Skip to content


K. Komaraiah Vs. Industrial Tribunal-cum-additional Labour Court, Hyderabad and Another - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtAndhra Pradesh High Court
Decided On
Case NumberWP No. 6325 of 2000 and Batch
Judge
Reported in2000(5)ALD298; 2000(4)ALT441; [2000(87)FLR357]
Acts Industrial Disputes Act, 1947 - Sections 2-A, 11-A, 18(1) and 25-FFF & O, 25(H)(2); Industrial Disputes (Amendment) Act, 1982; Motor Transport Workers Act, 1961; Air Force Act, 1950; Army Act, 1950; Navy Act, 1957
AppellantK. Komaraiah
Respondentindustrial Tribunal-cum-additional Labour Court, Hyderabad and Another
Appellant AdvocateMr. G. Vidya Sagar and;Mrs. K. Udayasree, Advs.
Respondent AdvocateGovernment Pleader for Labour and Mr. V. Srinivas, Adv.
Excerpt:
(i) labour and industrial - voluntary retirement - sections 25-fff, 25-h (2) and 25-o of industrial disputes act, 1947 - 196 workmen out of 226 opted for voluntary retirement scheme at time of closure of industry of respondent - after two year respondent restarted their manufacturing activity and took 151 workmen back including 69 workmen who did not opt for scheme - 85 permanent workmen who opted for scheme and were left out raised industrial dispute - voluntarily retiring workmen taking benefits of voluntary retirement scheme continuing on factory roll on date of closure ? workmen said to be retired workmen and cannot get re-employment benefit - held, such workmen are not retrenched workmen according to section 25-h (2). (ii) deemed retrenchment - sections 25-fff and 25-o of industrial.....order1. all these writ petitions can conveniently be disposed of by a common order as common questions of facts and law arise for consideration.2. the additional industrial tribunal, hyderabad (hereinafter called 'the tribunal') by a common award dated 30-6-1999 in id no.1 of 1999 and batch dismissed 45 industrial dispute cases filed by some permanent employees of the 2nd respondent-company. the present writ petitions, except writ petition no.7514 of 2000, arising out of id nos.l, 82, 81, 77, 137, 103, 4, 80, 79, 78, 76, 75, 5, 10, 89, 87, 100, 6, 92, 88, 8, 11, 102, and 85 of 1999 respectively are filed by some of the workmen questioning the common award of the tribunal rejecting their claim for reinstatement into the 2nd respondent-company consequent on revival of the manufacturing.....
Judgment:
ORDER

1. All these writ petitions can conveniently be disposed of by a common order as common questions of facts and law arise for consideration.

2. The Additional Industrial Tribunal, Hyderabad (hereinafter called 'the Tribunal') by a common award dated 30-6-1999 in ID No.1 of 1999 and Batch dismissed 45 Industrial Dispute cases filed by some permanent employees of the 2nd respondent-Company. The present writ petitions, except Writ Petition No.7514 of 2000, arising out of ID Nos.l, 82, 81, 77, 137, 103, 4, 80, 79, 78, 76, 75, 5, 10, 89, 87, 100, 6, 92, 88, 8, 11, 102, and 85 of 1999 respectively are filed by some of the workmen questioning the common award of the Tribunal rejecting their claim for reinstatement into the 2nd respondent-company consequent on revival of the manufacturing activity in their establishment. Writ Petition No.7514 of 2000 arising out of a similar dispute in ID No.46 of 1999 is also directed against a similar award dated 30-6-1999 passed by the Tribunal separately. The facts are not in dispute. Briefly stated they are as under:

