Calcutta, Nov. 2: The Calcutta-based Ruia Group has sought the Bengal government’s approval to close wagon maker Jessop & Co in the wake of continuous losses because of deteriorating law and order situation and non co-operation by workers.

In a letter to labour minister Purnendu Bose on November 1, Pawan K Ruia, owner of the group, shared his decision to close the firm from November 15. A copy of the letter has been sent to chief minister Mamata Banerjee as well.

The letter referred to a tripartite meeting where the Jessop management’s plea for productivity-linked wage was turned down by Jessop union representatives in the presence of the labour minister.

Ruia was not available for comment.

Labour minister Purnendu Bose said the management had proposed cutting the workforce by half and freezing dearness allowance.

“No government can accept such proposals. The unions also rejected them. I asked the management to come up with new ideas. And look what they have done,” Bose told The Telegraph today.

The minister said the government would formally respond after receiving the letter. “The union people told me that a copy of the letter has been posted on the gate of Jessop’s unit on Jessore Road. If the owner does not invest in the firm, how will it run,” he said.

The Ruia group, however, said Rs 50 crore had been invested since July 2012, taking the total investment to Rs 200 crore after taking control of the firm in 2003.

The unit is spread over 71 acres on Calcutta’s northern fringes, which is witnessing a property boom of late. The plant has 600 permanent workers on the rolls. According to sources in the management, they get an average salary of Rs 14,000 a month, highest among all wagon makers located in Bengal.

Ruia initially proposed that their salary be linked to productivity and set a production target of four roadrollers and one railway coach a month, apparently one-tenth of what Jessop can potentially produce.

The management said it would guarantee product order, working capital and supply of raw materials to produce at this rate. If it failed to do so, workers would not be penalised for low productivity.

However, unions rejected the plan. Then the management came up with a plan to retrench 300 people while continuing with the rest at the existing salary without any productivity-linked pay. But it declined to provide any additional severance package except usual statutory dues. The unions rejected this too.

The minister said Ruia could not close a factory with a 15-day notice. Under the Industrial Dispute Act, 60 days notice has to be given before closure. Moreover, all the dues of the workers, including leave encashment, dearness allowance, provident fund and gratuity, had to be cleared.

“Once I get the letter, I will invite the company top brass for a meeting and come up with an alternative proposal. Problem is, they don’t ever send board level people. If the minister is presiding, the owner should come. But as we have seen in Dunlop, that never happens,” Bose said.

Dunlop’s Sahagunj unit in Hooghly is under suspension of work as the Ruia firm is battling a winding up petition at the Supreme Court. There is a possibility that Bengal may take the legal route to prevent Jessop closure which may become a political hot potato ahead of general elections.