MUMBAI: The proposed merger between HPCL and Mangalore Refinery and Petrochemicals Ltd, if it happens, could lead to people integration issues. The senior management is also not ruling out redundancies.
ONGC, with which HPCL is now merging, holds a majority stake in Mangalore Refinery, while HPCL has a minority stake. As both HPCL and Mangalore Refinery are into refining and marketing, their merger appears inevitable, though not approved formally.
“The Mangalore Refinery merger, if that happens, could create some challenges from an HR perspective as they are also into refining like us. HPCL has big marketing operations, but it is small for them (Mangalore Refinery). There could be certain redundancies,” P K Joshi, director (human resources), HPCL told Express, quickly adding, “But right now, these are informal talks and nothing materialised. Once it happens, definitely there will be integration issues to be sorted out. Whichever redundant positions, all that has to be integrated.”
However, the challenges won’t be regarding compenstion, as both have same pay scalation, as both have same pay scales. The Mangalore Refinery employs roughly 2,000-2,500, besides contract staff.
The merger, if it gets relevant approvals, will happen only after the HPCL-ONGC merger that is likely to conclude by the end of the third or fourth quarter. It means the Mangalore Refinery merger could be undertaken, probably during the next fiscal.
Joshi ruled out integration issues from the ongoing ONGC-HPCL merger as they operate in non-interfering areas. While ONGC is into exploration and production, HPCL is into refining and marketing.
Moreover, the basic HR policies in terms of compensation are similar and, hence, unlikely to impact integration.
HPCL employs over 10,000 full-time employees and 22,000 on contract including security, catering, housekeeping staff and those in construction of terminals, depots etc. It spends 2-2.5 per cent of the total sales towards employee expenses every year. According to Joshi, notwithstanding its merger with ONGC, the state-run refiner’s hiring plans won’t change. “We will continue with new hiring to support our expansion plans,” he said.