The 2nd respondent is a Company engaged in the manufacture of Indian made foreign liquor. The State of Andhra Pradesh by legislative enactment imposed prohibition in the State with effect from 1-1-1995. The Government directed the 2nd respondent to close down its manufacturing activity. The 2nd respondent sought permission of the Government of Andhra Pradesh under Seclion 25O of the Industrial Disputes Act, 1947 (for short 'the Act') seeking permission to close down the unit, as the manufacturing of liquor cannot be carried on. Initially permission was rejected, but later, the Government reviewed their decision and issued G.O. Rt. No.2192 dated23-9-1995 directing the 2nd respondent to close down their establishment after observing all the pre-requisites required therefor. Accordingly, the unit was closed. In view of the long service put up by the employees/workmen, the 2nd respondent mutually discussed with the workers union and brought into existence Voluntary Retirement Scheme-1995 (hereinafter called as 'VRS' ). The representatives of the workmen and the representatives of the management signed the scheme on 22-10-1995. The VRS was given effect to. It is in the evidence led before the Tribunal that as on the date of closure of the establishment of 2nd respondent, there were 266 workmen including 70 casual workmen. Out of the total work force, 196 workmen opted for VRS, which includes 167 permanent employees and 29 casual workers. The remaining 70 workers did not opt for VRS. It is not disputed that all those who opted for voluntary retirement were paid the compensation and other amounts under VRS as per Paragraph (c) of VRS. It is also necessary to mention that the workmen filed applications for payment of VRS amount under the scheme which, inter alia, states that the workmen are taking all the benefits under the VRS and shall have no right or claim for re-employment or for employment in the company and that the workmen shall have no other claim or right in the company monetarily or otherwise.

3. The policy to impose prohibition in the State of A.P. was, however, reversed in 1997. The State partially lifted prohibition. This enabled the 2nd respondent to re-slart their manufacturing activity in their establishment. Accordingly, in July 1997, the 2nd respondent started its operations. In connection with the reopening of the establishment, the 2nd respondent entered into settlement under sub-section (1) of Section 18 of the Act benefiting only those employees who were on its permanent roll and accordingly such employees were reengaged by the 2nd respondent after reopening of the unit. The settlement-dated 9-7-1997 speaks of reationalisation of manpower requirements to achieve the optimum productivity and best utilisation of the new technically advanced automated bottling hall. In furtherance thereof, the manpower requirements were arrived at as -117 workmen in Bottling Operations and 63 workmen in the category of common jobs. Accordingly, the 2nd respondent took the required number of workers back. As per the, evidence on record, 82 out of 167 workmen who took voluntary retirement were also taken back along with 69 workmen who did not opt for voluntary retirement. 85 permanent workmen were left out and they were not taken to the service.

4. Some of the workers filed Writ Petition No.24959 of 1998 before this Court quesfioning the action of the 2nd respondent in excluding 85 retired employees for the purpose of reemployment. The Writ Petition was disposed of giving liberty to the workmen to raise industrial disputes under Section 2-A(2) of the Act. Accordingly, 45 workmen raised industrial disputes as noticed above. In separate claim statements filed before the Tribunal, all the workmen relied on 25-H of the Act. They also relied on the settlement between the management and the workmen especially Clauses 27 and 28 thereof. They allege that while affording an opportunity to the former workmen of the 2nd respondent for re-employment, no procedure was followed and the same violates the provisions of Section 25H of the Act.

5. The 2nd respondent in their counter before the Tribunal stated that the VRS gave an option to all the workmen to take voluntary retirement, that there was no compulsion for the workmen to opt for VRS, that all the employees except 70 persons opted for voluntary retirement by applyingin the prescribed proforma and that all the applications of the workers were accepted by the management duly paying huge amounts under the scheme in addition to gratuity and leave encashment benefits. It was also contended that all those employees who did not opt for VRS were retrenched after paying the compensation as per the provisions of the Act. After reopening of the establishment, the 2nd respondent was under an obligation to consider those employees who were retrenched and who did not opt for VRS and accordingly they were taken back. In view of the changed production norms and sophisticated high speed automated manufacturing line, the management of the 2nd respondent agreed with the Union to appoint 65 persons who are working on temporary basis prior to the closure of the Unit and also some more persons who had opted for voluntary retirement. The Management alsg raised an objection that an industrial dispute under Section 2-A(2) is not maintainable.

