As 66 workers of Delhi Golf Club move court citing illegal dismissal, club outsources jobs

In May 2020, the Delhi Golf Club terminated the services of 66 employees. The employees have made several efforts to get their jobs back, including writing to several authorities about the illegalities of their dismissal and regularly holding protests outside the club. Utkarsh For The Caravan
15 August, 2020

On 13 August, around thirty five of 66 former employees of the Delhi Golf Club whose services had been terminated two months earlier protested outside the club’s premises demanding their reinstatement. The 66 employees worked at the food and beverages division of the posh club, located in central Delhi. Employees told me that many of them had worked at the club for 30–40 years but only got a three-day notice period. Since then, they have made several efforts—including writing to several authorities about the illegalities of their termination and regularly holding protests outside the club—to get their jobs back.

The club’s general committee had decided to shut the food and beverages division and dismiss its employees on 24 April, but the employees told me they were informed of this only on 28 May. The club cited the revenue losses caused by the novel coronavirus pandemic and the high salaries being paid to the employees as causes of the dismissal. “They didn’t give any indication that our contract will be terminated,” Intqab Ali, a senior waiter who was among the retrenched employees, told me. 

Though their contracts expired on 31 March, the employees told me that the club’s management negotiated the terms and conditions of their employment and renewed their contracts smoothly every three to five years. During the negotiations this year, the employees told me, they had offered to forgo benefits they received since 2014 in light of the financial losses. Moreover, Ram Pal, the president of the Delhi Golf Club Employees Union, told me the employees worked at the club till 31 May. 

Since the dismissal order, the Delhi Golf Club Employees Union has written to several authorities stating that the club’s retrenchment exercise saw several illegalities, including the brazen violation of multiple provisions of the Industrial Disputes Act, 1947, and the Disaster Management Act. Employees raised complaints with the central government, Delhi government’s labour commissioner and even filed two petitions in the Delhi High Court. RS Bedi, the president of the golf club, has denied the allegations and said that the food and beverages division is now being outsourced. During my conversations with them, the retrenched employees expressed a sense of betrayal and helplessness. “When I joined, 17 years back, my salary was Rs 650,” Jameel Hussian, a 53-years-old retrenched employee, said. “People who have Rs 8–10 lakh rupees are still working there. Why are they still there and we are thrown out?” 

The Delhi Golf Club is a historically elite club in the capital. It is located at the Zakir Hussain road on 179 acres of land that the central government had leased the club in the early 1950s. Even though the land’s worth exceeds fifty-five thousand crores, the club pays only a token license fee of Rs 16,620 per acre each month to the central government, according to one of the employees’ petitions in the high court. The ministry of urban development has nominated three of its officers as members of the club’s general committee. The club charges application and subscription fees. Apart from that, the entrance fee for applicants selected for membership ranges from Rs 3.5 lakh to Rs 15 lakh, plus applicable tax. 

The club is registered under Section 8 of the Companies Act, 2013—which means it is a company whose objective is it to promote commerce, art, science, sports, education, research, social welfare, religion, charity or protection of environment. The profits of Section 8 companies are only to be used for the purpose for which they are promoted. The club is registered under 12A of the Income Tax Act, 1961 which exempts it from paying income tax as well.

According to the company filings with the ministry of corporate affairs for the financial year ending on 31 March 2019, the 5,165-member club’s domestic turnover from sales or supply of services increased to around Rs 33.39 crore from Rs 29.64 crore in 2017–18. The club’s total revenue was Rs 4.5 crore and net worth totalled to about Rs 4.2 crore in 2018–2019. Last year, the club underwent a multi-crore redesigning, which cost nine crores, according to a November 2019 report by The Hindu.  

However, the club also reported a loss of Rs 10.4 crore in 2018–2019. According to Bedi, the club’s losses had been piling up for five years and now, it was not getting any revenue due to the outbreak of the novel coronavirus. He said he had told the staff that they would have to revise their wage agreement and hold negotiations. “Just the outgoing in terms of pay of the food and beverages section are in the region of 5.5 to 6 crores rupees a year, and then there are losses,” he said. “I pleaded with them—‘If this does not work out, we will have to close this section down.’” The employees, however, denied that they received any such warning from the management. 

