STAFF CUTS AT ONGC: WITH A "GOLDEN HANDSHAKE"

Vol 3, PW 1 (03 Feb 99) People & Policy
     

Most people at ONGC accept that a government decision last year to raise the retirement age from 58 to 60 has had a negative impact.

One middle manager complains that by 58, most ONGC employees have, "retired psychologically" and that by making them stay an extra two years the government has unwittingly created a top layer of non-performing officials whose only ambition is to complete two years of service with a minimum of work. To its credit, ONGC is acutely aware of the problem.

On 27 January, its board agreed to introduce a voluntary retirement scheme involving "Golden Handshakes", a form of voluntary pay-offs to all employees who wish to "resign" at 58. By so doing, ONGC has effectively reintroduced early retirement through the back-door, with no obvious contravention of central government policy.

A deadline of 28 February has been set for those who want to benefit from the new scheme. Employees appear to be responding enthusiastically and "Resignation" letters have begun to stream in.

One report suggests directors on ONGCs board who are above the age of 58 could also benefit from the scheme. Until now, ONGC directors over 58 have been receiving extension contracts of six months.

If they now decide to "resign" and take advantage of the "Golden Handshake", the face of ONGCs board could radically change by May this year. Of all ONGCs Directors, only, RC Gourh, Director Technical, and Jhuari Lal, Director Personnel, are under 58.

One estimate reckons the whole exercise in redundancy payments will cost ONGC Rs110 crore ($26m) - small price for a slimmer work force.