AIR INDIA LIMITED

General Category staff : Draft Revised Basic Pay & Allowances as on 1.1.12- Methodology adopted

Draft of the Revised Basic Pay(RBP) and Allowances of General Category staff as on

1.1.12 have been reworked as under for the purpose of inviting suggestions etc before it is

finalised:

1. Cost to Company for calculation of draft RBP

CTC is the sum of:

i) Old Basic Pay

ii) VDA as on 1.1.2012

iii) Notional HRA @30%

iv) All allowances applicable to the grade

v) Employers contribution to PF

vi) Considering the wide ranging PLI in the two erstwhile airlines within the

same grade across cadres/place of posting, it was considered necessary

to rationalise the amount of PLI for inclusion in the CTC. For this

purpose weighted average PLI has been taken. Weighted average has

been calculated for both WB and NB where more than one level of PLI

existed in a single Grade. Weighted average is arrived at by multiplying

each PLI value by the number of employees applicable and arriving at a

total for a Grade. The said Total is then divided further by the total

number of employees in the grade. The amount thus arrived at is

considered the weighted average PLI for that grade.

Illustration:

In WB Unskilled Category for S1 grade : -

Total Avg PLI @ 2622 for 60 employees = 2622 X 60 = 157320 Total Avg PLI @ 6992 for 38 employees = 6992 X 38 = 265696 Total Avg PLI @ 3466 for 14 employees = 3466 X 14 = 48524 Total Avg PLI @ 4370 for 309 employees = 4370 X 309 = 1350330 Total Avg PLI @ 8741 for 391 employees = 8741 X 391 = 3417731 TOTAL 5239601 TOTAL NO OF EMPS IN S1 GRADE 812

WEIGHTED AVERAGE PLI OF S1 GRADE WB = 5239601/812 = 6452.7 or 6453

Average PLI is the Average of PLI across Apr 11 to Mar 12.

The following values of weighted average PLI have been taken for computing

CTC.

The payments which are of the nature of temporary payments to the employees

have been excluded from the calculation of CTC.

Old Grade New Grade

Min Aver PLI

Old Grade

New Grade

Min Aver PLI

Old Grade

New Grade

Min Aver PLI

Unskilled Clerical and allied Operators

AI-WB/NB - grade waseMin aver PLI added to CTC for RBP

1 S-1 4515 4 S-2 5969 7 S-3 7118

2 S-1 4515 9 S-5 9442 8 S-4 8366

3 S-2 5726 11 S-6 10740 11 S-5 9442

7 S-3 7118 14 S-7 13087 14 S-7 13087

8 S-4 8366 25 E-0 13087

AI-NB - grade waseMin aver PLI added to CTC for RBP

1-2 Sr S1 4515 3-6 S2 5969 1-2 S2 5726

1-2 Hd. S2 5726 3-6 Sr S5 9442 1-2 S3 7118

1-2 Sr Hd S3 7118 7-8 S6 10740 1-2 S4 8366

1-2 Chief S4 8366 9 S7 13087 3-6 S5 9442

1-2 Sr Chief

S5 9442 7-8 S6 10740

9 S7 13087

9-A E0 13087

vii) All Reimbursements which were of non taxable nature and based on

actual use have not been included in the CTC. These elements would

not form part of the other allowances which is restricted to 50% of the

RBP as per DPE guidelines. However, reimbursements which were

taxable in nature have been included for calculation of CTC and would

form part of other allowances which were limited to 50% of RBP.

2. Computation of Revised Basic Pay

The formula for computation of Revised Basic Pay is as under:

RBP = CTC

2.5226

Where RBP works out less than the minimum of the scale, the same was

enhanced to the minimum of the scale and where it was more than the scale the

difference between the maximum of the scale and the RBP amount was

considered as Personal Pay of the officer.

3. Personal Pay

Initially when the revised basic pay and CTC of all employees was

computed in terms of the recommendations of JDC, several anomalies which

were not envisaged by the JDC were thrown up leading to a large number of

representations. The Implementation & Anomaly Rectification Committee

therefore reviewed the methodology of fixing the RBP as recommended by the

JDC in order to address the anomalies. The Committee came to the conclusion

that the large scale anomalies were as a result of varying nature of PLI which

varied from grade to grade, month to month and between the two erstwhile

entities. In order to mitigate this issue, it was decided that the PLI needed to be

rationalised. With this in view, it was decided that the element of PLI to be

added to the total emoluments should be minimum and common across the two

airlines in a grade so as to ensure that there was no variation in RBP within the

airline and minimal inter se variation in the two airlines. This ensured that the

anomalies get reduced considerably. At the same time so as not to reduce

the total emoluments on account of taking minimum average PLI it was decided

to include Personal Pay separately with the total emoluments worked out on the

basis of RBP so as to ensure that there was no loss in total emoluments for the

present.

The Personal Pay is the difference between the Average of the actual PLI

drawn by the employee during the period 1.4.2011 to 31.3.2012 and the lowest

average PLI in the grade for the period 1.4.2011 to 31.3.2012. This pay is

personal to the employee and shall not be considered for computing Revised

Basic Pay and will be shown distinctly. Any increase in the Basic Pay and VDA

and other allowances on the increased Basic Pay either due to promotion or

by way of annual increment, will be met from the amount of Personal Pay

wherever available.

4. Personal Pay qualifying for PF

While working out the Revised Basic Pay, it was noticed that there is a

reduction in PF contribution of the employer over the existing PF contribution.

The IARC considered the issues and decided to introduce an element of

Personal Pay qualifying for Provident Fund with a view to protect the existing

PF contribution of the employer. This pay is personal to the employee and shall

not be considered for computing Revised Basic Pay or any other allowances.

