Public Enterprises Department

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Reforms with Humane Face - Social Safety Net program (SSNP)

Any reform programme is almost always a painful process. This is particularly so in the cases of public enterprises. The enterprise reform programme entails job losses bringing in its wake trauma for the employees. In order to mitigate this social impact, the Government has evolved Voluntary Retirement Scheme (VRS) and Special Compensation Package (SCP), which provides for an attractive severance package and Social Safety Net Programme.

The Government’s approach has been and will continue to be, to ensure that the interests of all stakeholders viz. the employees, suppliers and consumers are protected with minimum adverse impacts.

PE Reforms can reduce the work-force at the level of an individual enterprise while having positive impact on employment in the State’s economy as a whole. Government has introduced SSNP, to mitigate the impact of job loss trauma. SSNP is undertaken by the Government with a view to enhance capacity building of workers that have been relieved from employment through VRS. The SSNP provides hope for the future for unemployed workers through skill improvement and / or orientation for self-employment. SSNP also does liaison, interface and collaborate with Government and non-Government agencies for redeployment of the VRS workforce.

SSNP has two distinct components:

  • Voluntary Retirement Scheme (VRS), which is essentially aimed at easing the impact of job loss by providing a severance package.

  • Counselling and retraining for redeployment of the displaced workers so that over a period they can be reintegrated into the emerging labour market, or become self-employed.

Voluntary Retirement Scheme (VRS)

According to the scheme, an employee of a SLPE with 10 or more years of service or 40 or more years of age and who has been identified by management as surplus is eligible for VRS @ 45 days Ex-gratia for every completed year of service, besides the terminal benefits as admissible to him/her. Employees who do not qualify for VRS are being given minimum compensation of Rs.30,000/-. Those who qualify but do not opt for VRS will be compensated under the Industrial Disputes Act, 1947 (equivalent to 15 days average pay for very completed year of continuous service plus other terminal / statutory benefits).

Under the Andhra Pradesh Economic Restructuring Programme (APERP), supported by the World Bank, the Government is providing benefits under VRS/ SCP to the job displaced employees and workers. The VRS/ SCP package is far better, compared to compensation available under Industrial Dispute Act. The package was originally envisaged for those who had completed 10 years of service. However, the Government have since removed these restrictions and now all regular employees are eligible to receive VRS/SCP.

Counselling, Retraining and Redeployment Program

Besides the monetary compensation to overcome financial loss, social safety net provides the much needed assistance and guidance to negotiate the changing market scenario for alternative livelihoods.

SSNP facilitates and empowers the affected sections to reintegrate into changing labour market by equipping them with new or improved skills that are in demand. The Department For International Development (DFID) U.K. is funding this programme, and a special wing of the Implementation Secretariat in the Department of Public Enterprises implements the programme.

Major components of the Program are:

  • Survey of the employees availing VRS/SCP
  • Counselling of the employees
  • Retraining/Re-skilling programmes
  • Limited follow-up services for redeployment or alternative livelihoods
  • Integration of SSNP with other safety nets
  • Labour Market Survey

Survey and Counselling

Survey and Counselling are essential inputs in the Safety Net Program for the displaced workers. Sometimes, Survey and Counselling go on simultaneously. However, counselling is not a one shot job. It is carried out in several phases.

Survey helps to understand the status of job displaced employees and workers and build exhaustive database about the enterprises covered under the reform programme. Survey covers the employee’s details pertaining to the education, family background, social status, assets, and nature of job, skills; and the amount received/receivable under VRS/SCP, the way the money was spent or proposed to be utilised.

Based on the age, education, aptitude, interest, the employees are counseled to opt for retraining programmes. Retraining is essential as their skills have become obsolete and need upgradation. Counselling also helps the job displaced workers to overcome difficulties encountered with regard to utilisation of VRS amounts, meaningful choices for retraining in relevant skills and related aspects. Counselling is a process and identification of relevant skill area for retraining is one important element.

Retraining/Re-skilling programmes

Advanced age, outdated job skill, lack of awareness of opportunities and lack of education are some of the characteristics of the displaced workers in Andhra Pradesh. They are re-trained/re-skilled in order to upgrade their skills or trained in new areas according to their aptitude and requirements of the prevailing labour market. An appropriate training institute is identified and the employers are enrolled in the programmes. Regular monitoring of the training programme helps to motivate the trainees and to sort out any difficulties faced in the retraining program.

Skill upgradation through vocational training in new or existing skills is customized. There are a veriety of training programs of varying duration and of varying size of the batches from one to forty. Training course syllabus is specially designed to suit the requirements of trainees and conducted on timings of convenience to the learners.

Follow-up services for redeployment

Limited follow-up services are provided for self-employment and wage employment. Displaced workers are assisted through follow up services like tracking vacancies advertised in the media and other sources. Follow-up services include identifying suitable organisation, preparing the employee’s bio-data and arranging interviews etc. Liaison with placement agencies facilitates retrained persons to get timely information about vacancies in the areas they are trained and to explore employment opportunities. SSNP keeps displaced employees of the employment opportunities. It also assists those interested in self employment through entrepreneurship development. Accessing the resources from experts and financial institutions helps displaced employees interested in self-employment.

Integration of SSNP with other safety nets

Displaced workers are assisted in availing the safety nets implemented by various departments of the government. It also includes livelihoods promotion activities of NGOs and the government. Linkages with the financial institutions for disadvantaged communities, employment generation programmes (CMEY/ PMRY etc), DRDA and several departments. Facilitating displaced workers to avail the benefits of DRDA and DWCRA to mobilise sewing machines and a stall in the DWCRA bazaar for a group of displaced women workers formed into a self help group is one example. Accessing vocational educational programmes of a community polytechnic for providing retraining programme agro-based vocations in rural areas is another example.

Labour Market Survey

Keeping in view the broad parameters of the Social Safety Net Programme, and to give a practical dimension to the implementation process, a Labour Market Survey is undertaken to assess the employment opportunities with reference to the profile of the job displaced workforce. The Labour market is basically a concept where current availability of skills and requirements of skills in the near future are determined in respect of a given geographical area depending on the location of the unit, which is likely to be restructured or privatised.