Drish Shoes Workers Union Vs Drish Shoes Ltd. (NCLAT Delhi)
n the case of Drish Shoes Workers Union Vs Drish Shoes Ltd. decided by the NCLAT Delhi, the central issue was whether the workers of Drish Shoes Ltd. were entitled to claim their dues for the layoff period following the company’s insolvency proceedings. The workers’ union had filed an appeal against the order of the Adjudicating Authority, which had dismissed the claim for dues post-layoff, arguing that the Resolution Professional had only computed the salary until the layoff period, amounting to Rs. 185,62,360/-. The union contended that the salary should have been computed for the entire period, including the post-layoff phase.
The Insolvency and Bankruptcy Code (IBC) 2016 and provisions under the Industrial Disputes Act, particularly Sections 25(M) and 25(O), formed the crux of the dispute. The workers’ union argued that the layoff notice issued prior to the commencement of Corporate Insolvency Resolution Process (CIRP) was illegal, and as such, the Resolution Professional was obliged to calculate the dues based on the assumption that the workers were still entitled to their salary post-layoff. The Adjudicating Authority had ruled that the issue of whether the workers were entitled to claim their dues under the Industrial Disputes Act during the layoff period should be decided by the appropriate labour authorities and not within the CIRP proceedings.
