A majority of Tata Tea's workers have rejected the company's plan to induct them as shareholders of Amalgamated Plantations, the new company comprising its tea estates in Assam and north Bengal, just days ahead of the April 1 operational deadline.
Tata Tea now plans to go ahead with restructuring Amalgamated Plantations with minor or non-existent worker participation.
Amalgamated Plantations was to be formed with Tata Tea, Infrastructure Leasing and Financial Services (IL&FS), and International Finance Corporation (IFC), the commercial lending arm of the World Bank, each holding a 20 per cent stake.
Workers were expected to pick up a 15-20 per cent stake and Mumbai-based consultant Ranjit Bathakur's GMS was to acquire the rest.
Sources close to the development said Tata Tea, IFC, IL&FS and GMS would acquire the portion earmarked for workers. The entity is valued at Rs 359 crore.
Worker resistance to the Amalgamated scheme appears to be in contrast with a similar move by the company one and a half years ago when it hived off its south Indian estates to Kanan Devan Hills Plantations Company, in favour of workers. Tata Tea holds an 18 per cent stake in the company.
Chanu Dey, executive member of the central committee of Cha Bagan Mazdoor Union, affiliated to Citu, said, "We have decided not to be shareholders of the new company. However, we have no objections to restructuring of the business." Cha Bagan Mazdoor Union represents 80 per cent of the workers in the four West Bengal tea estates.
In Assam, the problem has already reached flashpoint with Tata Tea declaring a lockout at the Borjan tea estate, after workers and outsiders assaulted the manager over the company's proposed restructuring plans. Borjan is one of the estates where Tata Tea was experimenting with its multi-cropping initiative.
The main contention is that once the workers become shareholders, they would not be covered under the Plantations Labour Act. "Under the provisions of the Act, we can demand gratuity, wage revision, Provident Fund and ration. As shareholders, we will be part of the management," said Dey.
When asked, Percy Siganporia, managing director of Tata Tea, said that as the workers' participation in the equity offer was voluntary and enabled by loans, there were varying levels of employee response after they evaluated the benefits of such equity participation.
"It would be speculative to comment on the extent of such participation. The structure of the transaction is not critically impacted by the extent of such participation," he said.
Amalgamated Plantations consists of 24 estates, four in West Bengal and 20 in Assam. The estates produce nearly 34.5 million kg of tea and have a turnover of Rs 224 crore. They comprise a total area of 24,091 hectares and employ 31,800 people.
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