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Mumbai, Dec 26: Hindustan Lever has launched voluntary-retirement schemes (VRS) at locations across the country, which is expected to sharply reduce its work force. Union members allege "pressure-tactics" on Lever's part to force the plan on them, while the FMCG has maintained that the exercise was entirely voluntary.
Bennet D'Costa, general secretay of Hindustan Lever Employees' Union, Mumbai, has alleged pressure tactics which, according to him, are "as well-planned as any other Lever strategy". He alleged that at the Sewri detergent factory, the management closed down all units except the institutional detergents division for the VRS launched early this month. This, he says, has rendered remaining employees surplus, forcing idle staff to leave.
But Levers' official spokesperson has refuted these allegations. The spokesperson said: "There is nothing awesome about the VRS. From time-to-time, HLL has introduced VRS either to improve productivity standards or close down absolutely unviable units owing toeconomic or business imperatives."
The union provides examples of "pressure tactics". "For example, at the detergents factory at Sewri, the medical doctor tries to instill the fear of death by advicing employees about the adverse conditions of their health," says Costa.
The company says the allegation is baseless and adds: "There is no question of pressurising employees. No company doctor has ever exhorted any employee to accept VRS because of the his/her health. We have not yet lost our sensibilities to suggest that VRS is a medication."
The over 5,000-odd employees at HLL and Brooke Bond factories across the country are beginning to feel the brunt of of these "fixed assets cut". Personnel managers, union representatives allege, are leaving no stone unturned to meet "unofficial" targets. This has been denied by the company.
According to HLL's spokesperson, the FMCG major has been forced to close down some units owing to economic or business imperatives. But, simultaneously, it has set up newfacilities. In 1998 alone, HLL set up six new units for exports, soaps, detergents, personal products, tea and speciality chemicals. "Such restructuring is necessary to maintain the company's competitiveness and capability to generate productive employement on a sustainable basis. HLL's direct employment has grown six-fold since 1956 to 36,000 and 2,00,000 indirect jobs through the entire supply chain," claimed the spokesperson.
The VRS has been announced at the Sewri factory (1,400 employees), Garden Reach factory at Calcutta (1,100 employees) and the Tatapuram factory in Kerala (400 employees). Although the company denied that schemes had been announced at erstwhile Brooke Bond factories, sources said employees at former Brooke Bond offices at Chandigarh, Nagpur and Ahmedabad and factories at Kannan near Nagpur, Ghateshwar factory at Hyderbad and the Coimbatore factory have also been offered VRS.
HLL has been moving towards substantial outsourcing in order to cut down on cost of capital.
In fact,Hindustan Lever is a negative working capital-run company, and a substantial percentage of production has been farmed out to vendors who have been provided with management skills and automation inputs comparable with Lever's machinery. It is believed that the percentage of outsourcing is going to be progressively more as workforce reduction within the company gathers pace.
What the scheme entails
The retirement package doles out about Rs 5 lakh at each of three HLL factories. Although HLL has officially denied any such scheme at erstwhile Brooke Bond offices, sources say, at the six erstwhile factories and offices of Brooke Bond, retirement packages have been offered. These are slightly lesser than the HLL bounty at Rs 4 lakh, sources said.
The VRS has an early-bird scheme, which ranges from Rs 75,000 to Rs 25,000 depending on years of service. The scheme offers a pension incentive until 60, not after that. The pension varies from Rs 20 to Rs 5,000 depending on the years of service and there is a5 per cent increase per annum on the amount.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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