Employment in a Multinational company has almost always been reputed to provide not only good terms generally, but MNC's are widely trusted for honouring their commitments, and for their fair ethical professional dealings with their management staff. After all, it is the managers, with their highly motivated teams, who make the organization successful.

However, during 2003 all past pensioners (including past directors and top executives), and the Officers and Managers of the highly successful market leader Britannia Industries Ltd (BIL) shockingly discovered to their great dismay a total reversal of these assured high standards of past values from their admired and beloved organization that they serve or served. Post March 2003, the Officers and Managers on verge of retirement were casually informed that pensions will be delayed due to "some rule changes". This was trustingly accepted. Alarm bells went off only next year when the due triennial pension adjustments for all past pensioners was also quietly stopped from April 2004 (this triennial pension enhancement for present and future pensioners was introduced as a part of service terms to celebrate Britannia's Platinum Jubilee in 1992 by the BIL Board, and intimated in writing to all. It was implemented in 1992, and continued in 1995, 1998 and 2001, establishing regular expected practice).

Despite several individual attempts to seek clarifications, no replies were given to any.

A Pensioners Welfare Association (PWA) was formed in late 2004 by suffering pensioners to take up these issues. Finally from a Trustee's letter received in Nov 2004 it dawned as a great shock that Britannia was actually intending to arbitrarily slash pensions retrospectively (which goes against Supreme Court judgments) and not to honour the stated terms & past commitments, and those not agreeing to the unspecified rule changes were likely to be denied their due pensions!

It came to light that this was at the explicit direction of Britannia's "Tough Cookie" Chairman Mr Nusli Wadia, who wanted the Defined Benefit rules changed to Defined Contribution type of pension scheme that would substantially reduce the necessary contribution requirements, since the pensions would get reduced. Whilst it is the prerogative right of any Management to make changes, what was proposed was to apply these curtailments retrospectively for the retiring employees from the start of their service, and not protect the accumulated benefits to date at the time of making these changes, as legally required. He replaced Fund Trustees in 2003 with Wadia group directors Mr Hirjee and Mr Kelkar, and brought Bombay Dying auditors CC Chokshi first as consultant, and then as Fund auditor by hastily replacing earlier auditors of decades. After these changes, over Rs 12 crores was illegally transferred back to Britannia by the Trustees in 2003-2004 smoothly cleared by the newly appointed consultant/auditor totally against specific Fund & IT Rules, and also stopping the entitled pensions to those retiring after Mar 2003, and the Platinum Jubilee triennial pension adjustments from 2004. Managers who dissented were quickly shown the door (almost all top executives, including the CEO were made to leave).

Trustees applied (on director's instructions) to the statutory authority eighteen months later in Nov 2004 (prior approval is required) for various rule changes applicable retrospectively for the entire service. Most changes went against the Trust Deed's objectives & Fund Rules, and are illegal as per several Supreme Court judgments. If proposed changes get implemented, in all instances the monthly pensions would be drastically reduced, some to as low as 11% of the entitled pension suddenly at the end of long and faithful service! These rule changes have not been approved, but Britannia is blatantly insisting upon following the proposed rules. The entitled pensions to about 60 retired Officers and Managers have not been released since five years, besides nearly 270 Senior Citizen pensioners (who had retired earlier - many being in their eighties) not getting their due & committed triennial adjustments from 2004 (averaging only approx Rs 700 pm), & also the next installment due from 2007.

It is well worth noting that whilst the Britannia's directors decided to illegally curtail the pension benefits from 2003 for all pensioners, their own (Directors) commissions increased drastically from aggregate Rs 5 million in 2002-03 to Rs 20 million in 2006-07, and the Dividend payout from 110% to 150% (increased to 180% in 2007-08)!

PWA's complaint to the Institute of Chartered Accountants of India held the new fund auditor being prima-facie guilty of misconduct. Their weak claim that the earlier additional contributions made went against IT Rule 87 limit, and was therefore refunded to Britannia, went against the mandatory Accounting Standard 15, and fundamental fact that Rule 87 limit is only for purposes of claiming tax deduction as per the IT Act. This has been confirmed by the Chief Commissioner of Income Tax, and validated by the show-cause notice to Britannia for withdrawal contrary to rules, and confirmed by the High Court Bench of Calcutta ordering depositing the amount in a FD with a Bank. This was done in Jan 2008.

The Commissioner of Income Tax in the meanwhile rejected the proposed Fund rule changes requested by the Trustees/BIL after a prolonged Hearing in June 2008, making old rules continue to remain valid.

The Pensioners Welfare Association finally approached the City Civil Court at Bangalore in June 2008 regarding the illegality of the Company and Trustees actions, including a plea to replace Trustees with court appointed neutral Trustees. After a number of Hearings, the Court gave interim orders, pending final decision:
(1) forbidding the defendants to alter any Fund Rules (in June 2008), and
(2) to immediately pay interim pensions from dates of retirement to the 70 PWA members whose pensions were withheld - from the accumulated contributions and interest admitted to be held by the Trustees to the Court, without diluting the pensioners right to the pension amounts claimed by them as per fund rules - pending the final decision on the pension computation method, and on all other issues raised by PWA by the court. (ordered on Jan 1st 2009).

No doubt that the Company and the Trustees will oppose them tooth and nail in every possible way. They will ensure the cases being dragged from Court to High Court, to the High Court Bench and finally to the Supreme Court, as they have threatened to do, but the legal struggle has now started - and only the judiciary can finally make them meet their obligations.

Britannia top brass have carefully chosen their weak and aged victims for their unjust & illegal decisions with impunity, knowingly that the justice system is not only expensive, but also operates at a snail's pace - several pensioners have already died waiting.

Thanks to Britannia's 2003 Directors lack of principles, years of established trust and credibility have taken a thorough merciless beating, along with their corporate ethical values, the legalities being only secondary. The current independent directors need to seriously review the policies and corporate values carefully with their personal morality standards.

This 2003 betrayal puts into shadow the case of similar treachery on promises made by a prominent political party recently resulting in their downfall.

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