages, the senior employees would get a high wages due to their long stint of service. However, there are some grievances among the senior employees that such entering wage settlement every gap of years, the increase in the components of wages would also applicable to the newly confirmed employees who are very Junior to the employees, it causes grudges among the senior employees that there are no much difference in wages drawn bwtween the senior employees and the very Junior employees i.e the newly confirmed employees. In view of differentiate between Junior and senior employees, the Management would prefer to go in for an amendment in settlement already entered to set right the thing in a way to differentiate the senior and junior employees.

1) Whether the management can go in for an amendment in Long Term settlement to modify the wage structure in order to differentiate between the Senior and Junior employees by protecting MW Act requirement?

2) When the Union is in agreement with this move of the Management in making amendment in the LTS in order to satisfy the senior employees, such amendment in LTS is legally valid?

3) Will it not be amounting to discrimination in wages payable to Junior employees?

Please advise.

Thanks & regards,

V Sridhar

From India, Mumbai
Management Consultancy


1. Many organisations have a pay factor called service weightage, which is a slab arrangement in which as the employee moves from one slab to another slab based on completion of a fixed number of years, the Service Weightage amount also enhances. For eg., the employee who has completed 9 years of service may start getting Service Weightage Sum of X+ whereas the employee was getting Rs. X till now. You can work out a table enhancing the Service weightage after completion of every bandwidth of service, liike 0-5, 5-10, 10-15 etc
2. Parties to an agreement can any day amend any clause of agreement mutually. Enter a fresh agreement adding this clause and specifically mentioning that all other clauses of the original agreement will be valid and in force.
Since there is only an increase in wages and no prejudice is caused, so it will not amount to any breach of agreement even in the absence of agreement. This can also be a unilateral announcement by the management without involving the unions.
3. Employees with longer years of service get higher pay is a natural phenomenon, even within the same grade of pay. It is not a discrimination which is frowned by the Courts

From India, Mumbai

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