8th Pay Commission Terms of Reference Row: Various employee unions have been demanding from the government some major amendments to the Terms of Reference (ToR) for the 8th Pay Commission. Many employee representative bodies and trade unions have alleged that the government has kept around 69 lakh pensioners out of the purview of the new pay panel and has not mentioned the recommendations’ implementation date in the ToR.
Some unions have given a call for protests against the government’s move to unilaterally decide the blueprint for the new pay panel, which was appointed earlier this month. The government has maintained total silence over the unions’ demand to amend the ToR and add their suggestions.
Now, all eyes will be on the Winter session of Parliament, starting December 1. It is expected that Finance Minister Nirmala Sitharaman will address some of the concerns raised by these unions and employees’ representative bodies. Like previous Parliament sessions, there will be several questions around the 8th Pay Commission, and this time, members are expected to raise queries around the Terms of Reference anomalies as flagged by unions.
Besides the ToR, there have been several long-standing demands of central government employees related to pension, DA and other retirement benefits. These issues are set to take centre stage in Parliament on December 1, 2025. For example, a written query posed by MP Anand Bhadauria has sought clear answers on two major issues: the constitution of the 8th Central Pay Commission (8th CPC) and the merger of Dearness Allowance (DA) with basic pay as an immediate relief measure.
The government has already uploaded hundreds of member questions on Lok Sabha and Rajya Sabha portals.
The current pay structure, based on the 7th Central Pay Commission (implemented from January 1, 2016), is nearing its typical 10-year cycle. Historically, a new pay commission is set up once every decade, making 2026 the natural year for a new review.
For nearly one crore central government employees and pensioners, this parliamentary response will be a key to understanding the government’s perspective on the whole row that erupted after the ToR notification. Among the various issues around which the government’s response will come, some immediate and crucial questions would be around 8th CPC ToR and DA merger issue.
Two key questions: 8th CPC ToR anomalies and DA Merger
Employees have been increasingly anxious as unions allege that the government has deliberately changed the wording of the ToR to exclude around 69 lakh pensioners from the pay commission benefits.
It has to be seen how the government responds over these ToR allegations.
The second important question pertains to the merger of DA and Dearness Relief (DR) with basic pay. This is one of the most pressing demands from employees’ unions, who argue that DA increments have failed to keep pace with actual retail inflation over the last three decades. With DA now having crossed a threshold that previously required a merger, employees believe the government must step in with an immediate relief measure.
The government has to answer if there are any plans for such a merger, and if so, what the implementation timeline might be. If not, the government is expected to offer reasons for rejecting the measure.
Employee groups say inflationary pressures have eroded real wages, and the current mechanisms are no longer adequate. The last DA merger took place in 2004, ahead of the 6th Pay Commission, and led to a direct salary boost and improved retirement benefits since most allowances and pension components are calculated based on basic pay.
With DA crossing significant levels — something unions say should automatically trigger a merger — the demand has intensified. Unions argue that without a DA merger, employees are effectively losing purchasing power every year.
Unions issuing threats and demanding ToR amendments
In recent weeks, central government employee unions have escalated their pressure on the Centre, warning of coordinated protests if the government does not respond positively. Several employee federations have demanded that the Terms of Reference for the 8th Pay Commission must be reworked to fix anomalies.
Some of the key demands include:
-Scrap NPS/UPS and restore OPS for all.
-Improve fitment factor to ensure proportionate increases across all pay levels.
-Immediate merger of DA with basic pay as the DA has crossed 50%, restoring the earlier practice.
-Revise the Pay Matrix structure to address stagnation and slow career progression in several departments.
-Stop creating distinctions among pensioners.
-Release the 18 months of pending DA/DR from the pandemic period.
-Remove the 5% cap on compassionate appointments.
-Fill vacancies, stop outsourcing and corporatisation.
-Restore recognition to unions and stop “victimisation” of union functionaries.
-Implement long-pending arbitration awards.
-Regularise contractual and contingent workers.
Employee bodies state that these reforms are overdue and fear that without changes in the ToR, the upcoming commission may repeat previous inconsistencies. Many federations have warned of mass demonstrations, including nationwide marches and service-wide agitation, if the government remains silent.
A crucial moment for employees and the government
The 7th Pay Commission is about to complete its term on 31st December 2025. Ideally, the 8th Pay Commission should start from January 1, 2026, but considering the delay – first in announcing the panel and now in finalising ToR and members’ appointment – in the entire process, it might take at least 24 months before the recommendations are finally implemented.
Amidst all this ToR row, uncertainty has caused considerable discontent among staff. The government’s response, however, is expected to provide the clearest indication yet on the whole issue.
For now, all eyes are on December 1 — when employees, pensioners, unions, and policy observers will be awaiting answers from the government that could shape pay structures, allowances, and retirement benefits for over 1 crore employees and retirees for the next decade.
