Tuesday, December 5, 2023

Did Tata Motors actually shut door to Marc Llistosella?


Marc Llistosella, who would have become the fourth expatriate to lead Tata Motors didn’t be a part of the Indian auto major. The latest report suggests that Tata Motors withdrew the offer of appointing him as the new CEO of the brand.

In late March 2021, it was widely reported by the Indian media that Tata Motors has started hunting for a new CEO, as it claimed that German national Marc Llistosella won’t join the automaker, whom the automaker had appointed to lead the company. However, as it appears, the decision to not join Tata Motors was not by Marc Llistosella, but the automaker itself withdrew the offer before he could take charge. Also, for this withdrawal of the offer, the automaker has paid compensation to Llistosella.

Tata Motors announced on February 12, 2021; that it had appointed Marc Llistosella as its Chief Executive Officer in place of Guenter Butschek who didn’t agree to extend the contract with the automaker due to his personal reasons. Guenter Butschek’s term as the MD and CEO of Tata Motors ends on June 31, 2021. If Llistosella would have taken the helm of Tata Motors, he would have become the fourth expatriate to lead the company.

Marc Llistosella has extensive experience in the automobile industry in leading business and running sales, marketing, and network management as well as strategic planning. He has been the President and CEO of Fuso Truck and Bus Corporation and Head of Daimler Trucks in Asia. He played a key role in making the DICV a major CV player in the Indian commercial vehicle industry during his tenure with the company in India.

According to the employment terms, Llistosella was to join Tata Group’s flagship company on June 1, 2021. He had attended a couple of virtual meetings to understand the automaker’s domestic business in the intervening period. However, just a month later it was learned that Listosella will not be formally joining the Mumbai-based automobile giant. At that time, Tata Motors didn’t give any reason for the change in decision.

While the compensation paid to Llistosella by Tata Motors could not be ascertained, in such cases, it is usually equivalent to the compensation an applicant would have earned during his contractual notice period. In such scenarios, these cases are mostly settled amicably between the two parties – the employer and the candidate.

The automaker had to pay the compensation to Llistosella as once a job offer has been made and accepted, a binding contract remains between the two parties, even if the applicant has not joined his new employer. In such cases, if the employer withdraws the offer, it could amount to a breach of contract resulting in paying damage to the candidate. The same rule applies otherwise as well. This means, if Llistosella had withdrawn from the offer, Tata Motors could have claimed compensation from him for breach of contract.

Also, the employment contracts, especially involving the C-suite expatriates, include a clause on liquidated damages. Expatriate recruitments from countries such as the UK and any other member countries of the European Union are protected by the labour laws of the region. The liquidated damages form a part of the employment contracts in EU countries. However, India has no such protective labour laws so far.

Also Read: Key leadership changes in the auto industry in March 2021

Team AFT
Team AFThttps://autofintechs.com
The jack of all trades behind the Autofintechs.com


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