The country’s biggest industrial complex – the Pakistan Steel Mills (PSM) – on Friday laid off over 4,500 of its employees in a move strongly criticized by the PPP led Sindh government.
The employees – 4,544 in total – were fired in the wake of an emergency meeting chaired by the PSM chief executive officer (CEO) at the CEO Secretariat. According to sources, the management has started the process of sending termination letters to the residential addresses of the sacked employees.
In June, the PTI led federal government had decided to terminate all 9,350 PSM employees, taking a giant but politically difficult step to stop years long hemorrhaging instead of reviving the industrial unit.
The Economic Coordination Committee (ECC) of the Cabinet on June 3 also approved to give the employees due monetary benefits along with one month salary that would cost the exchequer Rs18 billion to Rs19.7 billion. On an average, every sacked employee was estimated to receive Rs2.3 million.
“The ECC gave go-ahead to a ‘full and final’ human resource rationalization plan for the PSM employees in accordance with the judgments and observations of the Supreme Court of Pakistan and other courts hearing the cases involving the PSM,” the Ministry of Finance had said in a statement.
According to a PSM spokesperson, the sacked employees belong to Group 2, 3 and 4 and include junior officers, assistant managers, deputy managers, managers, SEDGM and DCO employees.
However, teachers and non-teaching staff of PSM schools and colleges; drivers, firemen, fire tenders operators, public health staff, security guards and watchmen, gardeners, paramedical staff, kitchen staff, office staff and workers of all departments of finance directorate are still on job.
Services of employees belonging to the A&P directorate and A&P department, finance, junior officers of the directorate, Corporate Secretariat, CP&I, ISMD, Law Department, Security and the A&P Department have been retained on need basis.
In addition, employees posted in the CEO Secretariat, Steel Mill Hospital, Education Department, CDB, Protocol and Zonal Office Islamabad as well as departments of mandatory services have also been retained.
The news of dismissal was received with anger and concern by the employees and trade unions which have already been protesting against the management.
Commenting on the development the PSM Stakeholders Group Convener Mamriz Khan vehemently opposed “the anti-laborer” move and said it was a controversial decision on part of the PSM CEO against whom a case is already pending in the court.
“Prime Minister Imran Khan and Sindh Chief Minister Murad Ali Shah should pay attention to this issue and the two governments should sit together and take concrete steps to restore the PSM issues and save jobs of the employees,” he said.
Sindh Minister for Labor Saeed Ghani also strongly condemned the move and described it as an “anti-laborer move”. He said the decision to terminate services of PSM employees reflects the incompetence and inability of the “selected government”.
He said the federal government is responsible for the “economic massacre” of the employees and their families. “The PTI led federal government had announced to provide 10 million jobs but it has actually deprived thousands of people of their jobs,” he said. “The PPP stands by the fired employees,” he said.
He said the PPP demands that the government immediately withdraw its decision to lay off employees. “Steps should be taken to run the mill by announcing an immediate package to make the PSM economically viable,” he added.
The process to take the PSM – the country’s largest industrial unit with 1.1 million metric tons production capacity – out of the public sector began in June 2015 when the then PML-N government decided to stop production.
Since then, the federal government has been paying salaries to the employees but the mill has remained closed. After coming into power, the PTI government decided to revive the PSM and struck its name off the privatization list. But it again added the PSM in the privatization programme last year.
However, neither the PSM could be privatized nor the government tried to revive it.
The PSM's total expense on its employees in 2018-19 was recorded at Rs9.54 billion that is 75.7% of total production and operating expenses, according to the summary of the Ministry of Industry and Production.
The industry ministry was of the view that due to poor financial condition of the PSM, the government has been paying net monthly salaries to its employees since 2013.
The PSM stopped its commercial operations in June, 2015 without formulating any human resource plan for its 14,753 employees. The number of PSM employees has declined to 9,350 in 2019.
