And, if neither of the choices are enticing enough, the Abhay Oswal group company plans to delcare a lockout after a fortnight, effective December 16. The lockout will continue till such time all workmen agree to the cost-cutting measures and submit the same, individually, in writing.

A notice to this effect has been put up by the company at its Anik unit in Chembur. The notice further states that "since the company is not in a position to keep the factory working even during the notice period, the employees are hereby informed that operations shall be suspended with immediate effect."

The reasons cited by the company for the adverse turn of events is the high cost of production. Advanced technolgies and easy availability of light density poly-ethylene at lower costs have punctured the profitablity of local naphtha producers. As a result,the unit with annual capacity of 2,000 tonnes has been suffering substantial losses running to about a crore every month.

"The financial position of the unit has thus become very precarious, making it wholly unviable," the notice stated. This has forced the management to cut down on expenditue which largely accounts for the increase in production cost. The notice further stated that expenses incurred on maintaining a canteen, employees' transportation will have to be reduced by 50 per cent. And the lockout will continue till such time all the workmen agree to wage cuts and opt for a VRS.

The VRS compensation for employees with less than five years of service will be at the rate of one month of salary for each year of completed service. Employees with more than five years of service and balance tenure less than five years, the compensation will be three-fourths of the monthly salary for each completed year of service.

And for employees who have put in more than five years and have more than five years ofremaining service, the compenstion will be at the rate of one month's salary and, additionally, one quarter month's salary for each completed year of service.

The lockout notice is a sequel to a mass transfer that the company implemented a week back. About 17 managerial staff were transferred to the company's sugar mill at Phagwara in Punjab.