6. The Tribunal examined WW1 for Workmen and MWt for Management. Exs.M1 to M7 were marked on behalf of the Management and no documents were marked for the workmen. In all the ID cases common evidence was recorded and a common award was passed. The Tribunal relied on the judgment of the Supreme Court in Ghatge and Patil Concerns 'Employees' Union v, Ghatge and- Patil (Transports) Private Ltd., 1968 (1) LLJ 566 and held that the workmen who had opted for voluntarily retirement have no right to seek for re-employment under Section 25H of the Act. Accordingly, an award was passed dismissing the ID cases.

7. Sri G. Vidyasagar, learned Counselappearing for the petitioners relies on subsection (2) of Section 25H of the Act and submits that whether or not a workman has opted for voluntary retirement in a situation where a closed unit is re-opened, all the workmen on the rolls of the unit immediately before its closure shall have to be given an opportunity to offer themselves for re-employment. As admittedly all the petitioners were on the rolls of the 2nd respondent as on 1-1-1995 and 23-9-1995 when the Government ordered closure of the unit, the cases of the petitioners should have also been taken into consideration for re-employment. Elaborating further, the learned Counsel submits that the 2nd respondent re-employed substantial number of workmen who in fact also opted for voluntary retirement and were similarly situated as that of the petitioners. According to the learned Counsel, the purport of sub-section (2) of Section 25H which has been brought on to the statute book by an amendment by the A.P. State Legislature should be given its full play ignoring the subsequent event of the workmen opting for voluntary retirement. The crucial fact, which requires to be taken into consideration, according to the learned Counsel, is whether the workman is on the roll of the unit immediately before its closure or not. As all the workmen were admittedly on the rolls of the 2nd respondent till they received the payment under VRS they cannot be denied the benefit under sub-section (2) of Section 25H of the Act. In support of his submissions, Sri Vidyasagar relied on the judgment of the Supreme Court in Hari Prasad v. A.D. Divelkar, AIR 1957 SC 121 and the decisions of the Allahabad High Court in Sri Krishna v. Prescribed Authority, Kanpur and others, 1995 (1) LLJ 1060 and in Saroop V.P. Industries Ltd. v. State of U.P., 1987 LAB IC 1286.

8. Sri V. Srinivas, learned Counsel for the Management opposed the writ petitions. The sum and substance of the submissions of the learned Counsel is asfollows:

9. Sub-section (2) of Section 25H of the Act cannot be read in isolation. Whensub-section (1) of Section 25H comes into play definitely in case retrenchment, subsection (2) of Section 25H should also be construed in a reasonable manner so as (o give benefit to the workmen who suffered retrenchment after the unit has been closed down. When a unit is closed down under Section 25O, it amounts to retrenching the employees who are on the roll of the unit as on the date of closure of the unit and the word 'retrenchment' as defined under Section 2(oo) specifically excludes a workman who retired from the establishment and hence workman who voluntarily retired are not entitled to claim relief under Section 25H(2) even if they are on the rolls as on the date of closure. In support of this, the learned Counsel also relies on Section 25FFF and sub-section (8) of Section 25O as well as the words in the statute like 'industrial dispute, 'workman' and 'retrenchment'. The learned Counsel has placed reliance on the judgments of the Supreme Court in Ghatge and Patil's case (supra ), M/s J.K. Cotton Spinning and Weaving Mills Co. Ltd v. Stale of U.P., 1990 LAB IC 1511, Ankapalle Co-operative Agricultural and Industrial Society Ltd. v. Workmen, : (1962)IILLJ621SC , D.S. Vasavada v. P.F. Commissioner, Ahmedabad, 1985 (1) LLJ 263, Imambhai v. R.P.F. Commissioner, Ahmedabad, 1982 (2) LLJ 1036 and the judgment of the Bombay High Court in Hindustan Lever Employees Union v. State of Maharashtra, 1990 LAB IC 104.

