Critically examine the role of NCLAT in safeguarding employee interests in corporate insolvency cases, with suitable case examples.

The NCLAT, constituted under Section 410 of the Companies Act, 2013, is the appellate authority over NCLT orders in insolvency matters [2]. Through a purposive reading of the IBC, 2016, it has emerged as the main judicial shield for workmen's dues — yet its protection remains partial and slow.

Protective role

• Statutory trust upheld: Section 36(4)(a)(iii), IBC excludes provident, pension and gratuity fund dues from the liquidation estate [1]. In the Jet Airways liquidation (June 2026), NCLAT dismissed appeals by SBI and lenders, holding the exclusion is due-centric, not contingent on the debtor maintaining separate identifiable funds [2].
• Discipline over resolution plans: NCLAT (2022) directed the Jalan-Kalrock Consortium to pay full PF and gratuity, since a plan contravening the EPF Act, 1952 [4] and Payment of Gratuity Act, 1972 [5] violates Section 30(2)(e) [1].
• Settled precedent: the Supreme Court affirmed this position in 2023, reinforcing that welfare deductions were never the employer's money [3].
• Waterfall clarity: it has held workmen's dues for 24 months rank pari passu with secured creditors under Section 53 [1].

Limitations

• Relief is largely declaratory; actual payment depends on the liquidator and realisable assets.
• Delay dilutes remedy — Jet Airways staff, jobless since 2019, awaited finality till 2026 amid repeated appeals to NCLAT and the Supreme Court.
• Only PF, pension and gratuity are carved out; other employee claims remain operational-creditor dues, ranking low in the waterfall [1].
• Adjudication is case-by-case; NCLAT has no rule-making power, and tribunal vacancies and pendency slow disposal.

NCLAT has thus converted a statutory exclusion into an enforceable worker protection, without which employee savings would have been absorbed into creditor recovery. Sustaining this gain needs time-bound disposal, filling of tribunal vacancies, and a legislative clarification of employee dues in liquidation — aligning the insolvency framework with the Directive Principles' promise of a living wage and worker security.