Retirement, Yes Voluntary, No

A major discontent is brewing across companies and industries in liberalised corporate India. Discontent among workers who have been offered the golden handshake by their providers in an effort to be lean and mean in the marketplace. Workers of companies ranging from Hindustan Lever (HLL) to Pfizer and Nicholas Piramal (NP) to Biddle Sawyer (BS) have moved court to fight a long battle over the voluntary retirement schemes (VRS) offered to them. A fight that has every sign of turning bitter.

Because, despite certain legal verdicts, the crux of the matter - a proper labour policy - is untouched. "Voluntary retirement schemes are neither voluntary nor retirement schemes," asserts Bennet D'Costa, secretary, Hindustan Lever Employees' Union. A charge to which there is no easy answer.

Workers say the schemes will be voluntary if an individual opts to quit. But in many companies, the management decides unilaterally on VRS, as also how many, and who, are surplus. This, they allege, is tantamount to retrenchment. If the identified group doesn't comply... "they first take away your work and then tell you that you are surplus," says a leader of the NP union.

Workers allege that VRS comes in handy for companies to pare down costs and not to offer value to the consumer or shareholder. Especially for profitable, well-growing companies like Pfizer, Siemens, HLL, NP or Glaxo. Glaxo bought BS because of its profitability and potential. Why then the need to get rid of its workers? The NP union says despite production moving to backward areas to cut costs, prices of Albucle eye drops and Orthobid increased by 10-25 per cent. Managements, they say, want to shut down units and do away with organised labour without taking recourse to the tedious official procedure for closure.

But why wouldn't workers want VRS which offers a lump sum plus benefits like pension? That's misleading, argue unions. Thanks to inflation, the lump sum doesn't stay long. Take for example an HLL worker earning Rs 8,000 a month. If he opts for VRS, he gets a lump sum of Rs 5 lakh and a pension of Rs 3,000. But he loses Rs 23 lakh if one adds up his balance service pay, provident fund and gratuity. Ten years from now, his salary would be Rs 21,000. Unions say 90 per cent of separated workers, driven to penury, try to get their jobs back.

Most managements Outlook approached refused comments on the issue saying it was "sub judice", "painful" or "would rake up the dead". Some others like Irfan Khan, HLL spokesperson, were more forthcoming. Says he: "We identify those we don't need but the scheme is completely voluntary and we give them all help possible." And companies do have to get more competitive. Says TISCO spokesperson Sanjay Singh: "New production facilities need a leaner workforce. Modern technology with a higher degree of automation requires different educational qualifications, skills and attitudes." Indian labour is cheap but not too productive. In backward areas, the first-generation factory workers are more productive than more expensive city workers. A culture of lethargy, says Khan, prevailed in Tomco's units and HLL had to separate 5,000 workers.

HLL has eased out 15,000 workers from its own units and from acquisitions - Lakme and Tomco. Why did they opt for VRS if they didn't find it lucrative, asks Khan? Unions, feel managers, like to hold back workers as they lose their strength otherwise. The Lever union bank balance runs into crores of rupees and its leaders travel in luxury for court cases and other union engagements. In '86, Datta Samant, then Mumbai's most powerful TU leader, asked for a Rs 7,000 monthly raise when the norm was Rs 100-200 per three years. A deadlock with the textile mills rendered 2.5 lakh workers jobless.

P.V. Nayak, director with BS group and Glaxo, explains that since BS' systems and procedures had to be aligned with that of the parent company, a VRS was offered. In companies, the issue can be resolved by offering part-time work to a larger group of workers, but it's not possible in a factory. They sound off the unions, albeit informally. Nayak says it's futile to discuss with external unions - BS workers have aligned with TU leader R.J. Mehta. But Khan and Nayak agree that VRS is the only legal method open to companies seeking to restructure. "That the government has exempted payment of income-tax under approved VRS shows it supports restructuring through one-time separation payment," says Nayak.

Contesting the charge that HLL is trying to cut its labour force, Khan says the number of workers has gone up from 10,000 to 35,000 in the past few years. "We grow jobs. For every employee we hire, we generate 80 jobs outside HLL," he adds. Managements claim they sincerely help workers and try to retain employees by transferring them to other job functions or locations, which is not acceptable to workers. HLL tried to transfer people to a site near Nashik but the union took the matter to court. Siemens has helped set up a cooperative for separated workers and gives them job work earlier given to contractors. It's going to lease its machinery and tools. Of the 300 workers who took VRS, 51 were accommodated in the first phase. TISCO, known for its sound industrial relations with not a hitch in 70 years, offers medical facilities, refundable loan, house rent allowance, education facilities for children, besides pension and severance package. "No other company, I think, offers such a liberal scheme," says TISCO's Singh. Between '96 and '99, TISCO separated 22,000 workers.

But workers dismiss the Siemens deal as a carrot to ease out staff. HLL union sources claim that whatever the public postures, managers use terms like "go unilaterally and rely on money power", "make life difficult and uncertain" and "create insecurity" in internal e-mails. A Glaxo internal memo dated November 3, '97, marked "strictly confidential", from one senior manager to a director asks whether the company should follow its advocate's advice to delay the BS merger. The director's handwritten reply on the memo reads: "We'll delay merger as long as it takes to sort out the...employees. Can't sacrifice the long-term for short-term benefits." BS workers say that as long as the formal merger is delayed, they can't make claims on jobs in Glaxo. And Glaxo argues that since BS workers don't belong to it, why should it house them?

The only solution: a clear exit policy. It has been a touchy issue for every government. Especially in the absence of social security schemes for the jobless. But short of taking the bull by the horns, there seems to be no end to this golden tangle.