Can an Employee file a case under IBC, 2016 against its employer - Company ?

 Can an Employee file a case under IBC, 2016 against its employer - Company ?

IBC, 2016 is meant "to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximisation of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the order of priority of payment of Government dues and to establish an Insolvency and Bankruptcy Board of India, and for matters connected therewith or incidental thereto."

Sec. 4 (1) of IBC, 2016 says that Part 1 of IBC, 2016 shall apply to matters relating to the insolvency and liquidation of corporate debtors where the minimum amount of the default is one crore rupees.

Sec. 3 (36) of IBC, 2016 says that “workman” shall have the same meaning as assigned to it in clause (s) of section 2 of the Industrial Disputes Act, 1947.

In one of the case an employee has filed a case under IBC to initiate insolvency against the employer - Company.

However, employee has not disclosed anywhere as to how much he is entitled to claim arrears for the years 2016, 2017, 2018 and 2019 and about leave encashment, variable pay, leave travel allowance and other reimbursements.  Therefore, the application was found incomplete. [Refer K.G. Rajasekaran v Alectrona Energy Pvt Ltd [2019] GCtR 3139 (NCLAT)]

This is clear that there is no prohibition being pointed out in this case that employee cannot initiate insolvency proceedings against employer-Company for its dues.

Written by 

Vishal

Delhi

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