Dear experts,

Our long term settlement is already overdue by more than 4 years. During the LTS talks with the unions, the management has offered the salary fixation on a Notional Basic which is very low ,rather than on the last drawn basic at the end of the previous settlement. Ours is an oil company which follows DPE guidelines. Other oil companies who have signed their LTS, have salary fixation on the last drawn basic as per the DPE guidelines.

Is the management legally right in insisting on salary fixation on the Notional basic?

Companies are independent legal entities and their Board of Directors are competent to decide any matter pertaining to their company and their employees. DPE guidelines are for guidance purposes for the companies according to which ruling position of the Government departments are provided to them, as that prevails in the central or state Government departments. They  can also adopt, if they prefer, at their discretion, depending uon the circumstances and the financial position of the company.

So, if the employees feel that their demand is genuine, they can convince the management through their respective unions.