Employees Issues In Corporatization of Ordnance Factories- Rajan Verma

Recently, under the Atma Nirbhar Bharat package, the government has announced that to improve autonomy, accountability and efficiency in ordnance supplies, it would undertake corporatisation of the Ordnance Factory Board. The employees have expressed discontentment against the move and have given the notice to go on indefinite strike from 12th October 2020. The area of their major apprehension and fear is that the decision of corporatization will impact their service conditions.

I am retired officer of the Central Labour Services having devoted my entire career to ensure harmonious industrial relations by taking care of the well being of workers, which enabled in upkeeping in the morale and motivation of the employees. I have also played key role in various mediation and conciliations that resulted in amicable settlements. In fact when corporatization of Ordnance Factory Board was mooted in August 2019, I facilitated bilateral discussions between the office bearers of the employee federations of Ordnance Factories and senior officials of Ministry of Defence. We ushered in a mechanism in Ministry of Defence wherein the senior officials have engaged in continuous in dialogue/discussions with the employee unions to address the concerns raised by them.

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

Having 200 years old history, Ordnance Factories have traveled a long way from being under Indian Army initially to the Department of Defence Production with a Board structure. They are a subordinate office under the Department with personnel who are Government of India employees. They form the largest and oldest departmentally run industrial organization in India. Ordnance Factories Board is headquartered at Kolkata and comprises of 41 factories spread over 10 states.

The total number of employees of the rolls of organization is 78,433 including Group A, Group B and Group C categories. They all are employees of Government of India and their services conditions are governed by CCS (CCA) Rules but, 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 a process of corporatization. The experiences gained while converting government departments as corporations, viz. BSNL formed out of the Department of Telecommunication in October 2000 and Security Printing and Minting Corporation of India Limited (SPMCIL) formed by the Department of Economic Affairs January 2006, will surely be useful in the case of OFB.

In both cases, regular employees were given option to get absorbed in the company. However, in case a few employees intended to continue in a Government job, they were to be deployed in some other department or government organization based on their qualifications, experience and availability of vacancies. If redeployment was not possible, then such employees were retained in surplus pool of government.

In the case of BSNL, all the employees have been absorbed to the newly formed PSU along with their posts on existing terms and conditions on as is where is basis, on deemed deputation, without deputation allowance as per the agreement with the Group C & D employees. The settlement ensured job security in the manner by which the Administrative Ministry retained the 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 which were substantially higher than the Government Pay Scale pattern and were also given personal up-gradation in the next higher pay scale which was 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 & D employees. 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&D have opted for absorption in the PSU.

In SPMCIL, 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 the Industrial Disputes Act 1947 before the Chief Labour Commissioner. The employees were given the option to migrate to the wage pattern of PSUs [under Industrial Dearness Allowance (IDA) pattern] along with special allowances which were substantially higher than the government pay scales. The settlement guaranteed job security to all the employee’s post corporatization i.e. under no circumstances, any of the employees would be kept on retrenched even after absorption. Till the absorption process is completed, all employees would be kept on deemed deputation which means the government employees are allowed to work in 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 there shall be no changes in the same which will be less favorable to such employees even after absorption. Pension matters were also amicably settled. SPMCIL corporatization was successfully completed where 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 decision on the protection of employees’ interests which shall provide the best platform to facilitate continuous dialogue process between the Government machinery and the Employee Federations and Unions to redress issues of mutual concerns.

I am confident that the conditions of the service 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 corporatizations.

Writer-  Rajan Verma, Former Chief Labour Commissioner 

Leave a Reply