5. Rate of Increment

JDC report in that the Management may resort to granting annual

increment at the rate of 1% on the Revised Basic Pay till the company gets

EBIDTA(Earnings before Interest, Taxes, Depreciation and Amortization)

Positive; Grant of increment at 2% after it gets cash positive and grant of

increment at 3% after it reaches operational profit. This is being implemented

and annual increment rate will be dynamic and will be given each year according

to the above recommendations. Since the company turned EBIDTA positive in

the FY 2012-13, it has been decided to grant annual increment at 2% of the RBP

in 2013-14 and for FY 2012-13, increment shall be granted at 1%..

In the matter of promotion, the DPE guidelines dt.26.11.2008, lay down

that one notional increment equal to the increment drawn by the Executive in the

Pay Scale would be granted and pay fixed in the promoted pay scale and

rounded of to the net multiple of Rs.10. For fixing pay on promotion, it has been

decided to adopt rate of increment of 1% for the present. This will be reviewed in

the light of improvement in the financial health of the Company in due course.

On account of rationalization of PLI and to protect the total emoluments it

has been decided to include Personal Pay separately with the total emoluments

worked out on the basis of RBP so as to ensure that there was no loss in total

emoluments for the present.

6. Stepping Up Of Basic Pay

An exercise for stepping up of Basic Pay with respect to a junior within the same

Deptt./Cadre but in the erstwhile other company region-wise has been

undertaken after the proforma promotions have taken place. No stepping up is

admissible within the same airline. While undertaking stepping up of basic pay, it

has been observed that :

a) Employees who were on leave without pay for a long period or were absent for

long periods, which affect the date of annual increment would not be eligible for

stepping up pay on this account.

b) The benefit of stepping up shall not be extended to other employees with

reference to employees drawing higher basic due to grant of special or additional

increment for their excellence/outstanding work or for any other special reason.

7. Dearness Allowance

DA will be payable as per orders issued by DPE from time to time. The

rate of DA on the 2007 DPE payscale is 91.3% with effect from 1.7.2014.

8 House Rent Allowance

The House rent allowance shall be payable at the following rates as per

the classification and rates prescribed:

9 Provident Fund

With the revision of the Basic Pay w.e.f.1.7.12, the cases of employees who

have opted for percentage Voluntary contribution to the PF needs to be freezed.

This is recommended to avoid huge recoveries from the employees. A Circular

will be issued in due course seeking options from the employees for voluntary

reduction of PF consequent to the implementation of the RBP. Till such time the

existing amount will be deducted as PF contribution of the employee.

10. Pension

With the revision of the Basic Pay w.e.f.1.7.12, the pension of employees needs

to be freezed. This is recommended to avoid huge recoveries from the

employees. A Circular will be issued in due course seeking options from the

employees for voluntary reduction of pension consequent to the implementation

of the RBP. Till such time the existing amount will be deducted as pension

contribution of the employee.

BASED ON THE ABOVE, DRAFT SALARY STRUCTURE OF THE GENERAL

CATEGORY STAFF HAS BEEN WORKED OUT IN THE FOLLOWING

WORKSHEETS. REPRESENTATIONS/SUGGESTIONS, IF ANY, ON THE

DRAFT REVISED BASIC PAY MAY BE SENT TO THE EXECUTIVE

DIRECTOR(INTEGRATION), AIRLINES HOUSE, NEW DELHI WITHIN 21 DAYS

OF DISPLAY ON THE INTRANET.

*************

Annexure: -

Grade AI WB AI NB

Grade No of Staff Ave PLI -WB

Weighted Average

Grade No of Staff

Ave PLI -NB

Weighted Average

Min Wh Aver PLI

B: Unskilled

S-1 1 60 2622 6453 1-2 Sr 573 4515 4515 4515

1 38 6992

S-1 2 14 3466

2 309 4370

2 391 8741

S-2 3 60 4160 9687 1-2 Hd. 620 5726 5726 5726

3 97 5681

3 8 8741

3 908 10489

S-3 7 12 5026 11890 1-2 Sr Hd 362 7118 7118 7118

7 10 7430

7 5 10489

7 171 12674

S-4 8 151 5026 10577 1-2 Chief 1049 8366 8366 8366

8 116 7430

8 2 10489

8 574 12674

S-5 0 1-2 Sr Chief 24 9442 9442

2926 2628

C: Clerical and Allied Cat

S-2 4 0 3319 10534 3-6 1287 5969 5969 5969

4 12 6118

4 1 7867

4 26 12674

S-5 9 3 3639 10749 3-6 Sr 246 9442 9442 9442

9 10 5026

9 32 7430

S-6

9 20 7867

9 58 9178

9 137 12674

9 19 14422

11 4 4678 14037 7-8 651 10740 10740 10740

11 25 9615

11 52 11800

S-7

11 90 16170

11 21 17481

14 20 5892 14672 9 1938 13087 13087 13087

14 275 11363

14 152 14589

14 391 17481

1348 4122

D:Operators S-2

0 0 0 1-2 6 5726 5726 5726

S-3 7 0 12674 14422 1-2 36 7118 7118 7118

S-4 8 32 12674 14449 1-2 223 8366 8366 8366

8 33 16170

S-5 11 0 12674 17481 3-6 91 9442 9442 9442

11 104 17481

S-6 0 0 7-8 150 10740 10740 10740

S-7 14 25 14422 16991 9 68 13087 13087 13087

14 131 17481

E-0

25 0 14422 17481 9-A 20 13087 13087 13087

25 155 17481

566 594

4840 7344

12184