Sail's Voluntary Retirement Scheme

The Reaction

The trade unions were on a warpath against the recommendations of McKinsey. Posters put up by the Centre of Indian Trade Unions (CITU) at SAIL's central marketing office said that the McKinsey report was meant, not for the revival or survival of SAIL, but for its burial. A senior TU leader said: "SAIL TUs so far have been extremely tolerant and exercised utmost restraint. Even in the face of scanty communication by the management of SAIL, they have not lost patience in these trying times." The TU leaders felt that SAIL would try to bolster support for the financial restructuring proposal based on the recommendations of McKinsey.

But being a government-owned company, SAIL cannot take decisions on such recommendations as the privatization of SAIL or breaking it up into two product-based companies. Even in relatively small matters the like hiving off of power plants to a subsidiary company, with SAIL being the major partner, the government had not cleared SAIL's proposal, even after months of gestation. Therefore, it was futile to think that SAIL would secure the permission of the government to sell off Salem Steel Plant (SSP) in Tamil Nadu or close down Alloy Steels Plant (ASP) at Durgapur in West Bengal.

At SSP, all the TUs had joined hands to form a 'Save Salem Steel Committee' and observed a day's token strike on June 24, 1999, demanding investment in SSP by SAIL, rather than by a private partner.

Though TUs had no objection to voluntary retirements, they were not very happy about the situation. They were worried that employment opportunities were shrinking in the steel industry and that reduction of manpower would mean increasing the number of contractors and their workforce. After the Rourkela Steel Plant in Orissa absorbed contractors' workers on Supreme Court orders, fresh contractors had been appointed to fill up the vacancies. SAIL TU leaders were emphatic that the McKinsey recommendations were not the last word on SAIL.

They felt that foreign consultancy firms were unable to appreciate the role played by major public sector units like SAIL or Indian Oil in the growth of the Indian economy. They alleged that since large public sector units had shown they could withstand the onslaught of the multinationals, efforts were being made to weaken them, break them into pieces and eventually privatize them. On February 17, 2000, workers at SSP went on a strike against the government's decision to restructure SAIL. The strike was called by eight unions affiliated to CITU, INTUC, ADMK and PMK. CITU secretary Tapan Sen said: "The unions are going to serve the ultimatum to the government for indefinite action in the days to come if this retrograde decision is not reversed. Demonstrations were held against the government's decision in all steel plants and workers of Durgapur would hold a daylong dharna. Steel workers all over the country, irrespective of affiliations have reacted sharply to the disastrous and deceptive decision of the government on the so-called restructuring of SAIL."

Case Details

Case Code : HROB002
Themes: HR Practices and Policies
Case Length : 07 Pages
Period : 1999-2001
Organization : SAIL
Pub Date : 2001
Teaching Note : Available
Countries : India
Industry : Metals & Mining

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