US Carmaker’s Indian subsidiary General Motors India laid off 1,419 workmen on Friday, by invoking section 25 of the Industrial Dispute Act.
The employees Union is likely to challenge this move legally, sources in the know said.
The move may prolong a legal tussle between the company and its employees on the winding of General Motors India’s Talegaon plant on the outskirts of Pune.
The company has sent a lay-off notice to all 1419 employees over an email and the copy of the same was served to the secretary and president of the the General Motors Employees Union on Friday. ET has reviewed the copy of the notice which was displayed at the factory gate and the same will remain effective till further orders, the notice stated.
However the workmen are entitled to receive lay off compensation with Section 25-C of the Industrial Dispute Act 1947 and they will be paid compensation due to them, which is 50% of the basic wages and dearness allowance previous monthly take home.
“Since the lay-off has been declared largely because of Covid-19, being a natural calamity, no prior permission from the appropriate authority has been sought, nor is the same necessary under section 25-M of the ID Act,” the letter explained.
George Svigos, international director for communication, General Motors told ET, the company has continued to pay employees, despite no vehicles being manufactured over the last four months. He said the company’s preferred course of action is to provide employees with a separation package that supports their transition from GM.
“We have offered employees a separation package well in excess of the statutory requirement. Regrettably, the union has refused to negotiate the separation package, so the company has been compelled to explore all legal options available to the company to support the wind-down of operations at the site,” Svigos said.
The spokesperson claimed production at the Talegaon plant ceased on December 24, 2020. The company gave employees and the union more than a year’s notice regarding the end of production. No vehicles have been manufactured since production ended on December 24, 2020, and there is no prospect of the company resuming production at the site.
We have offered employees a separation package well in excess of the statutory requirement. Regrettably, the union has refused to negotiate the separation package, so the company has been compelled to explore all legal options available to the company to support the wind-down of operations at the siteGeorge Svigos, international director for communication, General Motors
The company has been incurring a monthly outgo of Rs 10 crore since December towards employee’s salaries despite zero production at the plant.
When contacted, Sandeep Bhegade, President, The General Motors Employees Union confirmed the receipt of the notice and said, the union will challenge the same with the relevant authorities.
“Our stand is we will continue to fight for our rights at various platforms,” added Bhegade.
Alternatively, the company has intimated to the additional commissioner of Labour, Pune. In a letter to the commissioner GM India said due to rampant upsurge in Covid-19 pandemic, the company has been forced to lay off workmen.
“We therefore intimate you under Rule 79-A of the Industrial Disputes Rules, 1957, that we have laid off 1419 workmen with effect from April, 16, 2021.”
Svigos added that GM India remains very confident of its legal position. “We continue to seek all relevant government approvals to support the wind-down of operations,” he added.