The Hindu Business Line : Tata Tea appeals to unions on equity in new venture

Warming up
Business model to involve partial employee ownership & participation.
Service conditions of the workers and employees will remain unchanged.
Union says workers' interest protected.

Kolkata April 2 Tata Tea Ltd has urged two unions - the Assam Chah Mazdoor Sangh (ACMS) and the Assam Chah Karmachari Sangha (ACKS) - to prevail upon all those employed in Assam gardens "not to be misguided, misinformed or misled by anyone" on the issue of equity participation in Amalgamated Plantations Private Ltd, the new company being formed with 20 tea estates in Assam and four in West Bengal.

Sustainability

In a statement, Mr Dipankar Borah, Vice-President (North India Plantation Operations), Tata Tea, said: "We believe that our unique business model involving partial employee ownership and participation, coupled with revenue streams beyond tea, will enhance long-term sustainability and trigger social transformation across the area."

He said: "The new model will allow employees to participate as owners and partner value creation for mutual benefit. We seek the co-operation of all stakeholders to foster the transformation and enable smooth and efficient transition of management to Amalgamated Plantations."

Service conditions

The statement added that the service conditions of the workers and employees to be transferred to the new company would remain unchanged.

Tata Tea and Tata Investment Corporation Ltd will participate substantially in the equity of the new company, with an agreement to purchase tea for packaged tea.

The IFC and IL&FS will hold significant equity stakes in the new company and will be supporting the interests of the enterprise; interest-free loans will be given to enable employees to purchase shares of the new company.

Significance

Tata Tea's appeal to the unions assumes significance in the content of reported reluctance of workers of the company's Assam gardens to pick up equity in Amalgamated Plantations; the transition is effective from April 1, 2007 subject to requisite approvals.

Mr Borah's statement makes it clear that Tata Tea and Amalgamated Plantations recognise only ACMS and ACKS as unions in Assam and would be willing to discuss or negotiate worker and staff issues, relevant in Assam, only with them.

ACMS commitment

Meanwhile, ACMS, in a letter to its branch secretaries located in Mangaldai, Borsola, Tezpur, Nagaon, Bokkahat, Golaghat, Jorhat, Dibrugarh, Paniotal, Margherita, Naharkatia and Sonari circles, has reaffirmed its commitment towards restructuring of the plantation operations.

"We have examined the matter and we wish to advise you that our workers' interest remain protected. The shareholding scheme is open for acceptance to the workers should they choose to participate."

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Tata Tea appeals to unions on equity in new venture