Bedi confirmed that the general committee took the decision to shut the food and beverages division on 24 April but did not issue the termination order for a month. “Just to keep the doors open, we did not execute it,” he said. “We said maybe this would trigger off some sense of urgency with the staff, they would come around and try and get to some meeting point, which does not lead to a closure.” The next meeting of the general committee was held on 25 May, Bedi said, during which it reiterated its decision to shut the food and beverages division due to lack of flexibility of part of the employees. 

But two letters that the employees sent to the management in May, annexed in one of the petitions, show otherwise—taking note of the club’s crises, they offered to give up some benefits they received from the club. In a letter dated 13 May, addressed to the club’s chairman Sanjiv Talwar, the employees wrote that their house-rent allowance could be brought down from 20 percent to 15 percent of the basic salary for five years. They said that their gross salary—which was last fixed in 2014—can remain the same till 2025. 

The other letter, dated 25 May, was addressed to Anil Kumar Rattan, the chief executive of the club, in reference to a meeting the employees had with Bedi and Rohit Sabherwal, the captain of the club. The letter listed more benefits that the employees were willing to let go of—such as leave-travel concession, Holi bonus, leave encashment—and further said that their medical allowance can be deducted for five years. The employees, however, requested that a five-percent yearly increment be given to the staff whose salary is low. 

The employees were willing to negotiate pay cuts to retain their jobs, Ravi Pandey, one of the retrenched employees, told me. But, he added, “They were not willing to talk to us and just had the intention of firing us.”

On 28 May, the employees found out that they were dismissed. Some told me that they did not even receive an order stating that their services were being terminated and the retrenchment amount was simply transferred to their accounts. Among them was Ali, who said he had been working at the club for nineteen years and was even appointed as a permanent employee of the club in 2007. “I finished my duty and came home,” he said, referring to the events of 28 May. “That’s when I received a notification on my phone saying that some amount has been deposited into my bank account by the club. Within two days, they removed us from all responsibilities and did not let us enter the club after that.” 

Ali told me that the management did not discuss the retrenchment compensation with the employees. “None of us have any idea how they have calculated the amount they have deposited in our accounts,” he said. “We have all reported to work regularly and fulfilled all our responsibilities,” Ali said. “This is done without any reason.” 

Dismissing employees with a three-day notice period was among the several legal discrepancies that the employees’ union pointed out in its petitions to the high court. The issue of termination of employees comes under the purview of Section 25 of the Industries Disputes Act, 1947. The employees’ union wrote in one of their petitions that the club had violated Section 25N of the Industries Disputes Act, 1947, which states that the workmen cannot be retrenched till they have been given three months of notice in writing indicating the reasons for retrenchment.

The club failed to take requisite permission from the government before shutting down the food and beverages division, Sunita Bharadwaj, the lawyer representing the employees’ union, said. According to Section 25FFA of the act, an employer who intends to close down an undertaking has to serve a notice to the appropriate government authority stating the reasons for the same at least 60 days before the closure is scheduled to become effective. “They didn’t give this time,” Bharadwaj told me. The club only sent a letter to PK Gupta, the labour secretary-cum-commissioner, for permission to shut its food and beverages department and retrench employees on 26 May, just five days before dismissing the employees, according to the petition. “You can’t throw out permanent employees this way,” Bharadwaj said. “The legal position is that if you haven’t got permission for retrenchment from the government, the employees can continue in duty.” 

The employees’ union filed several complaints regarding its ordeal to the offices of the joint labour commissioner as well. The VK Rao, the conciliation officer at the office’s South Delhi district division, held a conciliation hearing regarding the same on 23 June. Rao noted that the club had been sent some queries which it had failed to respond to. These queries included one on whether the retrenched employees would be reemployed as per sections 25H and 25P of the Industrial Disputes Act if the food and beverages department were to reopen. Section 25H of the act states that after the retrenchment exercise, if “the employer proposes to take into his employ any persons … retrenched workman who offer themselves for re-employment shall have preference over other persons.” Rao asked the respondents to appear in person to answer these queries. 

