Feeling Trapped in a Joint Venture: How Can We Address Unfair Treatment and Lack of Policies?

Employment Issues at Joint Venture Company

I and four other executives were recruited and posted by a PSU at one of its joint venture companies with a state government. We have been subjected to physical, mental, and social trauma for the past five years due to the prejudicial behavior of our employer. We have not been given the revised pay effective from January 1, 2007 (even though it was mentioned in the advertisement) or promotions since joining. We applied to the PSU through an open advertisement, were interviewed, and based on the interview, received an Offer of Appointment from its joint venture company and were posted here. The full management of the JV is controlled by the PSU company only.

After joining, the employer informed us that we would be treated as employees of the JV company since we accepted the offer from the JV. This information was not disclosed before joining, and this JV company does not have any policies related to pay, perks, promotions, etc., even after five years of our joining. They are now planning to establish company policies such as pay structures, promotion policies, etc.

We are requesting the company management to treat us as your employees since we were advertised, interviewed, and posted at your JV. It was also mentioned in the interview letter that we could be posted at any of its JVs or subsidiaries.

Please provide legal guidance on this matter as we seek clarification from the company management.

Thank you.

Understanding JV Company Policies

JV company policies differ from those of the PSU. It is your mistake not to analyze this properly. For example, NTPC has a stake in more than a dozen JVs. One can't expect the pay structure of JVs to be on par with NTPC. Of course, some JVs pay more than the PSUs. It depends on the policies framed by the JV partners, their line of business, profitability, etc.

Regards,
Pon, Chennai

Questions Regarding Recruitment and Policy Establishment

1. How can a company (a joint venture of a reputed Maharatna company) recruit an employee without establishing their basic policies and pay structures, etc.?

2. Why was the joint venture company deceitful in making false promises that they would pay at par with a PSU? If they are unable to fulfill this promise, why did they reference a PSU advertisement? If they used the advertisement as a reference, they should be obligated to pay at par with our advertisement.

Regards

"Understanding 'At Par' in PSU Employment

\"At Par\" is a subjective term. For example, only Basic will be at par.

Employment in PSUs and Their Subsidiaries

Usually, PSUs in their advertisements state that employees will be absorbed in their own company or their subsidiaries, not their JVs. The JV is a separate entity with its own Board of Directors.

Again, the salary structure of even the PSU and its subsidiaries may differ, and the decision rests with the company on where to place a candidate - in the PSU or its subsidiaries. However, it is clearly mentioned in the advertisement that the candidate may be placed in the PSU or any of its subsidiaries. It is difficult to believe that a PSU would make such an error.

Management Control and Pay Parity

Full management control does not imply pay parity. I am surprised that a Maharatna PSU or even the State Government would make such a silly error. The exact advertisement needs to be reviewed. Perhaps you could provide a link or share a copy of the newspaper cutting before any advice can be given.

Regards."

Recruitment Process in PSUs

Most Public Sector Undertakings (PSUs), specifically Maharatnas, have a definitive process for recruiting their executives. This process typically includes a written test followed by a group discussion and interview. Some candidates are recruited directly from premier institutes. However, in the case of medical practitioners in the company hospitals, the recruitment process may involve only an interview.

It is extremely rare for PSUs to recruit individuals at the mid-level. Typically, recruitment occurs at the trainee stage or for parallel transfers/appointments at the highest levels, such as appointing a chairman, which is done through the Ministry and the Bureau of Public Enterprises.

Transfer Policies in PSUs

A PSU employee (executive) may be transferred from their current unit within the PSU to its subsidiaries, regardless of whether the subsidiaries have the same or different pay scales. The employee's basic pay will be protected, but they will then be fitted into the subsidiary's scale of pay and perks. Many PSUs nowadays have a common pay scale for both their subsidiaries and their own units.

Additionally, an employee may opt for a transfer to a joint venture company of the PSU, provided there are vacancies and both parties agree on the parallel transfer. However, this transfer is only possible through mutual consent.

Operational Principles of PSUs

While PSUs may have slower processes, they operate within the principles of natural justice and the laws of the land. The Right to Information (RTI) route is always available, but it is crucial to be absolutely certain about the information in the official advertisement before filing an RTI request.

Thanks & Regards

Protecting Your Identity

Remove Annexures I & II to protect your identity. Don't share personal information on public forums.

In this case, the PSU has not followed the conditions displayed in the advertisement or call letters. They should have clearly mentioned the pay policies of joint ventures.

Regards,
Pon

Dear dineshsinghntecl, I checked the NTPC job site for the advertised detailed terms & conditions. However, I couldn't find it since your appointment was around January 2007. Perhaps they have removed old posts from their website.

After reviewing the Annexures, I would like to point out Annexure II, Point E, which states:

"Posting is likely to be at any of our Projects/Units/Stations/Joint Venture Companies/Subsidiaries depending on the requirement/exigencies of work."

• Posting can also be in JVs and subsidiaries.
• The pay scale at the JV or subsidiary may not be that of a PSU. In many of the Maharatna subsidiaries around 2007, the scale was lower than in the Company itself. Later, many PSUs brought them to the same level as the parent Company. In the case of a JV, which is a separate Company, service rules will be regulated by the rules of the JV and not the parent Company.
• If you observe the major PSUs, you will notice that recruitment is done for Management Trainees. The training period is 1 year, and then they are placed with 2 or more advanced increments in the E1 scale. In this advertisement, the requirement is for E2, E3, and E4 levels. It is a direct interview call rather than the usual process of Written test + GD/Interview, which is typically followed for the MTs. It is evident that the advertisement was mainly for their subsidiaries and JVs. NTPC, like other Maharatnas, does not hire in the E2-E4 scale and prefers fresh young individuals. Such large companies do not heavily rely on experience as they already have a wealth of experience within their own ranks. Additionally, there are no documented rules preventing or barring recruitment in the E2-E4 or any rank for that matter.
• Annexure-I does not mention any pay scales. I am unsure about the detailed advertisement as I have not seen it.

From what I have gathered from the above 3 annexures, there shouldn't be any complaints since it clearly states that you may be posted at the JVs or subsidiaries. Without specific pay scales mentioned, it can be interpreted in various ways. Your appointment letter specifies your scale of pay, and you accepted their offer willingly. E1 or E2 does not necessarily mean NTPC scale E1 or E2. As you may know, PSUs are categorized into Maharatnas, Navaratnas, and Miniratnas, each with varying scales. Even within the same category, there are differences in the number of advanced increments, perks, facilities, and other factors during wage revision. Therefore, slight differences may exist.

Hence, there is no basis for your expectation. Legal recourse or RTI may not be helpful.

Thanks and Regards,

PS: NTPC has a JV with SAIL, and the pay is almost equal to NTPC/SAIL scales of pay. The scale of pay in a JV depends on the JV companies and their pay scale. Your scale may align with the state government scale.

Thank you.

Please see the advertisement (http://www.ntpccareers.net/et14/my_files/advt.pdf) for direct Management Trainee recruitment in NTPC (and not its subsidiaries or joint ventures). The scales and the basic pay are clearly mentioned. This reinforces what I mentioned earlier: if the Public Sector Unit recruits for the parent company, the scales and the basic pay will be clearly stated, leaving no room for ambiguity.

Thanks and Regards