General Motors India has laid off all workers--1,419 of them--at its Talegaon plant, located in the outskirts of Pune by invoking Section 25 of the Industrial Dispute Act.

The employees union is likely to challenge General Motors' move in the court, according to sources quoted by Economic Times. 

The move is also likely to extend a legal battle between the employees and the automaker over the winding up of General Motor India's Talegaon plant, said the report.

The Indian subsidiary of the US carmaker emailed layoff notice to all the 1419 employees and the copy of the same was served to the secretary and the president of General Motors Employees Union.

A copy of the notice was displayed at the factory gate, the ET report stated adding that it will remain effective till further notice.

However, the company said the employees will be entitled to receive layoff compensation under Section 25-C of the Industrial Disputes Act 1947 which is 50 per cent of the basic wages and dearness allowance previous monthly take home.

The copy of the notice which was displayed at the factory gate stated, "Since the lay-off has been declared largely because of Covid-19, being a natural calamity, no prior permission from the appropriate authority has been sought, nor is the same necessary under section 25-M of the ID Act."

George Svigos, international director for communication, General Motors told ET that the company has continued to pay the employees though no vehicles were manufactured in the last four months.

"We have offered employees a separation package well in excess of the statutory requirement. Regrettably, the union has refused to negotiate the separation package, so the company has been compelled to explore all legal options available to the company to support the wind-down of operations at the site," he said.

The spokesperson claimed that the production at GM's Talegaon plant was ceased on December 24, 2020, the report stated.

He said the company gave employees and the union more than a year's prior notice regarding the end of production and there is no prospect of resuming production at the site.

The company has been incurring a monthly outgo of Rs 10 crore towards employee's salaries since December 2020 despite zero production at the plant, he stated.

"We continue to seek all relevant government approvals to support the wind-down of operations," the spokesperson said adding that GM India remains very confident of its legal position.

Sandeep Bhegade, president, General Motors Employees Union said to ETAuto, "The union will challenge the same with the relevant authorities. Our stand is we will continue to fight for our rights at various platforms.

The company has also informed the additional commissioner of Labour, Pune that GM India has been forced to lay off workmen due to rampant upsurge in Covid-19 pandemic, IBNS said.