IL&FS Ethiopia staff move NCLT to recover salary dues

Nandana James Mumbai | Updated on September 18, 2020

44 employees working for ITNL-Elsamex S.A have not been paid salaries since August 2018   -  FRANCIS MASCARENHAS

Employees of Infrastructure Leasing & Financial Services Ltd’s (IL&FS) subsidiary in Ethiopia are planning to move the National Company Law Tribunal (NCLT) in a bid to recover their salary dues. About 44 employees working for ITNL-Elsamex SA have not been paid salaries since August 2018.

This comes after the cash-strapped company asked the employees to sign a declaration dated April 2 stating that the company will consider giving an ex-gratia payment on humanitarian grounds.

In return, the employees were told to give an undertaking that they would not claim any other amount from the company. All 44 employees signed the declaration after which the company released salaries for the period up to August 2018. But now the employees say that they signed on the document under duress.

“We were forced to sign and we can prove it. ITNL is the ultimate owner of the Ethiopian JV. They just can’t deny the responsibility by getting a piece of paper signed by us,” one of the employees at the Nekemte project in Addis Ababa told BusinessLine.

‘Illegal declaration’

Terming the agreement as an “illegal declaration”, he said: “The company gave us an impression that we will get paid our part-salaries only if we sign it — otherwise we wouldn’t have signed it.”

Salaries of the 44 employees have been pending for May, April, June and July 2018, with most of them waiting since July. Some of them were also held hostages by the local staff of the joint venture.

The employees had also sent protest letters to ITNL. In one such letter an employee stated the following about the part-payment he received on April 11: “I state that, as I was under tremendous economic burden due to the non-payment of my salary dues for 12 months, I had no alternative than to accept the part payment.”

About 35 employees are willing to file the case with the NCLT, one of them said. He is sure the remaining people will also join.

IL&FS has already received the Form-3 demand notice from most of the employees, from April 24 onwards, he said. The demand notice is a legal format in NCLT proceedings against corporate debtors, which asks them legally to pay or give a good reason for not paying. The case can be launched 10 days from sending such demand notices.

When contacted an IL&FS spokesperson said: “ITNL-Elsamex, the Ethiopian JV company, has acknowledged to these employees that their salary, and other employment related claims, will be paid to them as and when the joint venture has money to pay them. ITNL has paid an ex-gratia to them, purely on humanitarian grounds, and the declaration is sought is to ensure that by virtue of this payment, these JV employees do not make any further claims, with respect to employment, salaries or relationship with ITNL, in future. The declaration has been given by the employees.”

Published on April 29, 2019

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