In one of these cases, the union has argued that a wage pact signed in 2017 required the service terms of workmen to be included in any future arrangement, including restructuring, of the plant at Talegaon near Pune. Hence, GM’s term sheet with Great Wall Motors should have included the transfer of workforce, the union claimed.
GM spokesman George Svigos told ET that the staff union is arguing contradictory positions – both against the sale of the plant and for employment continuity with the buyer. The company does not propose to deal with union through the media and GM firmly believes it has remained in compliance with applicable laws and it is prepared to defend its position, he said.
GM, the spokesman said, had clearly communicated to the union and all employees that there would be no transfer of workforce when the term sheet was signed in January 2020.
“The fact that employees would not transfer to the new owner as part of the sale was communicated to all stakeholders including the union and employees on January 17, months before Covid affected India. The company gave almost 12 months’ notice of the end of GM production and communicated on numerous occasions that it is prepared to offer a separation package in excess of legal requirements,” Svigos said.
To be sure, Maharashtra has rejected the closure application by the US carmaker. General Motors had expressed its surprise on the move and had said Mantralaya’s decision to ‘prevent an orderly exit of a long-time investor’ is surprising as it ‘diverges sharply’ from the state’s business-friendly reputation.
There are two separate disputes being lodged against the company – one at the Industrial Court and the other at the Bombay High Court on the closure of the plant.
A case in Bombay High Court pertains to the fact that GM entered into a sale agreement with Great Wall Motors without approval from Maharashtra Industrial Development Corporation (MIDC), which is owner of the land. MIDC had tendered the property to General Motors on a long- term lease. According to the Urban Land Ceiling Act, for the sale of the leased land, a buyer (GM) needs to take permission from MIDC before entering into an agreement.
Against the statutory requirement of 15 days’ compensation for each year of service rendered by an employee, GM is offering 75 days compensation for every year of service rendered and this may be renegotiated on the higher side if the union formally negotiates, the company said earlier.
Svigos reiterated that since 2017, the local leadership at the plant has communicated that it was exploring strategic options for the future. In 2019, it was confirmed there would be no new product program after the current program finished. Since January 2020, the company has communicated that employee transfer was not part of the sale.
According to the union president, they have reached out to the management over a dozen times to get assurance on job security, but the management has been non-committal. The union claims it is ready to have a positive discussion with the management.
Svigos says it is absurd for the union to claim that it is not aware the company wants to negotiate the separation package and wage agreement.
“The company has already put forward a proposed significant wage increase backdated to the expiry of the last agreement, to the period when the plant was not operational due to Covid, as well as a separation package in excess of legal requirements. The company has also paid significant bonuses, despite the difficult economic situation,” added GM spokesperson.
The union president said there was no production outage through the lockdown months.
GM, on its part, said it paid full wages during the entire lockdown, without requiring negotiation with the union and the company invested significantly to implement a comprehensive Covid 19 protocol with no input from the union when production resumed.
In a number of locations globally, company employees were required to defer or sacrifice salary, but local leadership did not apply this to the hourly workforce at the Talegaon site, GM said