5,000 Gitanjali Gems Employees Worst Hit by PNB Scandal: A Look at Plight of Workers Whose Employer Goes on The Run

New Delhi, Feb 21: With owner Mehul Choksi on the run, nearly 5,000 employees of jewellery firm Gitanjali Gems were asked to accept their relieving letters. The handing over of pink slip was necessitated as the company's operations have virtually hit the rock bottom, after its prime promoter Choksi, along with nephew diamondarite Nirav Modi, emerged as the alleged kingpin of the scandal which defrauded the Punjab National Bank (PNB) of Rs 11,400 crore.

Earlier on Tuesday, workers at the Gitanjali Park in Hyderabad staged a demonstration against the company's owners, seeking government's intervention for securing them an alternative source of employment.

A Look at Plight of Workers Whose Employer Goes on The Run

In such circumstances, the company mostly inches towards becoming bankrupt. And unlike the companies which turn insolvent in a phased manner by settling all dues with its creditors - including the employees on the payroll, the firms whose promoters land on the wrong side of the law often end up depriving the workforce of their rightful due.

The meltdown in cases where the owner or promoter turns rogue, the ill-fated employees lose their pending wages, including the full and final settlement, gratuity amount and retirement benefits.

The plight came to the fore during the 2008 global financial crisis, when employees who had served for as long as 30 years for Lehman Brothers were asked to accept the relieving letter without the settlement of their final dues.

Over 25,000 employees of Lehman Brothers became unemployed after the investment major turned insolvent, with at least 12,500 among them failing to find a job for the next 18 months - till the recession's domino effect existed, US media reports claim.

In India, the Kingfisher Airlines serves as chilling reminder of how employees could face the brunt of the promoter's financial misadventures. Liquor baron Vijay Mallya, who was the owner of the airlines, ended up defaulting on a spree of loans taken from public and private lenders. As the consortium of banks tightened the noose around him, he terminated the payment of salaries to the near 3,000-strong Kingfisher staff.

The airline employees were, however, not asked to accept the relieving letter. Instead, they were given assurances of salary disposal at a later date. In this manner, the employees were duped to an extent where some of them worked for nearly 10 months without pay.

Not only the unpaid wages, the employees also lost lakhs of rupees which were accrued in form of gratuity. Overall, Mallya owes over Rs 300 crore to nearly 3,000 unpaid employees of the now-defunct airlines.

Despite Mallya being consistently targeted by the media frenzy over the past two years - since he fled to the UK - the plight of his unpaid former employees rarely make the headlines. While he is branded as "looter of taxpayers' money" - for duping the inefficient state-lenders - questions are sporadically raised on behalf of the employees whose aspiration of claiming their rightful due is diminishing with every passing day.

The cycle may repeat again in the case of Gitanjali Gems' workers. Apart from handling the shock of losing their job - which was safe until a work ago - a relentless campaign awaits the employees to claim their rightful due.

(The above story first appeared on LatestLY on Feb 21, 2018 01:49 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).