No caste-based job reservation in PSBs after disinvestment: Report

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Private investors will not have to comply with caste-based job reservations after the government dilutes its stake in public sector enterprises as a part of strategic disinvestment, Livemint reported. 

This move, however, will not impact the current employees belonging to the scheduled caste, scheduled tribe, physically handicapped, etc.  

To make sure that the management adequately protects the staff after the control is transferred to a private entity, the government will negotiate terms and conditions in the shareholders’ agreement (SHA). 

Citing a policy document of the Dipam, sources told Livemint that a “trade off" is possible. This document says: “Government, in a welfare state, would like to look after the staff interest. There obviously has to be a trade-off, however, between the protection that the employees can be given and providing to the strategic partner a degree of freedom to run the firm. These competing interests would have to be carefully balanced in drafting the agreements."

William Vivian John, partner at law firm L&L Partners said, “A shareholders agreement sets out the terms agreed between the shareholders on how the business will be run, the extent of control each shareholder will have and, how governance decisions will be taken regarding the business." Being a document that governs future business, it can stipulate terms regarding existing employees, he added.

“The reservation issue has been also clarified in the Parliament vis-à-vis BPCL (Bharat Petroleum Corp. Ltd)," said the first person, who is advising the government on disinvestment matters.
Private investors will not have to comply with caste-based job reservations after the government dilutes its stake in public sector enterprises as a part of strategic disinvestment, Livemint reported. 

This move, however, will not impact the current employees belonging to the scheduled caste, scheduled tribe, physically handicapped, etc.  

To make sure that the management adequately protects the staff after the control is transferred to a private entity, the government will negotiate terms and conditions in the shareholders’ agreement (SHA). 

Citing a policy document of the Dipam, sources told Livemint that a “trade off" is possible. This document says: “Government, in a welfare state, would like to look after the staff interest. There obviously has to be a trade-off, however, between the protection that the employees can be given and providing to the strategic partner a degree of freedom to run the firm. These competing interests would have to be carefully balanced in drafting the agreements."

William Vivian John, partner at law firm L&L Partners said, “A shareholders agreement sets out the terms agreed between the shareholders on how the business will be run, the extent of control each shareholder will have and, how governance decisions will be taken regarding the business." Being a document that governs future business, it can stipulate terms regarding existing employees, he added.

“The reservation issue has been also clarified in the Parliament vis-à-vis BPCL (Bharat Petroleum Corp. Ltd)," said the first person, who is advising the government on disinvestment matters.



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