Strike hits Pennar Mouda unit

The Mouda unit of Pennar Aluminium has plunged into a crisis as a section of workers has proceeded on a strike demanding ex-gratia payment.

The state labour department here maintains that it is yet to receive the mandatory 21-day notice for the strike.

The agitation is expected to hit the Pennar Group company which has been experiencing financial troubles for the past few years.

The Hyderabad-headquartered Pennar Aluminium's plant was set up here in 1994 with an investment of Rs 200 crore. It has a workmen strength of 240.

Operations at the Mouda plant were suspended on January 27 after workers allegedly stalled a "cast coil machine" which is a vital part in running the factory.

While no labour leader was available for comment, Pennar Aluminium's president and plant in-charge S Mohinta confirmed the strike.

"It is unfortunate, but true," he said. Mohinta said workers were demanding ex-gratia payment for a section of employees who were not covered under the Payment of Bonus Act.

Terming the demand as "unreasonable", Mohinta said it was also in conflict with a wage agreement reached between the management and the workmen earlier.

He said under the pact the workmen could not raise any such demand till July 30, 2005. Mohinta also said that the company had paid a bonus in the rate of 8.33 per cent.

"However, some workers are demanding an ex-gratia payment for employees who are not eligible for bonus," he said.

Mohinta said the eligibility of an employee to receive bonus was decided on the basis of the salary he is drawing. Once the salary crosses a particular level, an employee is not entitled for bonus.

Mohinta said the workmen who were not getting bonus fell in this category.

On the company's financial state, he said that it had been referred to the Board for Industrial Financial Reconstruction in 1998 (BIFR).

The plant began operations here in 1994. Things were well during the early years, but the company slipped into the red in 1998. It was subsequently referred to the BIFR.

Earlier, the company used to manufacture aluminum sheets and market on its own. But after it began suffering losses, the work was done at other firms, Mohinta said.

The Mouda plant has two divisions out of which the conductor division has not been operational for the last four years. According to Mohinta, the company was in a bad financial shape and lamented that it was barely able to meet its expenses.

"We do not have any working capital," he said.

Meanwhile, sources added that the Industrial Development Bank of India, which had been appointed as the operating agency for Pennar Aluminium's revival, had suggested a management takeover of the company.

Companies such as Hindustan Seals Company had evinced interest in the deal. Sources said the buyers had wanted the unit to be operational at the time of the takeover.

Officials at the state labour department said that they had not received any prior notice about the strike from the workers' union.

Officials added that the Bombay Industrial Relations Act makes it necessary for the union to serve a 21-day notice before resorting to a strike. However, they said that it was up to the court to decide whether such a strike was illegal or not.

Officials said they had sent a team to the plant and talks would soon be held between representatives of the management and the workers.