'Air India Was A Sinking Company, Interests Of Employees Protected': Madras High Court Dismisses Plea Against Disinvestment

Madras High Court has dismissed a plea filed by the Air Corporation Employees Union challenging Air India disinvestment, who feared that certain terms and conditions of service enjoyed by the employees under the erstwhile public sector management will be severely affected."Considering the fact that Air India Ltd prior to the disinvestment initiative was a sinking company, a fortuitous transformation has happened for their own good. In the opinion of this Court, various conditions of service under the SPA are the best that the Government could wrangle out from the fourth respondent towards ensuring protection of the employees' interest. Therefore, the employees conjecturing they have been treated unfairly and unjustly is misplaced and misconceived", Justice V. Parthiban observed. On the Petitioner's apprehension regarding alteration of service conditions, the Bench said,"...Any decision concerning the service conditions would obviously be taken within the framework of the existing laws on the subject. In case of any infraction, deviation or violation of any existing laws, the employees always have a recourse to judicial mechanisms. This Court, therefore, need not assume any advisory role in emphasizing the sacrosanct legal position as every private or public entity is mandated to act in accordance with law."During the course of proceedings, the takeover of Air India by Talace Private Limited was complete. However, the court noted that certain concerns expressed on behalf of the employees cannot be disregarded on the basis of the adage, "their goose was already cooked".However, in the final order, the court noted as below:"...this Court finds there are no enforceable rights calling for its intervention. A prayer for the issuance of a Writ of Mandamus seeking negative direction, pre-supposes a presumption of everything wrong with the disinvestment process. It is too late in the day to draw any such presumption after the signing of the SPA dated 25.10.2021."Before the court, the issues that demanded discussion and deliberation were as follows:1)Whether Section 9A of the Industrial Disputes Act, 1957 can be pressed into service in the matter of change of management through disinvestment process or not as in the present case? 2) Whether the terms of the share purchase agreement between the Government of India and Talace Private Limited was signed without any prior consultation and no due opportunity has been afforded to the employees?3) Whether conditions of service of the employees, in particular, with reference to their claim towards medical benefit scheme, passage rights, colony accommodation can said to be undermined and taken away?4)Whether the employees are entitled to notice or opportunity or a pre-decisional hearing in the face of the decision being taken by the Government towards advancing larger public interest as a consequence of its economic policy initiative or not?While answering the above questions, the court concluded that the Government has taken care to avoid jettisoning the interests of the employees in the best possible manner, given the difficult situation. The court was of the conviction that the interests of the Air India Employees in reference to these questions have not been 'bartered away unilaterally, unjustly and arbitrarily'.Previously, the petitioner had claimed that when the disinvestment of Air India was notified, various recognised trade unions met with the Minister of Civil Aviation to express their reservations, and as a result, a bilateral committee was constituted to submit recommendations for the benefit of employees for a smooth transition. The gist of these recommendations were as follows, along with the other demands of the Employees Union in the petition:Revision of pay scale as per the 3rd PRC (Pay Revision Committee for PSEs) recommendations of 2007 effective from 2017.Job Security till the age of superannuation, i.e., till 58 years of age against the assurance that the employees will be retained for a period of one-year post disinvestment. The draft purchase agreement clause that post one year, employees' retention will be the discretion of buyer is against the service regulations and standing orders, contended the petitioner Union.Expeditious framing of Voluntary Retirement Scheme(VRS) in case of disinvestment, that aligns with the guidelines laid down by the Department of Public Enterprises (DPE). The petitioner Union also contended that the DPE guidelines mandate that VRS must be framed prior to the handing over of a Public Sector Enterprise to new employer, citing the case of BALCO enterprises.The petitioner Union submitted that employees are entitled to gather up to 300 days of privilege leave and 120 days of sick leave and claim leave encashment at the time of their superannuation. The Committee as well as the petitioner union submits that there must be a provision for leave encashment due before disinvestment as well as the transfer of accumulated...

'Air India Was A Sinking Company, Interests Of Employees Protected': Madras High Court Dismisses Plea Against Disinvestment

Sebin James

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