Tribunal rules secondment does not alter employment contracts, dismisses application to admit claims in liquidation process
Mumbai, July 10, 2026 – The National Company Law Tribunal (NCLT), Mumbai Bench, has dismissed the application filed by Yogen Vaman Vemekar and 99 others seeking recognition as workmen under Jet Airways (India) Ltd.'s liquidation process. The applicants, originally employed by Jet Lite (India) Ltd., a subsidiary of Jet Airways, contended that their employment was seconded to Jet Airways, thereby entitling them to claims in its liquidation proceedings.
The tribunal, comprising Mr. Prabhat Kumar (Technical Member) and Mr. Sushil Mahadeorao Kochey (Judicial Member), heard arguments from both the applicants and the liquidator appointed for Jet Airways. The applicants argued that they were integrated into Jet Airways' workforce, working under its direct supervision and control since 2008, and that their employment should be considered under the liquidation waterfall as part of the unified Jet Airways group.
However, the NCLT ruled that secondment arrangements do not automatically transfer employment contracts between entities. The tribunal noted that the secondment letters and evidence presented demonstrated the continuation of the applicants' original employment with Jet Lite. Despite operational integration, no novation or transfer of employment contract was established, and the applicants remained on the payroll of Jet Lite, with statutory benefits accounted for by the subsidiary.
The tribunal emphasized that under the Insolvency and Bankruptcy Code, 2016, claims must be legally enforceable against the corporate debtor, and in this case, Jet Airways had no legal obligation towards the applicants. Furthermore, the applicants did not qualify as "workmen" under Section 2(s) of the Industrial Disputes Act, 1947 due to their roles and remuneration, thereby failing to meet the statutory definitions necessary for claim admission.
The decision aligns with precedents set by cases such as Centrica India Offshore Pvt. Ltd. v. CIT and Ernst And Young U.S. LLP, where secondment arrangements retained the employment relationship with the original employer. The tribunal also distinguished the case from Hussainbhai Calicut v. Alath Factory Thezhailali, Kozikode, and General Manager, U.P. Cooperative Bank v. Achchey Lal, noting that Jet Lite was not a contractor avoiding labor obligations but a subsidiary fulfilling statutory duties.
As a result, the tribunal dismissed the application, affirming the liquidator's stance that claims of subsidiary company employees cannot be admitted in the holding company’s liquidation process. This decision underscores the distinct legal identities of holding and subsidiary companies under Indian company law.
Bottom line:-
Insolvency and Bankruptcy Code, 2016 - Claims of employees of a subsidiary company cannot be admitted in the liquidation process of the holding company merely on the basis of secondment or operational integration.
Statutory provision(s): Insolvency and Bankruptcy Code, 2016 Section 53, Section 3(6), Section 3(36); Industrial Disputes Act, 1947 Section 2(s).
Yogen Vaman Vemekar v. Satish Kumar Gupta, (NCLT)(Mumbai Bench) : Law Finder Doc id # 2938095
