HC refers HLL arm closure to tribunal

The Bombay High Court has disposed of the appeal filed by the Hindustan Lever Employees Union (HLEU) against the Labour Commissioner's order allowing the closure of the Sewri factory of Bon, a subsidiary of Hindustan Lever (HLL).

The court has directed that the matter be referred to the industrial tribunal for full adjudication. The company will have the right to challenge the said reference.

Meanwhile, the voluntary retirement scheme (VRS) ordered by the Labour Commissioner will remain valid till August 26. Bon had challenged a part of the order of the Labour Commissioner where VRS benefits were offered in excess of the closure compensation fixed by law.

The said petition has been admitted and will be decided by the court later. Bon has clarified that workmen opting for VRS on or before August 26 will not be affected by any later order of the court.

Bon had earlier paid the statutory compensation payable to the workmen as per the Industrial Disputes Act 1947. About 900 workers will be eligible to receive about Rs 14.5 lakh each as VRS in monthly installments till the normal retirement age of 60 years apart from the PF, gratuity that is accumulated till date and leave encashment which will be on an average Rs 10 lakh per worker.

Bon had closed its Mumbai facility since June 26 as the undertaking had become unviable due to competitive pressure arising out of the changing economic environment, locational disadvantages, high overheads, extensive litigation with labour etc. The company has been incurring a loss of Rs 15 crore per annum.