But the club’s representatives failed to appear before the labour officer for the next two hearings, held on 25 June and 2 July. Rao sent another notice to the club, saying that in case the employer does not appear for the hearing, it will be considered that the club has accepted the charges levelled against it. The employees mentioned in their petition that Gurmukh Singh, the joint labour commissioner of New Delhi district, got the complaint transferred from South Delhi to New Delhi district and allowed the employer to not appear in person. It alleged that Singh “illegally tried to convert the prosecution proceedings into conciliation proceedings acting hand-in-glove & in conspiracy with the employer.” 

In one of the petitions that the employees had filed to the Delhi High Court, they pointed out the Delhi government’s failure in prosecuting the club for violation of various provisions of labour laws. It wrote that the Delhi government’s authorities—Gupta, Gurmukh Singh, the special labour commissioner KS Meena and the additional labour commissioner Rajender Dhar—had failed to send the unions’ complaint to the metropolitan magistrate as is the requisite procedure under the Industrial Disputes Act. The employees’ union said that the office of the joint labour commissioner of South Delhi district had forwarded the complaint to the state disaster management authority, who had also not taken any action. 

According to the employees’ union, the high-profile club disregarded several advisories issued by the central government in light of the pandemic. This included the ministry of labour and employment’s 20 March guideline, asking public and private establishments to not terminate contractually hired employees or deduct their wages on account of their absence. In a letter dated 1 June to the ministry of home affairs, the employees’ union wrote that the club—which has nominee directors from the ministry of urban affairs—had refused to pay salaries of a large number of employees for April and May. It pointed out in the letter that the central government had invoked provisions of the Disaster Management Act during the nationwide lockdown to contain the spread of the novel coronavirus to prohibit the deduction of salaries and termination of services. 

It raised two more allegations in its petitions. In another complaint to Rao, the employees’ union alleged that the club did not have a license to make and process food for sales, which is mandatory for an employer with twenty or more workers according to the Factories Act, 1948. Further, the employees’ union told the court that they had not been given their Employee Provident Fund component since July 2017. The club denied defaulting on payments and told the court that the EPF component was not reflected in the employees’ account because of a “technical glitch in the system of the EPFO.” Rahul Mehra, the central provident fund commissioner of the EPFO, told the court that if the club is found to be guilty then necessary proceedings would be instituted against it. 

Bedi denied these charges too. He said that the club followed all procedures under the Delhi Shops and Establishments Act, 1954, to pay the employees. “In lieu of the one month’s notice, according to the act, we gave them an additional month’s pay,” he said, before claiming that they had paid around a total of 11 crores to the employees. “We paid them full pay for the month of April and May. We have not transgressed any law.” Bharadwaj contested this. “The plea of Delhi Shops and Establishment Act is of no avail,” she said. “The said act cannot rule out the applicability and requirements of Industrial Disputes Act, 1947, Factories Act, 1948 or Contract Labour (Regulation & Abolition Act, 1970).”
The employee’s union raised its complaints with several authorities, including the union home ministry; Anil Baijal, the lieutenant governor of Delhi; and the Delhi government’s labour department. I sent emails to Amit Kataria, D Thara and Durgashankar Mishra, government nominees in the general committee—from the ministry of urban development—regarding the allegations against the club. This story will be updated if and when they reply. 

The petitions filed by the employees’ union also provided several rebuttals for the management’s justification that the employees had to be sacked as the food and beverages division had to be shut. The annexed documents contain a tender notice that the club issued in a newspaper inviting “expression of interest” for “running composite food and beverage services for all locations of the Club” by 10 June. 

According to the petition, the management has since signed an agreement with VKS Services, a firm which provides housekeeping, cafeteria and canteen management services, to open a food counter inside the club. Pal and Bharadwaj told me that the club has entered into a contract with Lite Bite Foods for running its food and beverages services. Moreover, several employees said that Lite Bite has approached them to work through it at the club.

When asked about getting new contractors on board, Bedi said the move is “well within the law.” He said that the division was being outsourced to become a “profit-making thing rather than a loss-making establishment.” Bedi said the club was not paying anyone for this. “Someone is running it for us and he will give us a certain part of the commission,” he said. “We will be making money, and we have zero liability.” But Bharadwaj alleged that the club does not have a valid license to engage either VKS or Lite Bite as a contractor at the food and beverages division. 

