Finally, Industrial Court has delivered its order. The Hon’ble Court has effectively held that the closure of Racold Factory at Chakan, Pune was not illegal. Consequently, the workers will not be reinstated with back wages.

Hold on, if you are thinking that I will proceed to discuss the intricacies of the law, and proceed to show how the order of the Industrial Court is not proper, let me assure you that it is not my intention. Read further please.

I have extensively covered the Racold Case in my three blog posts earlier. Here are the links and short notes for your quick reference.

“Unconscionable Is The Racold Closure”  (Dec 06, 2018) Racold effected factory closure, the details of which are recounted in this post as well as in the text which follows. To put it briefly, the closure was sudden and caught workers completely unaware. The workers realized that they had lost their jobs when they were shopping for Diwali festival.

“Calamities Come In Numbers For Racold Employees” (Jan 08, 2020) The Racold workers faced extreme hardship. Some found it difficult to finance education of children with children sulking, one who did not know how to meet expenses of his son who was a Thalassemia patient, one who had undergone kidney transplant and had medical expenses running into several thousand a month. Closure of a factory hit workers hard, because they were caught by surprise.

“Their Life After Retirement”  (Jan 20, 2025) Four Racold workers narrated how their families, including children reacted to the loss of income and fell in status, with a lot of suffering and pain hidden in their heart. They could not find jobs where their skill could be used, they took up jobs selling goods or running cabs for which they were unprepared. Elders suffered because there was no money to buy medicines.

Racold wanted to outsource manufacturing their products, so they decided to close the Chakan (which is near Pune) factory. Racold declared paid holiday under the pretext of ‘stock taking’ from Nov 1, 2018, till Nov 6, 2018. Nov 6 to 11 were Diwali holidays.

In a cunning and swift move they declared closure of the factory effective 31^st October 2018 and dispatched notices and statutory compensation cheques. (Statutory compensation is 15 days’ wages per completed year of service, and a month’s notice pay, which you will appreciate, is woefully inadequate). All the 97 workers realized that they had lost their jobs just before Diwali 2018!

This resulted in untold misery and hardship for the workers. I have captured it on the blog post ‘Their Life After Retirement.’ Their stories are really heart-wrenching.

It is against this background that the decision of the Industrial Court should be understood. And the result is – “The Hon’ble Court has effectively held that the closure of Racold Factory was not illegal and, therefore, the workers will not be reinstated with back wages.”

I am not writing to find fault with the decision of the Industrial court. Let us presume, for the sake of argument, that it is a valid decision.

The law has been followed, but the question on my mind is ‘Is justice done?’ Do you think that the ‘justice’ was done?

Some of us would say that if the legal stipulations were followed, it is not for the Court to consider whether or not the behaviour of the management showed virtues of compassion and responsibility. Such consideration, they would argue, was irrelevant because the letter of the law was followed.

Take the case of Asian Paints’ Bhandup factory. It was working smoothly, no dispute between the management and workers existed. In the night shift of one day in 1996, sudden fire engulfed the four-storey Paint house completely. It was destroyed, but it was not a case of sabotage. It made 160 workers redundant, because the manufacturing facility was lost in the fire. The company applied for retrenchment permission which was granted by the Authorities. The workers said, ‘it was not our fault, do not throw us on the streets with paltry compensation.’ The company decided, after a meeting with them, to give enhanced additional compensation which aggregated to Rs 5.10 Cr.

I tell this story only to compare and contrast the two somewhat similar situations.

We now see that strict compliance with the law does not display the virtues of compassion and responsibility. If Racold management says, ‘Well, we have complied with the law,’ can we insist that they ought to follow virtue of compassion? The answer will be ‘No!’ We have no authority to ask them to do it. Nobody can compel them to do it too.

The question of what is ‘justice’ keeps nagging me. Charles Sprading quote clarifies, “(we) confuse power with goodness, and mistake law for justice.”

I will now quote this paragraph from (one of the best books I have read) ‘Justice’ by Michael Sanders.

“Aristotle teaches that justice means giving people what they deserve. And in order to determine who deserves what, we have to determine what virtues are worthy of honour and reward. Aristotle maintains that we cannot figure out what a constitution is without first reflecting on the most desirable way of life. For him, law cannot be neutral on the question of the good life.

By contrast, modern political philosophers – from Immanuel Kant in the eighteenth century to John Rawls in the Twentieth century – argue that the principles of justice that define our rights should not rest on any particular conception of virtue, or the best way to live. Instead, a just society respects each person’s freedom to choose his or her own conception of good life.

So, you might say that ancient theories of justice start with virtue, while modern theories start with freedom.” (Unquote)

There is a fundamental disconnect between ‘legality and morality.’ Or ‘legality and fairness.’ There is a big gap between complying with the letter of the law and what the people accept as right and fair.

What in final analysis matters is how an organization resolves its conflicts. It can resolve conflicts by following the letter of the law. And it can also resolve them by following the law and organization’s virtues.

All organizations have a choice! In other words, all leaders have a choice!!

Vivek S Patwardhan

“What you leave behind is not what is engraved in stone monuments, but what is woven into the lives of others.” All matter copyrighted.

“तुम्ही जो वारसा मागे ठेवून जाता, तो म्हणजे दगडी स्मारकांवर कोरलेले शब्द नव्हे; तर तो वारसा म्हणजे इतरांनी आयुष्य विणताना विणले गेलेले तुमचे धागे होत.” सर्व मजकूर कॉपीराइट-संरक्षित आहे.