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Thursday, May 13, 2021

Employee-friendly corporatisation

In improving efficiency of the Ordnance Factory Board, the government can allay workers’ fears by following the BSNL and SPMCIL precedent


Updated: September 17, 2020 6:37:30 pm
It is learnt that there is a proposal to set up an Empowered Group of Ministers (EGoM), inter alia, to facilitate the decision on the protection of employees’ interests. (Illustration by C R Sasikumar)

Written by Rajan Verma

Under the Atma Nirbhar Bharat package, the government has announced that to improve autonomy, accountability and efficiency in ordnance supplies, it would undertake the corporatisation of the Ordnance Factory Board. The employees have expressed discontent against the move and have given a notice to go on an indefinite strike from October 12. Their major fear is that the decision will impact their service conditions.

I am a retired officer of the Central Labour Services who devoted his entire career to ensure harmonious industrial relations. This involved looking after the well-being of workers, and keeping the morale and motivation of employees in good fettle. I have also played a key role as a mediator between employees and the government. In fact, when the corporatisation of the Ordnance Factory Board was mooted in August 2019, I facilitated discussions between the office bearers of the employee federations of the Ordnance Factories and senior officials of the Ministry of Defence. This led to the creation mechanism in the Ministry of Defence which facilitated continuous dialogue between officials and employee associations.

Let us examine how the government can ensure that employee interests are safeguarded?

In its 200-year old history, Ordnance Factories have travelled a long way from being under the Indian Army initially to the Department of Defence Production with a board structure. It’s a subordinate office under the department with personnel who are Government of India employees — the largest and oldest departmentally run industrial organisation in India. The Ordnance Factories Board is headquartered at Kolkata and comprises 41 factories spread over 10 states.

The total number of employees on the rolls of the organisation is 78,433 including Group A, Group B and Group C categories. They are Government of India employees and their service conditions are governed by CCS (CCA) Rules. However, as ordnance factories are also industry under Industrial Disputes Act 1947, provisions of other labour legislations are also applicable on them.

There have been recent instances of how the government has safeguarded employee interests in the corporatisation processes. The experiences gained while converting government departments as corporations — BSNL, formed out of Department of Telecommunication in October 2000 and Security Printing and Minting Corporation of India Limited (SPMCIL), formed by Department of Economic Affairs January 2006 — will surely be useful in the case of OFB.

In both cases, regular employees were given the option of getting absorbed in the company. However, in case a few employees intended to continue in a government job, they were to be deployed in another department or government organisation based on their qualification, experience and vacancies. If redeployment was not possible, then such employees were retained in the government’s surplus pool.

In the BSNL case, all employees have been absorbed in the newly formed PSU along with their posts on existing terms and conditions on an as is where is basis — it’s a deemed deputation, without deputation allowance as per the agreement with the Group C and D employees. The settlement ensured job security and also allowed the administrative ministry to retain power of reviewing the decision of removal/dismissal of any employee of the PSU. The employees were changed over to Industrial Dearness Allowance (IDA) pay scales, substantially higher than the government pay scale pattern and were given personal upgradation in the next higher pay scale – needless to say these were hugely beneficial to the employees. The promotions were made time bound at all levels for the employees being absorbed in the PSU in case of Group C and D employees. The government guaranteed the payment of pension to the employees under the provisions of the Rule 37-A of CCS (Pension) Rules. These packages benefitted the employees to the extent that all employees in the level of Group C and D have opted for absorption in the PSU.

In SPMCIL, in the matter of terms and conditions of permanent absorption of employees, a Memorandum of Settlement was created during the course of conciliation proceedings under section 12(3) of Industrial Disputes Act 1947 before the Chief Labour Commissioner. The employees were given the option to migrate to the wage pattern of PSUs (under the industrial dearness allowance pattern) along with special allowances, substantially higher than the government pay scales. The settlement guaranteed job security to all employees after corporatisation — under no circumstances, any of the employees would be retrenched even after absorption. Till the absorption process was completed, all employees would be kept on deemed deputation which means the government employees are allowed to work in the PSU by retaining their lien in the government jobs. The service conditions of all the employees on deemed deputation were to be fully protected, and after absorption, there would be no changes that were less favourable to these employees. Pension matters were also amicably settled. The SPMCIL corporatisation was successfully completed, about 16,500 employees exercised their option to get absorbed.

It is learnt that there is a proposal to set up an Empowered Group of Ministers (EGoM), inter alia, to facilitate the decision on the protection of employees’ interests which shall provide the best platform to facilitate a continuous dialogue process between the government machinery and the employee federations and unions to address issues of mutual concerns.

I am confident that the service conditions of existing employees will be protected suitably as has been done in the above cases and it will result in these employees reaping the fruits of corporatisation.

The writer is a former Chief Labour Commissioner

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