General Motors Employees Union challenges layoff of 1,419 at Talegaon

GM cites global pandemic as reason for step. Firm had stopped selling cars in India in 2017 and stopped production completely on December 24, 2020

The General Motors Employees Union (GMEU) has challenged the layoff announced by the company alleging it is illegal. The move comes three days after the Detroit-based automaker invoked Section 25 of the Industrial Disputes Act and retrenched all the 1,419 workers employed by the Talegaon factory. It cited the global pandemic as the reason behind the step. The company stopped selling cars in the domestic market in 2017 and stopped the production completely on  December 24, 2020.  

“Due to the rapid upsurge of the Covid-19, pandemic, we have been forced to lay off the workmen,” GM said in a notice on 16 April. It said the company has laid off 1419 workmen under the Industrial Disputes (Maharashtra) Rules, 1957. The workmen are entitled to receive compensation with immediate effect. These workmen shall be paid 50 per cent of the total basic wages and dearness allowances, if any.

Since the lay-off has been declared largely because of Covid-19, being a natural calamity, no prior permission from the appropriate authority has been sought, nor is the same necessary under Section 25-M of the ID Act, said the notice.

In a letter to the company on Monday, GMEU said the retrenchment is illegal as the company is not well within its rights to use the provisions enshrined under Section 25-M. Neither the Central nor the State Government has declared the pandemic as a “Natural Calamity.” Therefore, GM should have taken prior permission from the appropriate authority.

Amid the pandemic, the Central and the State governments have requested the industries to take care of their employees. Leave aside, taking care, GM under the pretext of the pandemic is laying off people, said GMEU.  According to the Union, since the matter is in the District Labour Court and the final order is still pending, General Motors India should not have arbitrarily changed the terms of agreement and announced retrenchment, said the GMEU letter. A copy of the letter has been reviewed by Business Standard.    

GM had offered employees a separation package but the duo failed to reach an amicable settlement on the terms of separation. GM therefore, resorted to retrenchment for wind-down of operations at the site.

The spokesperson claimed production at the Talegaon plant ceased on December 24, 2020. The company gave employees and the union more than a year’s notice regarding the end of production. No vehicles have been manufactured since production ended on December 24, 2020, and there is no prospect of the company resuming production at the site.