MTNL Firms Up VRS For Employees

New Delhi: | Updated: Mar 26 2002, 05:30am hrs
There was a time when the very mention of the ‘V’ word evoked extreme reactions from the 60,000 odd employees at the government owned Mahanagar Telephone Nigam Ltd (MTNL). After being unmentionable in the corridors of MTNL for a spell, there are now concrete plans ready to offer a voluntary retirement scheme (VRS) to the employees.

“We will offer a VRS,” the chairman and managing director of the Rs 6,100-crore company, Narinder Sharma told eFE in an exclusive interview. There is not much worry about employee reactions this time. “It will be a voluntary scheme. Why should there be any opposition,” he questioned.

At the employees’ end too, there has been a perceptible softening of views. When contacted, the general secretary of MTNL Staff Union, Chowdhary Sarup Singh, said that he supported a VRS, though there were conditions attached. “We are for a VRS if it is voluntary. VRS should not be imposed on the employees,” he said.

Another condition for the MTNL Staff Union to endorse the VRS is that the retirement terms be managed by the joint negotiation committee, which comprises members of the management as well as the union. Though Mr Sharma declined to give a time frame for the VRS offer, it is likely to take at least a few months before the plan is finalised, approved by the board and then offered to the employees.

The contours of the VRS plan will be worked out only after getting inputs from ICRA. It may be recalled that MTNL had roped in ICRA last year to chalk out what was being called a human resource (HR) restructuring strategy. ICRA has tied up with US-based HR consultancy — William M Mercer Companies LLC — for this project. The obvious brief to the consultancies is to advise MTNL on the three ‘Rs’ — retraining, redployment and retirement. The ICRA-Mercer recommendations are likely to be finalised by the end of April.

There are no two opinions about whether MTNL, which provides telephony (basic and cellular) and Internet services in Delhi and Mumbai, is overstaffed or not. It is.

Bulk of the employees (90 per cent) are in the clerical/support staff category. According to the latest annual report of the company, MTNL had 60,558 employees as on March 31, 2001 of which 35,222 (60 per cent) were group ‘C’ employees, which comprises the clerical/administrative staff. Group ‘D’ employees, which include peons and other support staff number 18,409 (30 per cent). To what extent these employees can be retrained and redeployed in the company’s expanding operations is debatable.

There is now an urgency about rightsizing MTNL’s workforce, which absorbs about a fifth of the revenue generated. The firm has to become lean if it is to take on competition from private players like Bharti (in Delhi) and Hughes (in Mumbai). This competition is only expected to increase as more operators plan services in its two main markets.

MTNL also needs to downsize in preparation for the inevitable — disinvestment. Analysts say that prospective investors will not touch a 60,000-employee company with a barge pole. The government, which has a 56.25 per cent stake in the firm, is believed to be in the process of referring MTNL’s case to the Disinvestment Commission. In fact, the recent listing of MTNL’s American Depository Receipts (ADRs) at the New York Stock Exchange (NYSE) was also being seen, in some circles, as a step towards facilitating the proposed disinvestment.

The staff union is however strictly against any disinvestment in a profitable entity like MTNL.