GM India and union to meet a court appointed mediator to arrive at solution

Both parties are scheduled to meet the mediator on Tuesday as directed by the court.

By Ketan Thakkar calendar 19 Feb 2023 Views icon7142 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
GM India and union to meet a court appointed mediator to arrive at solution

In order to arrive at a truce between General Motors India and its protesting union workers, the Pune Industrial Court has appointed an independent mediator to resolve the impending conflict between the company and its union.

Both parties are scheduled to meet the mediator on Tuesday as directed by the court, which may throw up an alternative resolution that has been hard to arrive at so far.   

The move by the Industrial Court may have been prompted by a strong directive by the Supreme Court in October 2022, which ordered both the parties to arrive at a resolution within four months.

George Svigos, Director Communication of GM International told Autocar Professional that mediation is the first step, this is the chance for an independent umpire to bring the parties together and come to an outcome. The time for some other step is over now. “We are entering this independent mediation with a hope of getting an outcome. We call on the union to do the right thing by its members and engage constructively through this mediation process. We have acted in good faith throughout, we had extended an extremely generous offer on the table, we want to get to an outcome with a mediation process.”

Almost five years since GM India decided to exit the Indian market and nearly 27 months since the US car maker last produced a car at its Talegaon factory, it is still entangled in numerous court cases with the protesting union workers.

Way back in January 2020, GM and Great Wall Motors had signed a binding term sheet for GWM to take over the plant. In November of 2020, GM India filed a closure application with the state government. By December that year, the company had ceased manufacturing at the plant.

Even as it is fighting a bitter battle with the union, GM India’s plant closure application was rejected by the state government. On their part, the plant workers have stuck to their demand for job continuity in case of sale or transfer of the factory to any potential suitor.

When the production was stopped in December of 2020, there were about 1,800 salaried employees and GM India had offered a 75 days separation package for them. The offer was available till February of 2021. This was sweetened to 110 days separation package for every year of service rendered by the employees, about 430 workers accepted the offer, the rest of the 1,086 workers were laid off by the company in July 2021. GM claimed that this package came after the company had paid employees their wages for half a year despite no vehicles being produced at the site.

It has been a rough ride for the US car maker till date. In June 2022, its deal with Great Wall Motors collapsed, whereas in September 2022, the Bombay High Court directed GM India to pay 50 percent compensation to the protesting workers.

While the same was being challenged by the car maker in the higher courts, in October 2022, Supreme Court upheld the directive by the High Court to pay 50 percent compensation and directed the Pune Industrial Court to conclude the long-protracted battle within four months - i.e., January 2023.

The workers are yet to get compensation as directed by Bombay High Court for over six months, and the union again filed a case of contempt of court and pulled the Global CEO Mary Barra and plant executives into the fray.

However, GM India has claimed all along that it is confident of its legal position and it will go about its exit formalities in accordance with the law and the legal framework.

Svigos said, “Any independent observer who will look at it and see that the company has decided to cease manufacturing almost two years ago. The package on the table that has been extended to the impacted employees is seven times of the legal requirement and well in excess of the statutory requirement. If it is viewed objectively and reasonably – our effort will be recognised. We remain confident of our legal position.”   

He reiterated that GM is not going to revisit its decision to cease manufacturing, there will be no manufacturing at that site in the future.

“I hope that the union is walking into the mediation with a view to drive to an outcome that supports people through a transition and does not pursue any, alternative theories or alternative paths. It's been two years since we built a car at the site and I think the time now is to face the facts. The vehicle production has ceased, the employees have been legally separated and we are thinking constructively on how we can best support the employees,” he added.

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