Govt asks PSM to justify employee retention

Directs management to invoke 1968 law to sack hundreds of workers

ISLAMABAD:

In a step towards sacking thousands of Pakistan Steel Mills (PSM) employees, the federal government has asked the entity’s management to justify the retention of employees after the virtual closure of the unit, and directed it to invoke a 1968 law to retrench the workforce.

The fresh instructions are given following the January 29 meeting of the Economic Coordination Committee (ECC) of the Cabinet which directed a lay-off of hundreds of daily wage earners. However, the February 16 directives of the Privatisation Commission (PC) to the chief executive officer (CEO) of PSM, Maj-Gen (retd) Zaheer Ahmed Khan, revealed that the government intends to go even beyond sacking the daily wage earners.



The federal government has now linked disbursements of monthly salaries from December 2015 onwards with the justification of retaining regular, contract and daily wage workers, as the unit has been closed since June last year, showed the document.

“In view of the fact that PSM is not operative due to closure of gas supply, PSM board may review the options available under the Pakistan Commercial and Industrial Employment Ordinance 1968 and the decision of the board may be submitted to PC,” it said.

The 1968 act lays the ground for sacking employees including permanent ones. Section 11 (3) states, “In cases where workmen are laid off on account of failure of the plant, a temporary curtailment of production or any stoppage of work…. their services may be terminated after giving them due notice or pay in lieu thereof.”

The government’s steps may create another crisis like the one that resulted in grounding Pakistan International Airlines’ operations by employees protesting its privatisation. PSM is also on the active privatisation list.



In its January 29 meeting, ECC approved the payments of salaries for the month of October-November 2015 and constituted a committee to further look into the matter. Now PC has written to the PSM management in light of the committee’s deliberations, finance ministry officials said.

Over 15,000 employees work at the steel mill besides the daily wage earners and they have not been paid for the months of December and January.

The Sui Sothern Gas Company Limited (SSGCL) has stopped providing gas to the industrial unit due to non-payment of a Rs18 billion principal amount. Finance Minister Ishaq Dar recently supported the decision to cut off the gas and refused to use his office to restore it. “If we have a reason to believe that PSM will not incur more losses after restoration of gas supplies, the gas can be provided but so far the decision of the petroleum ministry is justified,” he said earlier this month.



The government had given a Rs18.5 billion bailout package to PSM in addition to providing over Rs6 billion for paying salaries. However, it has not taken any action against those who failed to achieve targets and instead is going to use the 1968 law to lay off employees.

Despite Supreme Court directions, the National Accountability Bureau has also not yet taken to the task to those who caused billions of rupees in losses between 2009 and 2012.

Last November, PSM CEO Zaheer sought the prime minister’s help to resolve the gas suspension issue but to no avail.

According to the PSM performance analysis, it is as if the incumbent government is deliberately destroying the unit. From 2000 to 2008, the unit ran up to 94% of capacity and was profitable. However, from 2009 through 2013, the capacity utilisation varied from 14% to 65% and the mills incurred Rs104.5 billion losses. For the period of 2014 and 2015 the entity’s capacity utilisation ranged from 6% to 20%, which dipped to 1% since June 10 of last year. In this period, it sustained Rs48 billion losses.


Published in The Express Tribune, February 20^th, 2016.