'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...
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 leaves to the new employer for licensed cadre employees
- Another demand placed by the trade union in line with the recommendations of the bilateral committee is that gratuity must be paid to all employees before disinvestment. With regards to the provident fund, the total fund available in an individual employee account with the Trust should be transferred to the EPFO.
About the recommendations and their enforceability, the court observed as below:
"...Further, with the Mandamus prayer, the so-called recommendations as contained in the report dated 10.02.2020 is incapable of being enforced in the teeth of the SPA coming into force, unchallenged"
Background
An employee's Union had moved the Madras High Court seeking to restrain the Central Government from proceeding further with the process of disinvestment of Air India until steps are taken to protect the rights of the national carrier's staff.
In December, Justice V Parthiban granted interim relief and restrained the Civil Aviation Ministry from evicting the members of the Petitioner Union, namely Air Corporation Employees Union, from their current accommodation provided by Air India. The Bench further restrained the authorities from discontinuing the medical benefits and facilities presently extended to the members and their families under the Contributory Family Medical Scheme.
The petitioner union claimed that it is the largest trade union of Air India Limited with a membership of over 5,000 employees including cabin crew, aircraft equipment operators, drivers, instructors, supervisors, assistants, peons, helpers, safaiwalas and security staff.
The petitioner primarily contended that the terms of the share purchase agreement between the Government of India and Talace Private Limited was signed without any prior consultation and has not been disclosed to them, which violates the employees' right to know under Article 19(1)(a).
Therefore, the petition sought appropriate measures to protect the terms and conditions of service and the rights of the employees of Air India represented by the Union, post disinvestment.
Further, a writ of Mandamus was sought forbearing 100% disinvestment and transfer of Government's stake in the national carrier, until the uncertainties regarding wage revision due from 2007, leave encashment terms, and job security etc. post disinvestment is taken care of after due consultation with the employees.
In line with the recommendations recognised of the bilateral Committee consisting of three General Managers and the representatives of six unions/associations constituted for a smooth transition, the petitioners argued that they must get colony accommodation till the age of superannuation against the sudden notice for leaving the premises within six months in the background of disinvestment and the threat of eviction notice upon failing to do so.
The Trade Union also voiced a demand for the retention of SC/ST/OBC quotas in services even if disinvestment occurs, and the maintenance of status quo with regards to passage facilities for serving and retired employees. There have also been other demands for payment of arrears of salary and financial benefits as per the Justice Dharmadikari Committee recommendations(2012) and flying allowance to the cabin crew as per the order of the Supreme Court.
The respondent Central Government had argued that the SPA was signed after taking into consideration all aspects like (i)consumers; (ii) taxpayers' money and (iii) employees. The decision to transfer its shares was found to be the best remedial solution in the overall circumstances, SG submitted before the court. He also added that the report by the Bilateral Committee is mere suggestions for bargaining with the buyer and not recommendations per se. According to him, every concern of the employees was adequately met during the bargaining process after proper consultation.
After hearing the rival submissions, the court had reserved its orders on 25th January.
The petitioner union was represented by Senior Advocate R. Vaigai. Solicitor General Tushar Mehta had appeared for the Respondent Government.
Case Title: Air India Corporation Employees Union v. Union of India & Ors. & Connected Matters
Case No: WP/25568/2021 (Service)
Citation: 2022 LiveLaw (Mad) 97
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