Ordnance Factory Employees Reject Permanent Absorption in DPSUs; 99.51% Choose to Remain Central Government Staff
AIDEF argues that the results expose deep employee resistance to the restructuring of the Ordnance Factory establishment
An overwhelming 99.51% of civilian employees of India’s 41 Ordnance Factories have opted to remain Central Government employees until retirement, delivering a major setback to the government’s corporatisation policy, according to the All India Defence Employees Federation (AIDEF).
Of the 59,318 employees who were eligible to exercise their option, 59,033 chose to retain their Central Government employee status while serving in the seven Defence Public Sector Undertakings (DPSUs) created after the restructuring of the erstwhile Ordnance Factory Board (OFB). Only 123 opted for permanent absorption into the new corporations, while 92 did not submit their options for various reasons.
The deadline for exercising the option ended on October 15, 2026.
The figures represent an overwhelming preference among employees to retain their existing government service status rather than become permanently absorbed into the corporate entities. AIDEF has described the outcome as a historic rejection of corporatisation and a vindication of its opposition to the government’s decision.
AIDEF Claims Vindication of Its Opposition
The government announced the corporatisation of the 224-year-old Ordnance Factory establishment by splitting the erstwhile OFB into seven DPSUs. AIDEF alleges that the decision was taken unilaterally and in violation of written assurances previously given to the federation.
The federation challenged the decision before the Madras High Court, which heard its petition and delivered a judgment on July 29, 2024.
According to AIDEF, the Ministry of Defence gave an undertaking in its counter-affidavit that employees would continue as Central Government employees on deemed deputation to the new corporations unless they voluntarily opted for permanent absorption.
The relevant portion of paragraph 55(a) and (b) of the counter-affidavit states:
“Employees will continue to be Central Government Employees on deemed deputation to the New Corporations unless they themselves opt to get permanently absorbed in these New Corporations.”
The government further maintained that this arrangement did not violate fundamental rights or constitutional provisions, including Articles 14 and 311.
AIDEF maintains that the court accepted the government’s undertaking and that the subsequent notification implementing the option mechanism was issued only on June 15, 2026, following sustained pressure from the federation and defence civilian employees.
59,033 Employees Choose Government Service
The option results reveal the overwhelming preference of the workforce:
- Total employees: 59,318
- Opted to remain Central Government employees: 59,033
- Opted for permanent absorption in DPSUs: 123
- Did not exercise the option: 92
- Share opting to remain Central Government employees: 99.52% approximately
The last figure is approximately 99.52% when calculated using the supplied numbers. AIDEF has cited 99.51% in its statement.
The distinction is significant: employees choosing to remain government staff will serve in the new DPSUs on deemed deputation, rather than permanently transferring to the corporate establishments.
A Challenge to the Corporatisation Policy
AIDEF argues that the results expose deep employee resistance to the restructuring of the Ordnance Factory establishment. The federation has described the outcome as a vote of no confidence in corporatisation and called upon the government to reconsider its policy.
However, the option figures establish the overwhelming preference of employees regarding their service status; by themselves, they do not amount to a formal reversal of the corporatisation decision or establish that the seven DPSUs have failed operationally.
The government has not, in the material provided by AIDEF, announced any decision to reverse the restructuring.
AIDEF Demands Restoration of Ordnance Factory Board
Following the results, AIDEF has urged the government to accept the employees’ preference and revoke corporatisation, restoring the Ordnance Factory Board as a government department with adequate empowerment and budgetary support.
The federation has also demanded that the government lift the ban on compassionate appointments and resolve the outstanding demands of Ordnance Factory employees previously submitted to the Ministry of Defence.
AIDEF argues that the Ordnance Factories are a critical component of India’s defence preparedness and that their institutional structure should support the country’s military requirements.
The immediate message from the option exercise is unambiguous: an overwhelming majority of employees have chosen to retain their Central Government employee status rather than opt for permanent absorption into the seven DPSUs. Whether the government responds to this overwhelming preference with a policy review remains to be seen.
“The verdict of 99.51% of employees is a clear rejection of the government’s corporatisation policy. The overwhelming majority have chosen to remain Central Government employees rather than opt for permanent absorption into the seven DPSUs. This vindicates AIDEF’s stand that corporatisation was imposed on the workforce against its wishes. We urge the government to respect the employees’ mandate, revoke corporatisation and restore the Ordnance Factory Board as a government department with adequate empowerment and budgetary support.” said C. Srikumar, General Secretary, All India Defence Employees Federation (AIDEF)
