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In 2007, the Indian subsidiary of a multinational refinery became a Government of India company. The government company had announced an ambitious expansion programme which meant doubling the work force in less than four years. In 2007 at the time of wage revision, the union and management agreed to a two-tier pay structure. Those already employed will be eligible for a higher grade and those who are (to be) recruited afresh will get a lower grade though jobs are similar in skill, responsibility and effort. Both the union and the management justified that this is an innovative practice widely followed in deregulated companies abroad, particularly the airlines in North America.
a) Is it fair agreement?
b) Would it contravene with the concept of equal pay for equal work?
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