Govt’s disinvestment policy must address HR issues

The biggest challenge for the government in successfully implementing its strategic disinvestment programme would be dealing with the employees of the entity going under the hammer.

Should there not be a clear guidance on how to deal with this critical human resource asset of the organisation being sold? Should not the government as the promoter talk to the employees first and prepare them before taking this decision?

There is a clear-cut difference between disinvestment and ‘privatisation’, and therefore if the employees of the profit-making Bharat Petroleum Corporation Ltd (BPCL) raise their voice against the government decision or oppose the voluntary retirement scheme (VRS) floated by the company, then one shouldn’t be surprised. BPCL disinvestment is to happen in two parts: Strategic disinvestment of the government’s shareholding of 53.29 per cent — except BPCL’s equity shareholding of 61.65 per cent in Numaligarh Refinery Ltd (NRL) and management control thereof; and BPCL’s shareholding of 61.65 per cent in NRL along with transfer of management control to a central public sector enterprise operating in the oil and gas sector.

BPCL has 6,500 management staff and a similar number of non-management staff. The change of guard at NRL may not be that much of challenge as in all likelihood it will go to a domestic oil company, and if reports are to be believed Oil India Ltd and Engineers India Ltd-led consortium will buy the stake.

But the strategic sale of BPCL will be a challenge as it has to be done in a transparent manner, so that later it does not come back to haunt those involved with the process. Depending on the competitive intensity during bidding, the proceeds the government is likely to garner from a full-stake sale could be in the range of ₹55,000 crore, going by the current market price.

Once there is a complete change of management, it is up to the new owner to decide whether there is room for existing employees or not. “The government’s strategic disinvestment policy currently enables a maximum of one year’s protection to existing employees. In one case it was extended to two years, that too at the request of the new owner who wanted the employees to stay,” recounted a senior officer who had been associated with the process earlier.

Human resource is a critical part of any organisational restructuring and, therefore, a policy is needed.

So, can the government or for that matter any owner assure job guarantee to the existing employees. In January, BPCL employees, through their union, had written to the management that they should be given job protection (depending on the existing service conditions) till they retire and a minimum five-year embargo on hive-offs by the new owner.

According to those in the know, the management had communicated the same to Department of Investment and Public Asset Management, Ministry of Finance. No official word on it has come as yet. An argument can be that BPCL is a Maharatna and high-profit making PSU, hence the yardstick used for others cannot be applied to it.

The risks to morale, leadership, and the larger implications to culture and performance are significant, says an HR expert. Since the government needs to ensure that BPCL is not a distress sale, it is all the more important to ensure that the process is concluded without any political undercurrent.

The government needs to work on a mechanism wherein before it takes decisions like strategic sale, employees are made partners in the whole process.