Court Stalls Kec Implementing Vrs

The Bombay High Court has asked the Rs 660-crore KEC International of the RPG group to temporarily stop its voluntary retirement scheme (VRS) at its Kurla plant and resume payment of wages to its workers.

In a judgement on April 17, justice F I Rebello of the Bombay High Court said, The company has been restrained temporarily to act on the VRS application or to refuse to allot work and to pay wages to enlisted workers till further orders with a further direction that the 55 enlisted employees be allowed to work and be paid wages subject to the deposit of their cheques with the respondent company.

However, the company has obtained an eight-week stay on implementing the order and is in negotiations with its workers, said a union member of the Kamani Employees Union, of which the KEC employees are members.

HM Singh, president of KEC, said: We are studying the judgement and will seek legal opinion on the matter. If advised that we have a case, we will go for an appeal against the order. In the judgement, the court has also held that it is mandatory for employers to give 21 days notice to workers and their unions while offering VRS schemes. The judgement is important in view of the VRS being offered by several companies.

The court was acting on three writ petitions filed by the All India Blue Star Employees Federation, Kamani Employees Union and KEC International Ltd.

The court rejected the plea made by the employers that the VRS is purely an arrangement between employers and individual employees and does not in any way affect the service conditions of those employees not accepting VRS.

KEC had offered a VRS to its workers at the Kurla plant, which was accepted by 645 of the 690 workers at the plant.

Later, 92 workers wished to withdraw their applications, saying the VRS applications were made under misunderstandings and without looking into all the consequences. However, the management had refused.

The VRS cheques had subsequently been sent by post to the workers, who did not encash the cheques and appealed to the high court for reinstatement. The employees have said the VRS was used by the management to illegally shut down the plant.

If KEC has to reinstate the workers, it would be a major setback to its plans of shutting down the Kurla plant.

The workers have contended that the management forcefully made them accept the voluntary retirement scheme.

The Mumbai industrial court is looking into alleged coercion and use of force by the management of KEC International to make employees accept the voluntary retirement scheme offered by the company, claimed the employees union.

The union has also opposed KEC Internationals merger with RPG Transmission.