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Spat between workers, management of BPCL intensifies as company nears privatisation

?P Manoj Mumbai | Updated on July 20, 2021

Dispute over long-term wage pact for workers to be referred to Industrial Court in two weeks, Centre’s counsel tells Mumbai HC

The tussle between the management of Bharat Petroleum Corporation Ltd (BPCL) and workers at its Mumbai and Kochi refineries over a long-term wage pact, post retirement medical benefits and other issues has intensified as the government looks to complete the privatisation of the ‘maharatna’ state-run oil firm by March next year.

The management and the workers have been on the confrontation path after the government decided to privatise the oil company in November 2019.

The workers unions have resorted to at least six strikes in Mumbai and Kochi since November 2019 and had filed a slew of petitions in the Mumbai and Kerala High Courts to realise their demands.

During a hearing last week on a petition filed by the Petroleum Workmen’s Union of Mumbai refinery, the Central government’s Counsel told the Mumbai High Court that the dispute over finalisation of long-term wage settlement for workers “will be referred to the Industrial Court within a period of two weeks”.

After recording the statement of the government’s Counsel, the Court in its July 17 order further directed “the concerned Industrial Tribunal to decide the application for interim relief within a period of eight weeks from the date of filing of such application seeking interim relief in the said reference”.

The Petroleum Workmen’s Union filed the petition citing delay by the ministry of labour and employment in referring the dispute to the Industrial Tribunal after the conciliation officer at the Labour Commissioner (Central-I), Mumbai office submitted a failure of conciliation (FOC) report on March 30 this year to the secretary in the ministry.

The ten-year wage agreement for refinery workers was due from August 1, 2018 but has been delayed.

The workers are challenging three contentious issues in the memorandum of agreement drafted by the company on wage settlement.

Clause 1 (f) of the Memorandum of Agreement (MoA) on wages and other matters states: “The management reserves the right to review and revisit the MoA once every three years, with first such review due w.e.f. 01.06.2022, and/or as per the terms set out in the Share Purchase Agreement (or any other documentation pursuant to which the privatization of the Corporation is recorded) whichever applies and wherever required amend/modify/alter the terms and conditions agreed to in this MoA based on profitability, capacity to pay, affordability, sustainability, least cost methodologies deployment, market determined compensation structures & any other factors that may arise. Management shall give 90 days' notice to the Union(s) signatory to this MoA before invoking this clause.”

The workers union claim that this clause grants “unilateral powers to the management” to make changes in the wage agreement from June 1, 2022 and hence was not acceptable to them.

The other issues relate to Dearness Allowance neutralization, fitment and pay scale.

“The Management consistently maintained their stand (during the conciliation proceedings) that the clause 1(f), 95% DA and 12% Fitment benefit and pay scale maxima of Rs 1,36,000 (later revised offer was Rs 1,45, 000/- for Grade 9) is the basic framework of long-term settlement and are non-negotiable and they have nothing more to offer on their part,” according to the July 17 order of the Mumbai High Court.

The unions have sought 100 per cent DA merger and 15 per cent fitment, similar to what was signed by other oil PSUs as per norms of the Department of Public Enterprises.

The BPCL management had earlier sought to discourage workmen from resorting to agitations in the run-up to the privatisation of the company by linking the offer of shares under the employees’ stock purchase scheme (ESPS) “to the applicant not being party to any challenge to the proposed strategic disinvestment of BPCL, whether individually or through any collectives, and whether by way of any litigation or by way of any representation/complaint to any Authority whomsoever”.

The workers unions at the Kochi refinery have also challenged the management’s decision to exclude employees with less than 15 years of service on June 1, from the scope of the re-worked post-retirement medical benefits scheme (PRMBS).

On July 15, the Kerala High Court, in an interim order, admitted a writ petition filed by workers and unions at the Kochi refinery challenging the changes made by the state-run oil firm in the eligibility conditions for coverage under the post-retirement medical benefits scheme and deferred its implementation by two months.

On July 16, the management, however, informed all employees with less than 15 years of service on June 1 (excluding Kochi refinery workmen) that the past contribution towards the scheme by the company has been transferred to the respective trusts administering the National Pension Scheme, implying that the revamped scheme has come into force.

The oil refining and marketing company has also put on hold interviews for promotion of general workmen, some of whom have been in the current post for more than the mandatory three-year period to become eligible for promotion.

Published on July 19, 2021

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