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Padmaja (HR)     25 August 2010

please give legal advice

Dear All

    We are medium size I.T company with 200 plus employees. As per the management decision, three years back we asked few employees to resign and quit the job but two employees refuse to resign, therefore we terminated their service. The employees who were  terminated have filed case against our company. Recently our company has been taken over by US company and now management is controlled by US parent company. Now the employees who filed case against our company have got labour court order for reinstatement with 50% back wages. Now can we  decline to implement the court order, stating now the management is new and it is controlled by US team. whether this will have any further legal problems. please give legal consequences



 19 Replies

adv. rajeev ( rajoo ) (practicing advocate)     25 August 2010

Challenge the same order in the High Court by filing a writ.  You can urge this matter before the High Court., otherwise your personal properties may be attached to recover the amount

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE )     25 August 2010

If it is a student querry no problem , since as detailed co is big so nust have legal dept. Coming to this site shows some novice is seeking advice.

Regarding querry you will any relief from any court against termination of persons without reason or any fault on their part.

DEFENSE ADVOCATE.-firmaction@g (POWER OF DEFENSE IS IMMENSE )     25 August 2010

Because of the  FEEDBACK ICON  of the site comes in between so there are spelling mistakes.

I have given reply that no COURT will relief to any employer for termination of employee for no fault of his or her.

H. S. Thukral (Lawyer)     25 August 2010

It appears that at the time of transfer of establishment to US company you took this step of advising employees to resign and two of them resisted and were terminated without paying them retrenchment compensation. Am I correct?

You have not been properly advised at the time of transfer of undertaking. You are now saddled with the LC Award  of reinstatement. You can file an appeal in HC ( Writ Petition under Art 227) or to accept the Award. However after reinstating you can terminate the employees as per provisions of section 25 FF of the Industrial Disputes Act. 

R.Ranganathan (Advocate)     25 August 2010

You have not mentioned whether you had referred your position before the LC about the transfer of your establishment. You can approach the LC for review on the said ground or else the HC against the LC award stating that you are a different entity now and so cannot reinstate the employees agreeing to pay them the retrenchment compensation since the termination is not proper.

Padmaja (HR)     26 August 2010

Thanks for the reply

        our company was officially taken over in the month of  May 2010 and we did not place this fact before labour court because we did not retrench any employee as  I.D Act 25FF, on the other hand new management retained all the employees. and Now we can reinstate old employees but the problem is backwages as we have to pay for more than three years.   

R.Ranganathan (Advocate)     26 August 2010

The best solution for you is to talk to the employees and arrive at some settlment. Also you can approach the LC or the HC stating the facts and your position, your readiness to take back the employees without the backwages and ask for review of the award.

H. S. Thukral (Lawyer)     27 August 2010

There is no power of review on merits with the LC except to review procedural wrongs like ex-parte proceedings etc. You can go in for appeal in HC by filing a writ pet. under Art. 226/227  and in between try to bring the workmen on negotiating table. 

Padmaja (HR)     27 August 2010

thanks for your valuable suggestions. but my query was if we decline to implement court order saying now management is new? is it a legally correct under facts and circumstances? if yes, is there any high court or supreme court order w.r.t this contention

R.Ranganathan (Advocate)     27 August 2010

What do you mean by management is new. What about the company. Is it the same company. Just because the management is changed the company name and its activities do not change. Further you are continuing the same company. It the earlier company is liquidated and not in existence then you can inform the court about the same or else let the employees pursue the matter with the LC for implementation of the award. At that time you can represent on behalf of the earlier company stating that it has been liquidated and not in existence hence the award cannot be implemented.

chandrasekkar c k (advocate)     30 August 2010

you cannot decline to implement a competent court verdict. you have to seek judicial review in higher forum and get it modified in a manner known to law new company is a successor in interest therefore it cannot be said so unless and until the take over was with specific liability clausen. As far as review before labour court is concerned it becomes functus officio after passing award. appeal to high court will be the proper course. in the meantime, after filing petition in high court, go to mediation and try to settle the issue of backwages.

Padmaja (HR)     01 September 2010


     The management of the company is new but the new management has retained entire staff as informed earlier, the running company has been taken over by US company and the activities of the company is continued as earlier.  My view is because the termination of employees was done by previous management is there any legal binding on the new management to implement award made against the previous management. what is the correct legal position here. please clearify

Padmaja (HR)     30 September 2010

Dear legal experts

    My query regarding clearification is pending for almost a month  but no answering is forthcoming does this mean my view expressed above is not legaly correct and we have to implement award or we will have to challenge the award in HC.

chandrasekkar c k (advocate)     01 October 2010

you have no other alternative except to approach the High Court against the Award. Please do it immediately and try to get a stay order.

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