ISLAMABAD, Feb 4: The Privatization Commission (PC) has asked the management of Pakistan Steel Mills Corporation (PSMC) to “hold an urgent dialogue” with the employees unions and associations of in order to expedite the transaction that has once again been delayed.
The PSM chairman was asked by a senior PC official through a letter, the copy of which was also made available to Dawn, to convince the unions and associations in favour of privatizing the Mills without further delay. The PSM was to be privatized by Dec 30 2005, but it could not be disinvested on Jan 31, 2006, as was promised and no new date has been given by the PC in this regard, although five bidders had been pre-qualified for the sell-off.
“The potential bidders regard agreement with unions and associations as a critical issue and, therefore, it has to be included in the draft share purchase agreement (SPA) to be released to the bidders on Feb 6, 2006, in order to ensure deposition of earnest money by Feb 15, 2006,” the letter signed by Mr Manzoor Zuobair said.
The letter also enclosed the details about the demands of Mills’ employees for privatization. The employees demanded that if the concerned authority declined the request of any employee for the golden handshake Scheme (GHS) due to any reason, then it should be ensured that the services of that employee will not be terminated at least for five years or till his retirement whichever is earlier. “The services of such employee can only be terminated by paying GHS/VSS (as per the PC policy) by the new owner.”
However, they said that the demands of the employees in this regard can be accepted with the provision that the termination is not due to disciplinary reasons. This is in that backdrop that if due to any reason the new management wants to discontinue/terminate the services of such an employee before five years, then he should be benefited with the same payments/facilities of the GHS.
The PC maintains that no commitment can be made on behalf of new owner in the post privatization scenario. But said, as per bidding documents, there shall be no reduction in salary and perquisites for one year.
Regarding the demand that at least 20 per cent of stock shares be offered to all employees (officers and workers) on basic rate, the PC said that 7.5 per cent shares (10 per cent of the shares being offered for sale) can be offered to the employees at discounted price.
The employees were told that the existing bidding documents cater for one year job security instead of five years as demanded by the workers of the steel mills.
The PC also maintained that the workers opting for GSS are entitled to normal retirement benefits, plus four basic salaries for each completed year of service. Only cost of living allowance and indexation, if any, can be added in basic pay, irrespective of age. The workers had asked for an amount equivalent to 1x6 months gross salary, i.e, basic pay, house rent plus conveyance allowance and other admissible allowances) for each completed year of service for the employees below the age of 58 years.
On the demand that a lump sum amount be allowed against medical facilities and be calculated under existing medical bills, the PC maintains that this demand does not relate to the GHS/VSS. Medical benefits can be extended in accordance with the existing policy of VRF, wherein the employees are entitled to medical facility for a period of one year only.
The employees demanded that the board of trustees of Hadeed Welfare Trust or any body formed to look after the affairs of Steel Town, hospital, educational institutions and non-core land, the strength of the employees representative bodies i.e. trade unions, officers associations should be more than 50 per cent.
“This proposal does not seem practicable as the employees of the privatized Pak Steel and the body formed to look after the affairs of non-core assets will be two separate entities having different objectives,” the PC replied.
The employees pointed out that the severe punishments given by the previous management such as dismissals, termination, demotion and deduction of increments to a number of employees for no fault of theirs and most of these punishments were highly unjustified. Still, a large number of such employees, who were rewarded these punishments are serving in Pakistan Steel. Their genuine grievances be resolved prior to privatization. On this point the PC replied: “The management should continue the existing policy.”
The PC did not accept the employees’ demand that the gratuity earned by the employees should be paid on the gross salary basis. It said that the gratuity is accrued and paid on basic salary. A change to the gross salary basis will increase the company’s liabilities by Rs3.606bn. “It can not be accepted as the GHS/VSS liability will increase by 2.4 times, in addition to the company’s liability by Rs3.606 billion,” the PC said.