How Is Pay Fixed After a Promotion in PSUs? Seeking Guidance on Legal Methods

Dear Sir/Madam,

Correct Method for Fixing Pay After Promotion in PSUs

Can anyone suggest to me what the correct/legal method is for fixing pay after a promotion in PSUs? For example, if a non-executive employee gets a promotion to the Executive cadre in his/her organization. His/her basic pay in the Non-Executive cadre was Rs. 24,000 per month, and he is being selected for the E-2 grade in the pay scale of Rs. 20,600-40,000.

My question is, what would be his basic pay after the promotion, and how can this be fixed? Kindly guide me on the correct method according to the law, and in promotion, what is protected - basic payment or gross payment? Kindly shed light on this.

Thank you.

You have mentioned the old basic as Rs. 24,000 and the new scale as Rs. 20,600 - 40,000. However, in both cases, you did not provide the increment rates. For pay fixation, an increment is required, so please provide the increment rates for both scales. Additionally, please clarify whether an annual increment is due at the time of fixation.

Regards,
Abbas. P. S.

Thanks, Abbas Ji, for your prompt reply. The annual increment rate is 3%, which is given every April of the year. I hope this information will help you. My question is, can the time of promotion from non-executive to executive cadre result in a reduction in the basic compared to the earlier basic?

Your basic pay will be protected. However, in the case of gross salary, if there are some benefits for non-executives that do not apply to executives, there is a chance of drawing a lower salary than before.

Regards,
Abbas. P. S

Thank you for your reply. It means that the basic salary cannot be reduced in any case; it should be protected. Our organization has drastically reduced the basic salary and implemented a formula stating that the Gross Salary is protected. While the Gross Salary is protected, according to my understanding, the Basic salary cannot be reduced (FR-C). The annual increment we receive is our hard-earned money, reflecting our experience and tenure within the organization.

Kindly shed some light on this matter as well.

Thank you.