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LABOR RELATED ISSUES……..1

MADHYA PRADESH POWER SECTOR REFORM KEY UNION ISSUES A QUICK REVIEW Manila, 3 rd December 2008. LABOR RELATED ISSUES……..1. Though it is claimed “No unresolved issues”, yet all employee related issues remain unresolved after 10 yrs of so called reform.

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LABOR RELATED ISSUES……..1

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  1. MADHYA PRADESHPOWER SECTOR REFORMKEY UNION ISSUES A QUICK REVIEWManila, 3rd December 2008.

  2. LABOR RELATED ISSUES……..1 • Though it is claimed “No unresolved issues”, yet all employee related issues remain unresolved after 10 yrs of so called reform. • Terminal benefits like pension are under severe risk. • In 2003, Pension fund liability was estimated to be Rs 3910 Cr (Aprox. $ 870 Mn), however till date only about Rs 5 Cr. ($1Mn have been credited. • Earlier (May 05) provision was made in Balance sheet of Transco at 3910Cr ( $ 870 Mn), however in final balance sheet (June 08) it stand deleted from books . • Unfunded pension liability may now be over 6000 cr (above $1.3 Bn).

  3. LABOR RELATED ISSUES……..2 • Though statutory auditors have stressed that in compliance of Accounting Standards (AS-15) provision for terminal benefits is a must, yet no company is making a provision in this regard. • Employees provident Fund Money utilised by Board – Default, about 251.79 Cr. ( about $ 55 Mn), is yet to be made good. • EL encashment, estimated at about 263 Cr. (about $ 60 Mn), remain unfunded. • No. of facilities such as Leave surrender, LTC etc. withdrawn • Delayed Wage Revisions – 1.4.99. Major arrears not paid. • Pension Commutation – Formula changed to detriment.

  4. LABOR RELATED ISSUES……..3 • In spite of assurance of no change in service conditions, service conditions are being tempered. Since 2006, right to opt Voluntary Retirement has been banned, making MPSEB largest organization of bonded labors. • Right of Collective bargaining – Not Respected. • No participation in policy decisions. Consultation with Unions only as per wishes. Even letters are not responded. • Electricity have been transferred out of purview of M.P. Industrial Relations Act (the State Act) yet Industrial Dispute Act (Central Act) provisions are also not implemented.

  5. LABOR RELATED ISSUES……..4 • No Recruitments in most of the cadres for more than 15 years, resulting in increasing average age & excessive workloads. • Lack of norms for work assignment leading to continued state of Fear and uncertainty. • Absence of effective individual grievance redressal mechanism. • For resolution of labor management conflicts neither provisions of State Act (MPIR) nor Central Act (ID) being implemented. • Increasing dependence on outsourcing. & threat of pocket privatization. • Though it is said that most of the terms are dictated by ADB, yet no one is aware of any complaint mechanism in ADB.

  6. Policy Issues ….1 • In view of failure in -Ensuring commercial viability of sector and making cheaper and quality power to all, thorough review of power reform philosophy and process is urgent call of the day. • Since last 5 yrs, every year India’s largest circulating Magazine ‘India Today’ and a leading market research firm ‘MARG’ rate all states in India. For last 5 years the top 4 slots are held by states of Punjab, Tamilnadu, Himachal Pradesh and Kerla. Interestingly all of them have integrated public sector State Electricity Boards. “Bigger is Better”. • Till review of unbundling philosophy, status quo be maintained. Process of “Employee Transfer” from Board to Companies should remain stayed.

  7. Policy Issues ….2 • Otherwise also, to achieve better economy of scale and reduce non productive overheads the 3 Discoms (Tradco too), having same monopoly business on same rates, should be merged. • Generation capacity addition in public sector and assured funding for proper upkeep of running facilities to be given high priority. Reduction in power purchase bill will have much larger cascading effect than scattered investments. • Payment for every consultancy should be linked with benchmarked actual deliverables. • No adventure in the form of pocket privatization or ‘Franchisee’ should be made during review period.

  8. Policy Issues ….3 • Chattisgarh, which was earlier part of MP, has not adopted the so called reform model. Now it’s the only state having zero power cuts and monthly cash surpluses. It should act as the model. • Due to transfer of functions from Board, which was statutory body, to companies, additional tax demand of about 760 Cr ($ 170 Mn) have been raised by various tax authorities. • While the system is in loss, the components show profits. In last 2 yr it resulted in avoidable income tax payment of 19 Cr. ($ 4 Mn). • Caught in between Govt declarations of providing power as a social responsibility and fixation of responsibility on field staff for commercial recovery, officers and staff are facing threat to life and property.

  9. Thank You for A patient hearing. Pl Acknowledge the multi faceted unresolved issues of MP Power Reform.

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