Home >Industry >Manufacturing >Jessop agrees not to shut Kolkata factory

Kolkata: The Ruia Group-controlled railway wagon maker Jessop and Co. Ltd has for the time being agreed to withdraw a notice threatening to close its Kolkata factory.

On 31 October, the company had sent the notice to the West Bengal government following differences between its management and workers over lay-offs and productivity-linked pay.

For now, jobs at the embattled firm are safe, but trade union leaders said people are not being paid wages.

On Monday, the government secured a commitment from Jessop that it would withdraw the notice and form a panel with representation from workers, management and the state government to monitor day-to-day operations and to explore ways to revive Jessop. The committee will get six months to deliberate on the issue.

“We had requested the management to withdraw the closure notice, and it has assured us that it will do so," Partha Chatterjee, West Bengal’s commerce and industries minister, said on Monday, after holding a meeting with Jessop’s management and trade unions at the state’s legislative assembly.

The company declined to send its statement to Mint.

Jessop had threatened to halt operations after its workers opposed proposals of lay-offs, freeze on inflation-linked allowance and productivity-linked pay. The management had proposed to link pay with productivity as an alternative to cutting the work force by half, according to Asit Sen, a trade union leader. Jessop has some 700 workers.

Earlier this year, the company had also proposed to sell a portion of its 67-acre factory at Dum Dum near the airport. Workers had opposed this move, saying that it was aimed at stripping the company of its assets.

All the proposals were stacked against Jessop’s workers, who haven’t been paid for the past two months, said Sen, adding that the performance targets set by the management were impossible to achieve.

The company owes its workers at least 3.5 crore on account of back wages. In addition, it owes around 12 crore to employees, who have retired in the past three years and have not been paid their gratuity and provident fund, alleged Sen.

The trade unions welcomed the state’s intervention.

Dunlop India Ltd, another company headquartered in West Bengal and controlled by the Ruia Group, is battling a winding-up petition in the Supreme Court after an appeals court in Kolkata ordered liquidation of the firm for repayment of creditors’ dues.

Mint and Dunlop are fighting a case in the Kolkata high court over the paper’s coverage of happenings in the company.

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