June 7: Hindustan Motors has begun the process of laying off senior managers and executives, prompting the government to question the number of employees apparently selected and some staff members to weigh legal options.
The loss-hit Hind Motors’ decision comes at a time the state government has initiated talks with it and convened a tripartite meeting that includes the unions.
Hindustan Motors sources said the company had started sending letters to 310 “management and executive” staff members, mentioning that their “employment” would “come to an end” after the expiry of their notice period. Some of the 2,600 employees at the Uttarpara plant said their notice period had ended this month but the letter does not mention any date.
Labour minister Purnendu Bose said Hind Motors’ decision to lay off employees showed that the company had “no real interest” in resuming operations at Uttarpara.
Bose questioned the ethics of the lay-offs at a time the government was holding meetings with the management to keep the plant afloat. He expressed “amazement” at how there could be 310 “management and executive staff” among 2,600 employees.
“A management includes board members, owners, top executives and key decision-makers. There cannot be 300-plus such personnel in a set-up of 2,600,” the minister told The Telegraph.
An employee who has received the letter said: “We will approach the high court. We don’t even know what kind of severance package they (company) have finalised.”
Citing reasons such as the “very difficult phase” the automobile industry was going through globally, an “unprecedented financial situation” and the plunge in the demand for Ambassador cars “to the lowest possible numbers”, Hindustan Motors said in the letter that manufacturing operations had become “financially and economically unviable”.
“As the operation is not there, there is no cash inflow to the company, and it is not feasible for the company to carry on with such a huge number of employees and to maintain them,” the letter says. Work at the Uttarpara plant was suspended on May 24.
The management, according to the letter, has decided to maintain a “skeletal organisational structure to carry on with the day-to-day activities”. The letter says “very few employees” will be retained.
It adds that the employees would be paid their “accrued entitlements and any outstanding pay”. The Uttarpara plant, it says, posted losses of Rs 90 crore in the 2013-14 financial year.
A Hind Motors spokesperson said the move was part of an ongoing process.
“Managerial restructuring has been an ongoing process in the last two-three years. It continues in an effort to optimise workflow whilst retaining staff that remains critical to the continuity of operations,” the spokesperson said.
Labour minister Bose said the state’s existing labour laws could be used to protect those who fell under the definition of “labour”, which does not include the management and executive cadres.
“We will bring up the issue at Thursday’s tripartite meeting,” Bose said. Two bipartite meetings between the government and the company management have remained inconclusive.