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An LTS clause has prompted BPCL workers to go on nationwide strike in Sep. What does it say?

In the run-up to the privatisation of BPCL, a clause placed in the LTS offer by the management has irked the trade unions

In the run-up to the privatisation of BPCL, a clause placed in the LTS offer by the management has irked the trade unions.
In the run-up to the privatisation of BPCL, a clause placed in the LTS offer by the management has irked the trade unions.
  • The unions have claimed that the clause is an “eyewash” as it makes the provision for the new owner to revoke or modify any benefit promised to the unions in the document

  • Alleging that the BPCL management is deviating from DPE guidelines, the trade unions have said that they have been constrained to go on a two-day nationwide strike

New Delhi: In the run-up to the privatisation of Bharat Petroleum Corporation Limited (BPCL), a clause placed in the Long-term Settlement (LTS) offer by the management has irked the trade unions and has prompted them to serve a two-day strike notice. The unions have claimed that the clause is an “eyewash” as it makes the provision for the new owner to revoke or modify any benefit promised to the unions in the document, which effectively nullifies the agreement. Alleging that the BPCL management is deviating from DPE guidelines to the workers and thereby, reducing benefits, the trade unions have said that they have been constrained to go on a two-day nationwide strike on September 7 and 8 to protest against the issue. The strike notice has been served by all trade unions at BPCL.

Clause has been placed in LTS to please BPCL’s new bosses: Unions

Aji MG, General Secretary of Cochin Refineries Workers’ Association, told PSU Watch, “At a meeting that the unions had with the BPCL Director (HR) with respect to this clause, the Director told us that the clause has been put at the behest of the Ministry. And there is nothing that can be done about it.”

Also read: Final tally: Around 1,800 at BPCL opted for VRS and 300 withdrew, say sources

In a letter written to BPCL CMD D Rajkumar, a copy of which was accessed by PSU Watch, MG said, “In the offer given by the BPCL management, Clause 1F is included prominently as a counter demand along with every benefit to give leverage to curtail or discontinue the benefit as per the Sale Purchase Agreement of BPCL on privatisation. This is not an acceptable clause since it is in a way urging the workmen to accept privatisation of BPCL and also ensuring tactic approval for reduction of benefit in future, on privatisation lawfully.”

What does the clause say?

According to the LTS document offer accessed by PSU Watch, the clause 1F says, “The two cardinal principles of Wage agreements are Capacity to Pay & Region-cum-Industry nearness, which always reflect and take into account the ongoing business cycle changes as well as important Organizational transitions of various kinds during the wage agreement period, including the fact as to which of the Corporate entities we are comparing with for applying these underlaying cardinal principles itself could very well change in view of the impending privatization of the Corporation. Full understanding and recognizing this fact, the Management reserves the right to review this MOA every three years from the start date of the MOA duration or as per the employment guarantees set out in the sale purchase agreement 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.”

The clause effectively means that the new owner of BPCL will be able to amend/ modify/alter the terms and conditions agreed to in the MoA as per the employment guarantees set out in the sale purchase agreement.

The backdrop

The Cabinet Committee on Economic Affairs had approved the sale of BPCL in November last year. Initially, the last date for EoI submission was May 2, but it was extended to June 13 and then to July 31. The number of shares that the government is looking to sell off stands at 1,14,91,83,592, DIPAM had recently said in a clarification to queries raised by bidders. The disinvestment of Numaligarh Refinery Ltd will be completed before the closing of BPCL privatisation process, DIPAM has said.

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