Even as Hyundai Motor India and General Motors India have entered into an asset purchase agreement for the Talegaon plant, the protesting Workers’ Union is expected to continue its legal battle and seek continuity of employment under the new owners.
Autocar Professional learns the Workers’ Union has challenged the Industrial Court’s verdict to clear the sale of assets by General Motors to Hyundai Motor in Bombay High Court, and the same is expected to come up for hearing on 22 August.
The commercial agreement was signed after the Industrial Court had cleared the closure application and it was further approved by the Maharashtra State Government’s labour department.
In its verdict, K N Gautam, the presiding officer of the Pune Industrial Tribunal, after considering the evidence led by both parties, the contentions and pleas raised and cited by both parties, as well as taking an overall view of the matter had stated, “I am of the considered opinion that General Motors India Pvt. Ltd. is in continuous accumulated losses. It is proven that the GMIPL has made sincere and all-out efforts to emerge from the financial crisis by implementing all available measures.”
As a result, the order allowed General Motors India Pvt. Ltd. (GMIPL) to close its Talegaon MIDC factory on April 30, 2021, by Section 25-0 of the Industrial Disputes Act, 1947. On this basis, Maharashtra Labour Minister Suresh Khade granted General Motors permission to close its facility on July 5, 2023.
When queried, a General Motors India spokesperson said, “Employees who have been affected have already received statutory benefits, and we invite them to come forward and claim the remainder of the separation package. The employees can contact the plant’s human resources team to begin the final settlement process.”
Despite signing the agreement, the official statement from Hyundai Motor India clarified that the completion of the acquisition and assignment is subject to fulfilment of certain conditions precedent and receipt of regulatory approvals from relevant government authorities and relevant stakeholders.
Closure application approved, NOC awaited
While the closure application has been received, the No Objection certificate is yet to be received, say sources.
Sources in the Maharashtra Industrial Development Corporation say that if the workers do not accept the proposal, “both parties will move the Court to seek an early resolution of the issue and it will be extremely difficult for MIDC to proceed without the worker’s consent and their NOC.”
“It is well known that MIDC cannot approve the GM Hyundai deal and grant the requisite permissions without first receiving a NOC from the labour department.” And without resolving worker’s dues, the Labour Department, which has approved the closure, will be unable to give the final go-ahead to operationalise the agreement,” a top MIDC official told Autocar Professional.
The state government’s two key ministers, Labour Minister Suresh Khade and Industries Minister Uday Samant confirmed that the state is doing everything possible to resolve the differences with the former GM workforce, which has become an impediment in the transfer of GM’s Talegaon plant to Hyundai Motors India.
The Maharashtra government has supported Hyundai Motors’ Rs 5,000 crore investment in the state, and has also supported the employees’ cause as well as the opportunity to generate employment for 4500 unemployed and underemployed youth.
As reported by our sister publication Autocar India, Hyundai is planning to have an annual production capacity of 130,000 units to manufacture the second-generation Venue SUV in India by 2025 and it also has plans to increase the manufacturing capacity of the refurbished plant, as demand picks up. Hyundai India has announced plans to launch six electric vehicles in India by 2028, with the Creta EV expected to hit the market by the end of 2024.
Maharashtra government mediates to resolve workers’ impasse
Industry Minister Uday Samant had previously stated that Maharashtra Chief Minister Eknath Shinde had met with the protesting workers. Meetings with Union leaders have also been scheduled by the state industry department to resolve outstanding issues.
“Establishing Hyundai in the state is also in the best interests of the labor Union. I am confident that Hyundai will operate with worker welfare as their guiding philosophy,” said Industries Minister Samant.
On the possibility of the Mumbai High Court granting them relief, the President of the Workers’ Union, Sandeep Bhegade said, “We are exploring all legal options. We would not comment because the case is subjudice and pending before the Mumbai High Court.”