Barely a year into a successful turnaround, Voltas Ltd is moving towards a head-on collision with its unions that is now threatening to throw the diversified Tata group company into a new bout of uncertainty.
The company has offered a new and revised voluntary retirement scheme (VRS) aimed at its 4,400-odd general workers, of which it would like to retire around 1,000. This has met with stiff opposition from its unions, who have called for a nationwide strike at all Voltas units on May 11.
The Voltas management and the unions have been at loggerheads for the last few months over the proposed VRS, which the union claims is in violation of a 1989 pact between the two sides. The token strike will the be the fourth in the last six months, Voltas union officials told Business Standard.
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Over the last three years, Voltas has completed an extensive restructuring of operations _ which included exiting from all non-core operations and consolidation of its core businesses _ following the company's first-ever loss in 1996-97. The recast exercise has created substantial redundancies which the Voltas management is now looking at shedding.
Last April, the company had offered a VRS which has been accepted by 1,200 workers and resulted in an outgo of around Rs 50 crore. However, the unions allege that the Voltas management is not sticking to its earlier promise of 3 new recruitments for every four worker that leaves the company, and recruitment of the next of kin.
Union officebearers said they have already held talks with the labour commissioner on this issue, but was not planning to take any legal action against the management as it already has "several pending cases".
A company official defended the VRS saying, "It is a very compassionate scheme. We are also offering alternate employment opportunities for those who choose to opt for the scheme." It is learnt that the company has identified around 1,000 surplus positions in its present setup which has around 6,500 employees, including those in the management cadre.
The company has already revised the scheme and has shifted to offering a pension scheme instead of a one-time package wherein 75 per cent of the salary would be paid till the actual date of retirement upto a maximum of 10 years.
As part of the recast _ which eventually resulted in the company climbing back into the black only in the 1999-2000 fiscal _ Voltas sold its white goods businesses to Electrolux, the chemicals business to group company Rallis, the thermostat division to a UK-based multinational, and divested its stakes in a couple of loss-making subsidiaries.