Philips India - Labor Problems at Salt Lake

The unions approached the company with an offer of Rs 100 million in an attempt to outbid Videocon. They claimed that they could pay the amount from their provident funds, cooperative savings and personal savings. But PIL rejected this offer claiming that it was legally bound to sell to Videocon and if the offer fell through, then the union’s offer would be considered along with other interested parties. PIL said that it would not let the workers use the Philips brand and that the workers could not sell the CTVs without it. Moreover the workers were taking a great risk by using their savings to buy out the plant. Countering this, the workers said that they did not trust Videocon to be a good employer and that it might not be able to pay their wages. They followed it up with proofs of Videocon's failure to make payments in time during the course of its transactions with Philips. In view of the rejection of its offer by the management, the union stated in its letter that one of its objection to the sale was that the objects clause in the memorandum of association of Kitchen Appliances did not contain any reference to production of CTVs. This makes it incompetent to enter into the deal. The union also pointed out that the deal which was signed by Ramachandran should have been signed by at least two responsible officials of the company.