How Should We Handle Union Requests for Service Weightage in Our Pay Agreement?

I'm working as an accountant in a manufacturing company. We have an employees' union in our company. We have signed an agreement with employees regarding pay hikes and other benefits. My doubt is on service weightage. We are providing Rs. 25/- per employee based on their completed service. Previously, we had an agreement in the year 2017. At that time, for an employee, for example, we paid Rs. 30/- per year for 10 years. Now, they are requesting the same for the current year's agreement (we proposed 3 years, but the union is requesting 10 years). Please advise me on how to proceed with this situation.

Thank you.

Understanding Service Weightage

Service weightage is a concept used to compensate senior employees based on the length of service rendered in the establishment compared to their juniors during every wage revision. This practice is generally followed when the labor force comprises different age groups. If you are regularly implementing it at every fresh revision of wages, there is no harm in continuing to do so. You can maintain the balance between the management's offer and the union's demand. However, to provide you with an appropriate answer to your query, we would need to know the number of employees in different age groups.

Thank you.

Dear sirs, We have given service weightage in 2017 at Rs. 30/- per completed service year (7 years). The employees' union is now asking for full years, including the last paid years. Do we need to pay for 10 years or the balance of years? I am attaching the employees' data herewith. Kindly advise further in this regard.

Regards, Lakshmana Murthy

Service Weightage Payment Structure

When service weightage is paid, it includes and provides for every completed year of service. However, there could be a graded scale. For instance, for the first 10 years of service, it could be Rs. 30 as has already been agreed. For those with more than 10 years of service, it could be a better amount (>Rs. 30) for the additional years put in, as could be agreed with the unions. This approach, instead of opting for a uniform rate for all years, will reward employees with longer service. Presently, the number of employees with more than 10 years is only two, so the additional outflow will not be sizeable now.

It does mean that we need to pay for 10 years (though we paid in the year 2017 for 7 years of service with gratuity). I am a little confused. Please help me out in this regard.

Regards, V. Lakshmana Murthy

In your post, it is revealed that in 2017, employees were paid 30 x 7 = 210/- as service weightage during the union agreement. Now, the union is demanding 10 years of service weightage, which is not the correct approach. You may agree to provide service weightage for the remaining 3 or 4 years at an increased rate instead of 30/- per year, possibly 40/- per year.

S K Bandyopadhyay (Howrah, WB)