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Does quota apply to PSU sold to pvt sector?

Is a private company that acquires a public sector undertaking, bound to follow the reservation policy of the Government, analyses Satya Prakash.

business Updated: Jan 11, 2008 04:22 IST
Satya Prakash

Is a private company that acquires a public sector undertaking, bound to follow the reservation policy of the Government?



A petition was filed by two VSNL SC/ST employee associations, which alleged that the TATA-managed company was not abiding by the undertaking given to the government regarding reservation for Scheduled Castes and Scheduled Tribes at the time of taking over the management of the then PSU. The petition has been filed by VSNL SC-ST Welfare Samiti and VSNL SC-ST Employees Welfare Association.



The Supreme Court on Thursday asked the Centre and VSNL to respond to the PIL in which both the associations alleged that the Scheduled Castes and Scheduled Tribes employees were being retrenched.



A bench headed by Chief Justice of India KG Balakrishnan has also sought response from the National Commission for Scheduled Castes and the National Commission for Scheduled Tribes.



"VSNL had given an undertaking to the Centre that the safeguards for SC/ST employees would continue after the disinvestment, but it is now following an arbitrary and discriminatory policy," petitioners' counsel KS Chauhan said.



"The company has recruited a large number of new employees and there is no representation for members of the SC/ST (categories), which is mandated under Article 16(4) of the Constitution," the petitioners said, adding the number of such employees has come down to 4.2 per cent.


They sought implementation of social welfare measures for its members as the Centre still held 26.12 per cent shares in the company.



The petitioners alleged that SC and ST employees of VSNL were under threat of termination as the performance of 75 per cent of them had been wrongly evaluated as unsatisfactory or marginal. They sought a direction to the Centre and the VSNL to stop the retrenchment of the SC and ST employees and ensure that VSNL honoured its undertakings given to the government in 2001 and 2002.



"The evaluation did not follow scientific criteria, but was inappropriately designed to retrench the services of majority of the existing employees." Chauhan said.