[BREAKING] Madras High Court dismisses plea by employees union against Air India disinvestment

The Madras High Court on Friday dismissed a plea by the Air Corporation Employees Union seeking directions to the Central government to protect their rights and service conditions before the government proceeds with Air India's disinvestment and privatisation [Air Corporation Employees Union v. Union of India]..The High Court said there was no enforceable right calling for its intervention and an economic policy decision cannot be subject to judicial audit in a routine manner. "An economic policy decision in furtherance of larger public interest cannot be subjected to judicial audit habitually or routinely merely on the ground that there was no opportunity of hearing afforded to the employees," the judgment said. Therefore, it is too late in the day to stall the process of disinvestment merely on such slippery challenge, it added.The Court further said that a prayer for the issuance of a writ of mandamus seeking negative direction pre-supposes a presumption that everything was wrong with the disinvestment process."It is too late in the day to draw any such presumption after signing of the Share Purchase Agreement (SPA)," the Court made it clear.The Court had reserved its orders in the plea on January 25..- Justice V Parthiban dismissed the plea seeking protection of employees' rights to medical treatment, housing etc;- Petitioners argued lack of fairness and stated that the Court needs to interfere in the interest of thousands of employees and their families;- Respondents argued that everything possible has been done to ensure the interest of workmen is protected;- The Court said that the employees' right to be heard was not inviolable when juxtaposed with a monumental economic policy decision;- The Court said that the government handed out a fair, reasonable, just and equitable package to the employees..The petitioners before the High Court had prayed for an order forbearing the Central government, Air India and the Tata Group from proceeding with disinvestment of the government’s stake in Air India without taking appropriate measures to protect the terms and conditions of service and rights of the employees of Air India.The plea arose from the decision of the Central Government to disinvest its stake in Air India and the agreement to this effect, entered into between the between the government and Talace Private Ltd., a wholly-owned subsidiary of Tata Sons..Senior Advocate R Vaigai representing the petitioner had argued that the employees' concern was that their service conditions must be protected.It was submitted that an agreement was reached between the employees' and Air India's management by way of a bilateral committee's recommendations, which were arrived at through consultation.The Senior Counsel emphasised that the recommendations must be adhered to and complied with before the disinvestment process."Unfortunately, since February 2020 since the recommendations of the Bilateral committee- we've been continuously making representations to the Government of India and Air India," she said.The petitioners also stated that despite several representations to the management, they received no assurance."They say we cannot continue existing medical facilities which have better terms. The basic pay of most employees is below income limit in CGHS to be eligible for better admission facilities. For housing- they are discontinuing, therefore will have to be vacated," she contended..On the other hand, Solicitor General Tushar Mehta representing the Central government vehemently argued that the government has done everything, to the extent possible, to ensure the interest of workmen was protected.However, it was clarified that the employees' interest could not trump that of taxpayers at large."We cannot forget that ultimately this exercise is being undertaken in public interest. We cannot offer them a deal that they have to refuse. At least the taxpayer money is saved."In fact, it was the stand of the respondents that a consultative process was undertaken with inputs from twenty unions, out of which nineteen were satisfied and only one had approached the Court.It was their contention that the recommendations of the bilateral committee were not a binding agreement and thus, could not be enforced by way of a mandamus."What we did, we followed deliberations, consulted, we called the twenty unions. Only one is here, other nineteen are satisfied. These are committee's suggestions, not an agreement where a prayer for mandamus would lie," the Solicitor General stated..The High Court took note of the fact that the takeover of company was already complete and the entire gamut of issues had become fait accompli or a post-mortem exercise. However, it was observed that it was necessary to deal with certain contentions raised on behalf of the employees for the sake of providing clarity on the claim of vested rights by the employees vis-a-vis the action of disinvestment, and its impact on the services conditions.“Albeit the takeover, certain concerns expressed on behalf of the employees cannot be brushed aside or disregarded on the basis of the adage, 'their goose was already cooked',” the Court observed..The primary issue that remained before the Court was whether the action of disinvestment could be held as arbitrary, offending Articles 14 and 21 of the Constitution..At the outset, the Court relied on the judgment in the case of Balco Employees' Union v. Union of India wherein a similar controversy was examined by the Supreme Court.The top court had held that in matters concerning economic decisions of the government, particularly with regard to the disinvestment policy, employees had no right to demand a hearing or consultation prior to the decision.It had also held that principles of natural justice would have no application in such matters, and observed that transparency in such mattes did not mean conducting of government business while sitting in the cross-roads in public..Justice Parthiban took note of the string of precedents holding that judicial review in such matters was almost impermissible except when the decision smacked of total arbitrariness or was unconstitutional or illegal..Further, the Court examined the issue of whether the employees were entitled to a pre-decision hearing or notice in terms of Section 9A of the Industrial Disputes Act, and whether non-compliance with such provision vitiated the entire disinvestment process..The High Court found that the employees’ right to be heard could clearly not be considered sacrosanct when juxtaposed to a monumental economic policy decision of the government taken with the aim to advance larger public interest for all the stakeholders.“..even if this Court finds any infraction in complying with any statutory provisions, public interest must be allowed to prevail. Every abridgment of right cannot vitiate the policy decision of the Government taken with a professed view, advancing larger public interest.”.To further justify its stand, the Court drew attention to the fact that more than ₹1 lakh crore had been infused into the sinking company and thus, the government was duty-bound to salvage the irretrievable situation..Despite this, it was pointed out that it was not so that the employees were not heard at all, and the participation of employee representatives in the bilateral committee could be construed as notice under the ID Act.“..it cannot be gainsaid that the interests of the employees have been bartered away unilaterally, unjustly and arbitrarily,” the Judge opined..Thus, the Court concluded without hesitation that at the end of the day the government handed out a fair, reasonable, just and equitable package to the employees and dismissed the petition..Senior Advocate Vaigai and advocate Ramapriya Gopalakrishnan appeared for the petitioners, while the respondents were represented by Solicitor General Tushar Mehta, Additional Solicitor General R Sankaranarayanan, and advocates M Karthikeyan, NGR Prasad, K Srinivasamurthy, Anuradha Dutt and R Bhardwaja Ramasubramaniam..[Read Judgment]