Britannia Industries Ltd (BIL) pensioners have won a decade-long battle, after a Bengaluru court directed the biscuits major to pay pensions to its former employees who retired after March 2003 and also the triennial rise for them stopped in April 2004.
The city civil court in its verdict on Monday found pension fund trustees of the covenanted staff pension fund (CFSP) “guilty of breach of trust” and, therefore, unfit to act as trustees. The current pension fund trustees are directors of Britannia. A Britannia spokesperson said the firm could not comment, as they had not received the court order.
Britannia had converted the defined benefit pension scheme to defined contribution type with retrospective effect, to deny the pensioners dues since 2003, going against the existing fund rules.
“The decision to deny pensions was taken arbitrarily. We hope Britannia honours the court verdict and pay the dues,” said Ashit Sarkar, the 82-year-old vice-president of the BIL Pensioners Welfare Association. Sarkar, advisor and senior vice-president, HR, Britannia, was the pension fund trustee of the firm.
Crest Law Partners, the lawyers for the Association, said the court’s verdict directs Britannia and the trustees to restrain from making any changes to the pension funds.
About 200 members of Pensioners Welfare Association (approx 220+), who retired from BIL, have been fighting a protracted legal battle with BIL against this retrospective change, contrary to their terms of service and promises made.
The pensioners had argued that the arbitrary change in pension rules by Britannia would have reduced the accumulated benefits during the entire service period to a fraction of the eligible pensions and would also take away the benefits available to the spouse and children of a deceased pensioner — as had been provided in the fund rules.