Supreme Court Ruling: Can Workers Refuse New Management and Claim Compensation?

Dear friends,

Supreme Court Judgment on Worker Compensation

The Supreme Court, in its important judgment dated 19.11.2011 (copy attached), has held that workers cannot be forced to work under new management without their consent. In such an event, they are entitled to retirement/retrenchment compensation under the Industrial Disputes Act.

Case Study: Philips India Ltd

In this case, Philips India Ltd had entered into an agreement for the sale of its consumer electronics factory at Salt Lake City, Calcutta, with Kitchen Appliances India Ltd. Some of the workers opposed the move and demanded compensation. The management argued that the workers had neither been retired, resigned, nor retrenched, and hence the question of payment of compensation should not arise, which was turned down by the court.

Regards,

I appreciate your efforts, Mr. Aggarwal, to make all of us aware of such a decision with a copy of the honorable Supreme Court. Thanks, and I hope you will continue sharing important issues in the future too.

Regards,
Subhash Sharma

In my opinion, it's an unfair judgment towards employer management. My points are:

- The majority of employees joined the new management. Only 35 employees objected to joining.

- It is mentioned in the judgment that the transfer of employees does not affect compensation and benefit levels.

- The VRS scheme was not availed during the stipulated time when offered.

Objections and Concerns

What is the objection of the workforce? Are there any negative effects on their employment, demotions, or cuts in compensation? It is mentioned that such a transfer will not affect the continuity of employment.

Is the objection simply because the workforce was not consulted or informed of such a transfer, or is it that the workforce doesn't like the new bosses and is extorting management to let them go?

Employer's Perspective

Consider the employer's point of view as well. When employees are safeguarded from any harm, what is the employees' objection? They are employees, not owners of the business. Shareholders who invest money in the business shall have the right to make decisions, keeping in mind that no rights of any stakeholders are reduced or violated.

Please correct me if I am wrong in my opinion.

Once the company has transferred its assets, liabilities, and employees to the new management or company, it is understood that the new company must pay the final benefits to all employees for their entire service period without any deductions or recovery, for the duration that the employee has worked in both the new and old company.

Thank you for sharing the judgment with our members, Mr. Agrawal.