The Telegraph
Since 1st March, 1999
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Modern Foods, Balco back in spotlight

New Delhi, Aug. 14: The government has ordered a fact finding committee to go into the allegations that Sterlite Industries and Hindustan Lever have violated agreements they signed with the government on protecting workers’ rights in Balco and Modern Foods, respectively.

Disinvestment minister Arun Shourie told the Lok Sabha today that a committee comprising representatives of trade unions, employers and the government was set up following a meeting Balco and Modern Foods union leaders had with the Prime Minister last year and it was expected to submit its report soon.

Trade unions have alleged that workers of the two companies have been retrenched without a fair deal and in some cases forced to accept VRS. Balco’s union has alleged that most operations out of Balco’s Delhi office were shut down forcing people to either shift to Korba in Chattisgarh or accept VRS.

The unions have also alleged that Modern Foods, which was bought over by Hindustan Lever, had sold off assets and discontinued its bakery business in violation of the terms of the shareholders agreement, in the post disinvestment period. Adding fuel to fire, media reports indicate HLL will eventually phase out “sub-brands like Modern bread”, the staple production of Modern Foods Industries Ltd.

Shourie made his statement in the lower house in reply to a calling attention motion tabled by Basudev Acharya (CPM) on violation of agreement on workers’ interest by the management of the two divested companies. The statement was laid in the house but was not discussed as the house was in pandemonium over allegations concerning a public accounts committee report on defence deals.

However, the minister defended the change in management claiming the profitability and performance of the two former state-run companies had improved considerably after disinvestment. Adding carefully that he had been told that Balco’s capacity will be growing four fold and new investment to the tune of Rs 6,000 crore was being infused into it.

But at the same time Shourie also claimed that Sterlite has been forced to implement its voluntary retirement scheme in Balco which is being paid in five installments as the aluminium major is “cash strapped due to a 67-day strike immediately after disinvestment”.

The disinvestment minister also claimed that the average level of wages at Modern Food has gone up from Rs 6,200 a month per worker at the time of disinvestment to Rs 8,000 a month now.

Many lower house MPs remained unhappy with Shourie’s statement and later said outside the house it seemed more an apology for the new owners rather a real attempt to take any convincing measures to stop “anti-labour steps.”

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