Employees' Rights Upheld in Company Petition: Tribunal Directs Resolution Professional to Ensure Dues Payment

Employees of a Company sought to participate in the Company Petition and resolution plan due to non-payment issues and concerns about their rights. They requested modifications for job continuity and dues payment. The Tribunal directed the Resolution Professional to address their grievances and ensure their rights are safeguarded. Despite objections from financial institutions, the Resolution Professional increased the consideration for employees' dues. The Tribunal found the Employees' concerns were adequately considered by the Committee of Creditors, ruling the application as not maintainable but directing the Resolution Applicant to address remaining grievances during plan implementation.

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Issues Involved:
1. Application filed by Employees of a Company seeking to be made a party to the Company Petition and be heard in any proposed resolution plan.
2. Modification of the resolution plan to provide employment with continuity of services and payment of dues to the employees.
3. Grievances of workers regarding provident fund, pension fund, gratuity fund, etc., under the resolution plan.

Analysis:
1. The application was filed by the Employees of the Company seeking to be included in the Company Petition and given a chance to participate in any proposed resolution plan. The Employees highlighted issues such as non-payment of wages, illegal lockout, and non-remittance of statutory contributions by the Company. They expressed concerns about the impact of the resolution plan on their rights as secured creditors under the Companies Act. The Tribunal noted the Employees' concerns and directed the Resolution Professional to reconsider their grievances and ensure their rights are protected during the resolution process.

2. Subsequently, another application was filed seeking modification of the resolution plan to provide employment continuity and payment of dues to the employees. The Employees requested inclusion in the Monitoring Agency under the plan. The Resolution Applicant responded by considering the request for increased consideration but clarified that retention of all employees would depend on viability. The Corporation Bank and other financial institutions objected to ceding their share to accommodate increased consideration for the employees.

3. The Tribunal carefully considered the pleadings and provisions of the Insolvency and Bankruptcy Code. After reviewing the detailed calculations of the claims related to bonus, gratuity, provident fund, and wages, the Resolution Professional offered an additional amount to the workers beyond the total consideration in the resolution plan. The Resolution Applicant agreed to increase the total consideration and allocate a specific amount towards the workers' dues. The Tribunal found that the grievances of the Employees were duly considered by the Resolution Professional and the Committee of Creditors, in compliance with the law. It emphasized that decisions of the Committee of Creditors are binding on all stakeholders, including employees. The Tribunal concluded that the application was not maintainable as the Committee of Creditors had already reconsidered the claims of the Employees, and thus disposed of the application with an observation for the Resolution Applicant to address the remaining grievances during the plan's implementation.

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