Sesa Sterlite not to lay off 1,017 employees on notice

The layoff notices were given following the closure of iron ore business of the company due to a SC imposed ban on mining in the state

Vedanta group firm Sesa Sterlite today said it has dropped the plan to lay off 1,017 employees who were issued notices in January in its iron ore business following the Goa government's move to come up with a "transparent" mining policy.

The employees, over one-fourth of the work force at the iron ore business (also known as Sesa Iron Ore), were issued lay-off notices on January 1, under section 5B of the Industrial Disputes Act. They belonged to various mining division units in Goa.

"Welcoming an initiative of state government to formulate a transparent mining policy, the biggest mining company of India, Sesa Iron Ore, Sesa Sterlite Ltd, has decided not to pursue the layoff matter of 1,017 employees, who were issued layoff notices in the month of January, 2014," the company said in a statement.

It added: "The company has decided not to pursue the layoff matter till the time of the announcement of such policy."

Clarifying that layoffs are not retrenchment, it said that "all workers continue to be on the rolls of the company".

It added that after the notices were issued in January, "all employees were getting full salary until they are laid off after expiry of aforesaid period or receipt of necessary permissions and thereafter 50% salary will be paid".

The layoff notices were given following the closure of iron ore business of Sesa Sterlite due to a Supreme Court imposed ban on mining in the state.

Sesa Iron Ore had reported a negative operating profit of Rs 230 crore in the last fiscal and was the worst performer among various businesses of Sesa Sterlite.

Though the ban has now been lifted by the apex court with conditions, mining in Goa is expected to begin only after the monsoon season as all the companies, including Sesa Sterlite, will have to secure new mining leases and fresh environmental clearances for resuming production.

According to the provisions of Section 5B of the Industrial Disputes Act, an employee can be laid off on the sixty first day from the date of issue of notice or earlier, subject to permission from the state or central authorities concerned, wherever the number of employees in a single unit is 100 or more, the company said.

As on March, 2013, Sesa Iron Ore had 3,857 employees and 2,497 contractual/temporary workers, according to the annual report of Sesa Goa for 2012-13. The company had pruned its employee strength by nearly 18% in 2012-13 amid the mining bans in Goa and Karnataka.

Prior to mining ban, Sesa Sterlite used to produce about 15-16 million tonnes per annum (MTPA) of iron ore from Goa and was the largest iron ore producer cum exporter from the state.

Sesa Iron Ore was previously known as Sesa Goa. Its name had changed after Vedanta took a group restructuring exercise, that was completed in August last year. Accordingly, various group firms were merged into Sesa Goa to create a new entity Sesa Sterlite.