Supreme Court directs GM India to pay 50 percent salary to Talegaon plant workers

In a major shot in the arm for over 1,000 protesting workers of General Motors India’s Talegaon plant, the Supreme Court of India, on Friday, upheld the directive of Mumbai High Court and the Pune Industrial Court to the US car maker to pay 50 percent salary to the employees.

The highest court in the country has also directed the Industrial Court in Pune to conclude the long-protracted battle within next four months.  

General Motors India had fired a total of 1,086 permanent workers at its Talegaon plant illegally without seeking government permission and challenged the workers in the industrial court.

In its Friday verdict, the Supreme Court noted that the order impugned is an “interim relief” granted to the workmen and therefore, in that circumstance, it sees no reason to interfere.

However, taking into consideration that interim relief is payable to more than a thousand employees and the issue, in any event, is to be decided by the Industrial Court on the jurisdiction and merit, it directed the Industrial Court to consider the matter on its merits “as expeditiously as possible and dispose of the dispute raised within four months” from the date a copy is made available.

“The parties to the litigation shall cooperate with the Industrial Court without seeking for unnecessary adjournment,” added the order.

A 50 percent salary was ordered from April 7, 2022, till the final decision of the case, by the Pune Industrial Court. 

This order was challenged in the Bombay High Court by the company and after the Bombay High Court’s verdict in favour of workers in September, General Motors India had challenged the same in the Supreme Court.

In an email response to Autocar Professional, the General Motors India spokesperson said, “We note the decision of the Supreme Court. We will assess our options upon receipt of the court order.”

The US car maker had reportedly argued that state authorities failed to consider the pressing need for closure while rejecting the application for closure of the car manufacturing unit. The company also argued that it can’t be forced to run an industrial unit at a loss.

General Motors had entered a term sheet in January 2020 with China’s Great Wall Motors for the transfer of the manufacturing facility.

However, due to unresolved legal conflict with workers for over two years and the Chinese car makers’ inability to get clearance for its $1 billion FDI proposal from the Government of India, the term sheet to sell the plant to China's Great Wall Motors expired on June 30, 2022.

General Motors India has been independently pursuing other suitors to sell its factory, amid this legal battle. Homegrown car maker Mahindra & Mahindra is amongst several other automakers who have already visited the Pune plant to consider acquiring the factory.

While, the legal battle is expected to continue, the mood of the legal team and worker's union is optimistic given the recent positive court verdicts. 

"Non-compliance with court orders is not an easy thing to continue doing indefinitely, eventually one will have to face very severe consequences," says  Rahul Kamerkar - advocate for General Motors India Workers Union.

Karemkar told Autocar Professional that his chamber was reasonably confident of succeeding in the Supreme Court, the same way that it had succeeded in the Industrial Court as well as in the High Court.

"As a lawyer it is rare to be given such an open-and-shut case in your favour, at least when such a large commercial stake is involved. The four months given to the Industrial Court is also beneficial to The Union, as it only means that after four months, the workers will be granted 100 percent wages (with back wages and interest) instead of the 50 percent that they are currently supposed to have been receiving," said Kamerkar.

The Union has already begun contempt proceedings and criminal complaints against General Motors and its senior management, for non-payment of the monthly 50 percent wages till date (despite there being three court orders, up to the Supreme Court, for the same), claimed Kamerkar.  

"A lot of time has already been illegally wasted by non-compliance of the original Industrial Court Order till date. While the workers are indeed suffering with no source of income to feed their families, unless General Motors decides to negotiate with the Union or pay the workers’ wages, General Motors’ assets are likely to get attached and liquidated, and senior managers likely to face fines and imprisonment. Non-compliance with court orders is not an easy thing to continue doing indefinitely, eventually one will have to face very severe consequences," Kamerkar.