Financial Daily from THE HINDU group of publications
Wednesday, Apr 24, 2002
Money & Banking
Oriental Insurance set to restructure workforce
KOLKATA, April 23
ORIENTAL Insurance Co. Ltd is gearing up to restructure its workforce. It has circulated a notice stating that all officers, except those of Class II, may be transferred even if they are not being promoted.
As expected, the notice was not accepted with a broad grin. Trade union sources said that a section of the employees had carried out a token protest against the decision of the management sometime last week.
According to the transfer policy adopted by Oriental Insurance, officers who had already completed 10 years in the job were likely to be transferred from one region to another. For those whose experience was within the period of five to ten years were likely to be transferred from one branch to another but within the same region.
The management is also considering going ahead with the programme of branch consolidation. However, for the time being, it will start with its branches in the smaller cities. Once it is successful, the programme is likely to be extended to the metros.
It may be noted that the transfer policy has been approved by the boards of all the four nationalised public sector companies. It is just a matter of time and soon it will be introduced in the other three companies.
"We were the first to introduce the transfer policy just because our schedule for employee promotion has fallen due before that of the others. It is just a coincidence, if it can be said so. The other companies are also likely to introduce it soon'', sources in Oriental Insurance told Business Line.
The four insurance companies were also contemplating the introduction of six working days a week against the existing five days a week. However, a technical problem was involved here.
To introduce this working arrangement, the four companies will have to get the proposal approved by the board of General Insurance Corporation (GIC) because they are still (legally) subsidiaries of GIC. Parliament is yet to amend the Act and delink the four companies from it.
"There is a second option and that is through government notification. However, this route will take a longer time. So, the managements of these companies have requested the GIC top brass to approve the matter at its earliest board meeting'', industry sources said.
It may be noted that in an attempt to reduce the financial cost of business, General Insurers' (Public Sector) Association of India (GIPSA) has proposed consolidation of the office network among its four member companies in the beginning of the year.
According to its proposal, the consolidation was supposed to have been carried out in two phases. In the first phase, which was then scheduled to be over by March 31 last, offices located in the same building, metro and city will be consolidated subject to space availability.
In the second phase, the consolidation would take place within a radius of 100 km. In the absence of a second office, an unviable unit of a company can be merged with a viable unit of another company.
According to GIPSA, the Insurance Act permits a maximum level of 19.5 per cent on cost but the branches and divisions will have to operate at a cost of 10 per cent and 14 per cent, respectively. It calculated that half of the offices are functioning at a cost of more than 20 per cent.
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