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Dismissing the plea filed by the Air Corporation Employees Union alleging that Air India disinvestment process was rushed without adopting due consultative process with the workmen, the Madras High Court has said that it is "fully convinced" that amid the process, employees' interests have been protected to the hilt by the Central Government in the given situation.

Rejecting petitioners' claim that disinvestment was done in a non-transparent manner due to which the workmen will be the ultimate losers in the process, the bench of Justice V. Parthiban observed, "The Government appeared to have taken every care not to jettison the interests of its employees, leaving them in the lurch, in the bargain."

Court said, "Considering the fact that Air India Ltd prior to the disinvestment initiative was a sinking company, a fortuitous transformation has happened for their own good...this Court would have no hesitation to hold that at the end of the day, the Government handed out a fair, reasonable, just and equitable package to the employees."

Court stressed that before and after signing the Share Purchase Agreement (SPA) with Talace Private Limited of the Tata Group, the interests of the employees were sufficiently protected by the measures taken by the government.

Addressing petitioners' contention that the employees should have been given due notice/ pre-decisional hearing before the signing of the Share Purchase Agreement, Court observed, "the Supreme Court has unequivocally held that there is no right of pre-hearing that could be claimed by the employees in matters of large economic policy decision by the Government like disinvestment in public sectors."

"The Courts have recognized larger public interest involved in such policy decisions and have consistently held that judicial review in such matters is almost impermissible except when the decision is stated to be smacked of total arbitrariness, unconstitutional or illegal", Court added.

Further examining petitioners' argument that as they were not given a prior notice as per Section 9A of the Industrial Disputes Act therefore the absence of it vitiates the disinvestment process, Court held that this was "a misplaced contention and cannot, therefore, be countenanced in law."

Court clarified even if it is assumed that notice under Section 9A was mandatory, it would be a complex issue as to which management should issue the notice. Court observed, "The erstwhile employer, Government of India, which owned the company cannot be stated to be the employer anymore and it cannot, therefore, issue notice under Section 9A...As far as the fourth respondent is concerned....the relationship between the employees and the new management has hardly come into existence during the transformation time."

Therefore, Court held, "In such nebulous state of affairs, Section 9A would have no application and its scope and reach could not be stated to be extended to a situation like the present one."

Furthermore stating that a mere procedural non-compliance with a provision cannot be allowed to affect all the stakeholders in the country, Court found the writ petition as devoid of merits in the absence of any enforceable rights of the employees and dismissed the same.

The employees union had approached the court last year with a plea to restrain the Central government from disinvesting Air India without fully protecting the employee service conditions. However, the disinvestment process got completed in the meantime but the judge went into the merits of the case to determine as t whether the employees’ rights had been protected.

Case Title: Air India Corporation Employees Union v. Union of India & Ors. and connected matters