In its interactions with the employees, the management often said that the high wages drawn by the division’s employees had made it unsustainable to renew their contracts. Bedi reiterated this to me. “Unfortunately, the club entered into a certain wage agreement in 2014 which has led to all these problems we are facing today,” he said. According to him, the 2014 wage agreement resulted in a financial crisis which caused their dismissal. “I think there was a lack of application on part of the then management.” But the employees pointed out that the management needs to take responsibility for its failures.

Rattan, the chief executive of the club, wrote a letter to Ali on 28 May referring to the retrenchment. In it, he said that the club was paying some of the employees about Rs 60,000 to Rs 1,00,000 per month. The continuation of the department was not viable as “at the current cost trends the cost will be (approx.) Rs. 17.40 crore against a revenue receipt of Rs 12.12 crore from our F&B services at the Club.” Though some of the employees who have worked at the club for decades have higher wages, Ali—a senior waiter who received all the wage hikes since 2007—said the club paid him only around Rs 31,000 per month. 

“The food and beverages department is run by the management,” Ali told me. “All the policies and day-to-day functioning are decided by the management. We only cook and serve food. If they say the club is running at a loss, why are we punished for that? We did not take those decisions.”

According to the petition, KS Johar—the chairman of the food and beverages division and a member of the club’s general committee—also suggested that the retrenchment was caused by the management’s failures. In an email annexed in the petition, Johar wrote that two appointments were made to senior positions in the food and beverages department without consulting other members. “Their work had nothing to do with F &B which hence became a burden on the members to the tune of Rs 50 lakhs,” he wrote. 

Further, according to the annexed document, Johar wrote that he had not been informed of plans to shut the division. During the 24 April general committee meeting—in which it decided to shut the division—outsourcing the food and beverages division was discussed without listing it on the agenda and giving him prior notice, Johar wrote. According to the annexed document, he wrote that when the draft minutes came, he saw the decision to shut the division and retrench its employees and registered his dissent. He mentioned that he was resigning from his post. Bedi denied this and said that a majority had agreed to shut the division in the meeting. He further said that Johar had agreed to the decision taken by the committee. 

The employees’ union continuously expressed their disbelief over the claim that the club had no way to keep them hired. According to one of its petitions before the Delhi High Court, shareholders and members of the club have created a fund of Rs 66 crore “for meeting any contingency against the salary/other benefits to the employees of the said club.” Commenting on last year’s multi-crore redesigning, Pandey said, “How are they spending so much if the club is running at loss?”

According to the employees’ union, the heavily subsidised rates of food served at the club is resulting in losses. “It is as good as giving for free,” Ali told me. “We have been maintaining all hygiene standards and experienced cooks are making it, but charging less than a dhaba. Why don’t they fix prices at the market rate and see if there is still loss?” Ali said that the club charges chai and samosas at around Rs 10 each. “A thali costs Rs 1,400 a plate, but when the captains hold party it is given at half the rate,” he said. This discount is then shown as the loss of the food and beverages department, according to the retrenched employees. In April 2019, the club charged members, spouses and senior dependents Rs 550 for the Captain’s Day—a gala dinner—including for dinner, and Rs 10 for each drink. 

Bedi denied the existence of any such contingency fund worth Rs 66 crores. In response to a question about pricing, he suggested that the members cannot be asked to pay more just to give high salaries to the employees. “It is not subsidised,” he said. “We have to take into account the wages. When the wages are so high, you can’t keep increasing the price of food for your members. The cost cannot go up by 2.5 times, so it has to be affordable to the members also. The losses will occur because of the salary.”

Most of the retrenched employees hail from Uttarakhand and Himachal Pradesh and stay on rent, Ali and Pandey told me. “I have two daughters in tenth and eleventh standards now,” Ali told me. Almost all of the retrenched employees, he added, are single earning members of the family. “Most of us have families back home who depend on the income we send them.” Pandey said that the club has “thrown out all our families onto the streets.”

None of the retrenched employees have been able to find new jobs, Pal, the president of the union, told me. Pal, who worked as a barman at the club, said he worked there for 29 years before his sudden dismissal. “It looks like there won’t be new jobs in the hotel industry for at least this year,” Pal said. “I am 49 years old. Who will give me a job at this age now?”