Voltas allowed to close down CABD unit

Our Bureau

Pune, Jan 4: In what could be the first of its kind, the state government has permitted Voltas Ltd to close down its cooling appliances business division (CABD) at its Thane plant. The state commissioner of labour NS Gajbhiye passed an order under Section 25-O of the Industrial Disputes Act and allowed Voltas to end the 161-workmen employed at the CABD unit.

The commissioner has directed the company to pay closure compensation to the workmen at the rate of 30 days’ wages instead of 15 days wages as provided under Section 25-F(b) of the Act for every completed year of service or pay benefits under the VRS scheme announced by the company on November 1, 2000. whichever is more beneficial to the workmen.

The company’s contention is that there was no work for the workmen with capacity utilisation at present being zero. The division’s production reduced by 78 per cent during the last seven years. Total value of output fell from Rs 67.88 core in 1993-94 to Rs 14.40 crore in March 2001. During the last 12 months there was no production activity as no orders were booked between April 2001 and September 2001.

Total turnover of the division was less that the average months recurring expenses. The losses made by CABD was subsidized by profits made from other business operations which the company feared would be wiped off if the CABD was not closed down.

Cumulative losses had gone up to Rs 36.92 crore. The court accepted the company’s contention and issued the order offering adequate compensation to the workmen.