Out of total, only 250 employees would be retained for a period of four months for the execution of the employees’ retrenchment plan and other necessary work. All other employees would be issued termination notices and the financial impact of the plan would be Rs19.657 billion, said the summary.Pakistan Peoples Party (PPP) Chairman Bilawal Bhutto on Saturday said the incumbent prime minister should be sacked and not the workers.
In a tweet, the leader vowed to return 'each and every' sacked employee back to work, adding that the land of this 'historical industrial asset belongs to the people of Sindh'.
Calling the government's move "economic murder," Bilawal said PPP will not let the Pakistan Tehreek-e-Insaf (PTI) get away with taking.Earlier, the country’s biggest industrial complex – the Pakistan Steel Mills (PSM) – laid off over 4,500 of its employees.
The employees – 4,544 in total – were fired in the wake of an emergency meeting chaired by the PSM chief executive officer (CEO) at the CEO Secretariat. According to sources, the management has started the process of sending termination letters to the residential addresses of the sacked employees.
In June, the PTI led federal government had decided to terminate all 9,350 PSM employees, taking a giant but politically difficult step to stop years long hemorrhaging instead of reviving the industrial unit.
The Economic Coordination Committee (ECC) of the Cabinet on June 3 also approved to give the employees due monetary benefits along with one month salary that would cost the exchequer Rs18 billion to Rs19.7 billion. On an average, every sacked employee was estimated to receive Rs2.3 million.
According to a PSM spokesperson, the sacked employees belong to Group 2, 3 and 4 and include junior officers, assistant managers, deputy managers, managers, SEDGM and DCO employees.
However, teachers and non-teaching staff of PSM schools and colleges; drivers, firemen, fire tenders operators, public health staff, security guards and watchmen, gardeners, paramedical staff, kitchen staff, office staff and workers of all departments of finance directorate are still on job.
Hammad blames PPP, PML-N for PSM closure
Responding to Bilawal's tweet, Federal Minister for Industries and Production Hammad Azhar, while addressing a press conference in Islamabad, said that the operational capacity of PSM was reduced to 40 per cent during the tenure of PPP government and subsequently, it registered a loss of around Rs100 billion.
"PPP during its tenure had inducted thousands of employees in the [steel] mills beyond its capacity," he said and added that during the PML-N government the operational capacity was further reduced from 40 per cent to 6 per cent, which he said led to PSM closure in 2015.
The minister said the political parties which were responsible for turning the PSM into a loss-making entity were now playing politics on the issue. However, the government had to take decision to shut the PSM in the “larger interest of the country”.
He said the government had to pay Rs35 billion in salaries to employees of the closed mill and Rs20 billion in pensions to retirees, bringing the total amount to Rs55 billion.
In addition, he said that PSM had Rs230 billion debt liabilities and was inflicting losses of Rs15-20 billion annually, while Rs750 million were being paid to employees in salaries.
Moreover, Rs92 billion were spent on bailout packages of the mill, the industries minister added.
Hammad said the government wanted to make PSM a profit-earning organisation by involving private sector and by reducing the staff.
He said the government would hire a financial advisor, through transparent bidding process, with whose consultation the Privatisation Commission would proceed forward to bring the PSM under private sector management.
Initially, he said, around 4,500 workers out of 9,500 would be laid off in the first phase, followed by next phase that would result in laying off of 95 employees. Each employee would get an amount ranging from Rs2 million to Rs3 million.
"The total dues to be paid have been estimated at around Rs10 billion which would be paid timely," he added.
He was of the view that had the decision been taken at appropriate time, billions of rupees would have been saved and utilised in development funding.
The minister said that managing business was not the government's job, hence the PSM would be managed by the private sector with proper technology, management and adequate manpower.
He said that with these measures, the private management would turn the PSM from loss-making organisation into a profit-earning one.
He said that out of 19,000 acres of land owned by the PSM, 13,000 would be leased to bear the expenditures.
