14-year-old dispute between Britannia, pensioners, resolved

November 21, 2017 10:47

Former employees of Britannia Industries and the company have settled an over decade-long dispute pertaining to pension, paving the way for release of dues estimated to be in the region of Rs 40 crore, report Raghu Krishnan and Viveat Susan Pinto in Business Standard.

The pensioners, who were nearly 300 in number originally, had been fighting the biscuit major since March 2003 for their dues. 50 have died since.

These pensioners had formed a group called the BIL Pensioners Welfare Association, headed by Ashit Sarkar, a former senior vice-president (HR) at Britannia.

While the settlement was arrived at earlier, payments were delayed due to a pending matter in the Calcutta high court. This concerned Britannia and the Commissioner of Income-Tax, Kolkata, which had showcaused the firm pertaining to withdrawal of money from the pension fund. That issue has now been sorted, it is reliably learnt.

A mail sent to Britannia remained unanswered till the time of going to press, reports Business Standard. But the company's Managing Director Varun Berry is said to have taken interest in the matter, helping in its resolution.

According to the terms of the settlement, Britannia was to release outstanding pension accumulations with due interest for members of the association. Similarly, it agreed to pay the differential in pensions as an ex-gratia lump-sum to those people who were not members of the association.

Ex-employees had moved court because Britannia had converted the defined benefit pension scheme to defined contribution type with retrospective effect, which went against pension fund rules.

The pensioners had argued that the arbitrary change in pension rules by Britannia would have reduced the accumulated benefits during the entire service period to a fraction of the eligible pensions and would also take away the benefits available to the spouse and children of a deceased pensioner -- as had been provided in the fund rules.

The pensioners have now agreed to accept the trustees appointed by Britannia, withdraw cases against the firm or other members and not oppose the change of the pension fund rules from defined benefit to defined contribution from 2008-09.

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