Employees can't be forced to work under new management: Supreme Court

Employees cannot be compelled to work under a new management and are entitled to retirement or retrenchment benefits, the Supreme Court has held. 

The apex court rejected the argument of Philip's India Ltd that since the employees had neither retired nor retrenched, hence they were not entitled to the benefits. 

"It is settled law that without consent, workmen cannot be forced to work under different management and in that event, those workmen are entitled to retirement/retrenchment compensation in terms of the Act. 

"In view of the same, we are of the view that the workmen are entitled to the benefit of such direction and it is the obligation on the part of the management - Philip's India Ltd., to comply with the same," the apex court said. 

A bench of justices P Sathasivam and J Chelamewar passed the judgement upholding the appeal filed by aggrieved workers of erstwhile Philip's India Ltd which had sold its consumer electronics factory at Salt Lake, Kolkata to Kitchen Appliances India Ltd. 

The aggrieved workers were not keen on continuing with the company and instead sought VRS from new management which was turned down by the company on the ground that the earlier scheme had lapsed in 1997. 

The Calcutta high court while upholding transfer of the ownership however, on October 10, 2001, directed the management to pay retirement, retrenchment benefits to the workers who were not keen to continue with their association in the company. 

As the management failed to comply with the direction, the workers appealed in the apex court. (PTI)