General Motors India laid off all 1,419 workmen at its shuttered Talegaon plant, on the outskirts of Pune, on Friday.
The Indian subsidiary of the American carmaker invoked Section 25 (prohibition of financial aid to illegal strikes and lock-outs) of the Industrial Dispute Act to sack the workers.
The employees’ union is likely to challenge the move in court, ET Auto quoted sources as saying.
The company and its former employees are already fighting a legal battle over the plant’s closure.
The company sent a layoff notice to all 1,419 employees over email and served a copy of the same to the secretary and president of the union. Another copy of the notice was displayed at the factory gate.
The workmen are entitled to receive layoff compensation under Section 25-C of the Act.
“Since the layoff has been declared largely because of COVID-19 being a natural calamity, no prior permission from the appropriate authority has been sought, nor is the same necessary under Section 25-M of the ID Act,” the letter said.
George Svigos, international director for communication, General Motors, told ET the company had continued to pay employees despite no vehicles being manufactured since the plant closure on December 24, 2020.
“We have offered employees a separation package well in excess of the statutory requirement. Regrettably, the union has refused to negotiate the separation package, so the company has been compelled to explore all legal options available to the company to support the wind-down of operations at the site,” Svigos said.
Sandeep Bhegade, president of the union, confirmed to ET that the union had received the notice. “Our stand is we will continue to fight for our rights at various platforms,” he said.
According to a report in Autocar magazine last December, GM’s exit from India was inevitable, given it had already stopped sales in the country and closed down its Halol facility in Gujarat. The plant switched ownership when GM’s long-term Chinese ally, SAIC Motor Corp, took over operations. The company has since then worked under the MG Motor India umbrella.
GM was hoping for a similar deal with another Chinese carmaker for the Pune facility, which had continued producing Chevrolet vehicles for export markets. Last year Great Wall Motors was hoping to take over the plant and invest $1 billion, according to Autocar. But tensions between India and China has put the deal in the back burner.