Move to down shutters on Jessop sparks row

It is not everyday that the government proposes that the management of a company declare closure after paying off the workers. But that seems to have happened in the case of the over 200-year-old Jessop & Co Ltd.

The present management of the company has written to the government saying that it is now preparing to down the shutters on this heritage unit “on and from November 15, 2013… subject to the fulfilment of the various legal formalities and permissions”. The company has on its rolls 685 workers and staff.

Known majorly as a wagon manufacturing company, Jessop is an engineering firm engaged in making heavy mining equipment and road rollers with its unit in Dumdum. It came under the fold of the Pawan Ruia group in 2003 when the Centre divested its equity holding through Bharat Bhari Udyog Nigam Ltd (BBUNL).

The company, which was making loss, recovered somewhat, but started sliding again. Disruption in production by miscreants, on the one hand, and poor worker productivity, on the other, were the issues. Net profit eroded steadily, dropping from Rs.9.4 crore in 2010-11 to Rs.1.02 in 2012-13. During this period, debt mounted to Rs.229 crore from Rs.118 crore. The management sought the help of the government in containing disruptive activities in the factory. It also sought government help to introduce productivity-linked wages. It held several meetings with the state government, some of which were also taken by the state labour minister Purnendu Bose.

It made two definite proposals — paying productivity-linked wage and halving the manpower and freezing dearness allowance.

These confabulations led to a tripartite meeting on October 30 wherein the minister reportedly said that the government could not agree to the management’s anti-labour proposals. He also proposed that the management declare closure and pay the legitimate dues of the workers. “Reluctantly, in the given situation, the management accepts your proposal to declare closure of the factory,” the company said in a letter to the minister . It sent copies of the letter to the Chief Minister, too. As is to be expected, the developments sparked controversy, even as the minister denied having made any such proposal although others present at the meeting corroborated the company’s version.

Four-way meeting

The company management has decided against participating in a four-way meeting called by the government on November 8, to sort out matters. It said that it would not participate in a meeting where the former majority equity holder BBBUNL has also been called.

It wanted the earlier tripartite structure of meetings between the four trade unions, the government, and the company to be retained saying that BBUNL had no role in running the company now.