SC asks Parke Davis to pay retirement benefits

NEW DELHI: In a relief to former employees of pharma company Parke Davis (India) Ltd, the Supreme Court has upheld a labour court's order directing the company to pay retirement benefits to the staff as per an initial settlement.

A bench headed by Justice A K Mathur, while disposing of the company's petition, asked the company to deposit the money and approach the Bombay High Court for changing its order.

Parke Davis (India) Ltd, a company formed after Parke Davis merged with Pfizer Ltd, had challenged the High Court order refusing to interfere with the labour court's decision, on the ground that "the matter pertained to survival of retired employees".

A Maharashtra industrial court had held Parke Davis liable for unfair labour practices and had asked the company to desist from such practices. It had also directed the company to implement the superannuation scheme and pay gratuity to employees without reducing the pension corpus.

The company, which had introduced a superannuation scheme and a group insurance scheme administered through LIC in 1995, had submitted that it should not be saddled with liabilities arising from a mistake by LIC in calculating pension.

According to Parke Davis, it had informed its employees, who had opted for voluntary retirement scheme, about the reduction in the retirement benefits after LIC had intimated the same in September 1999.

Stating that it was not liable to pay additional benefits on the basis of wrong calculations, Parke Davis argued that these workmen had ceased to be its employees after taking voluntary retirement.

"The High Court failed to appreciate that employees have already acted and accepted the settlement and could not now seek additional benefits on the basis of wrong calculations," the petition stated.