10. Having regard to the pleadings and rival submissions, the points that arise for consideration are as under:

(1) Whether a workman who has taken voluntary retirement either pursuant to a Voluntary Retirement Scheme can be said to be a 'workman' within the meaning of Section 2(s) of the Act and if the answer is in the negative, can such workman still claim the benefit of sub-section (2) of Section 25H of the Act only on the ground that his name was on the roll of the unit immediately before its closure? and

(2) In the event of closure of the unit what are the rights of a workman whose name is on the roll of the Unit as on the date of its closure and what is the effect on a workman who had opted for voluntray retirement under a scheme after the scheme has come into effect?

(3) To what relief?

In Re points Nos. 1 and 2:

For the purpose of considering the submissions of the learned Counsel for the petitioners, it is necessary to notice the definitions of 'industrial dispute' and 'workman'. Section 2(k) of the Act defines 'industrial dispute' as to mean any dispute or difference between employers and employers or between employers and workmen, or between workmen and workmen, which is connected with the employment or with the conditions of labour, of any person. The word 'workman' as defined in Section 2(s) and as amended by the Industrial Disputes (Amendment) Act, 1982 insofar as the same is relevant for the purpose of this case is as under:

' 'workman' means any person (including an apprentice) employed in any industry to do any manual, unskilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with; or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person-

(i) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of 1957); or

(ii) who is employed in the police service or as an officer or other employee of a prison; or

(iii) who is employed mainly in a managerial or administrative capacity; or

(iv) who, being employed in a supervisory capacity, draws wages exceeding one thousand six hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.'

A person who is a workman for the purpose of the definition under Section 2(s) and for the purpose of industrial dispute under Section 2(k) ceases to be a workman if he is not dismissed, discharged or retrenched employee. If a workman is dismissed, discharged or retrenched he can still be a workman for the purpose of the Act and for the purpose of claiming the benefits under the Act. In the event of closure of an industry, a workman may suffer retrenchment. Though this legal position is disputed by the learned Counsel for the petitioners, the decided cases support the view that in the event of closure of the unit in accordance with the provisions of the Act, the workers are deemed to be retrenched. A reading of the provisions under Section 25FFF and sub-section (8) of Section 25O and Section 25F of the Act clinchingly lead to the conclusion that the relationship of 'master' and 'servant' between 'workman' and 'employer' in the event of an industry being closed down ceases and the same results in retrenchment. The retrenchment is not in the sense that there is a voluntary act resulting in the factum of severance of the relationship but a deemed retrenchment. The 'deemed retrenchment' can only result only when the Management satisfies ceriain legal requirements. If it is an industry not covered by Chapter V-B, Section 25FFF casts an obligation on the Management to issue notice to the workman who has been in continuous service for not less than one year in that undertaking immediately before such closure and also to pay compensation in accordance with the provisions of Section 25F of the Act. In the case of an industry covered by Chapter V-B, the management of the establishment which is permitted to be closed down under Section 25O, has to comply with the provisions of sub-section (8) of Section 25O in that undertaking has to pay compensation to every workman which shall be equivalent to fifteen days average pay for every completed year of continuous service or any part thereof in excess of six months. Indeed, the principle that the relationship between the 'workman' and the 'employer' comes to an end by deemed retrenchment in the event of closure of the unit under Section 25O, has been accepted by two Division Benches of the Gujarat High Court in Imambhai's case (supra) and in D.S. Vasavada's case (supra).

11. In Imambhai's case, the Division Bench of the High Court of Gujarat was dealing with a case covered by the provisions of Section 25FFF and it was held that in the event of closure of a unit in accordance with the provisions of Section 25FFF, the contract of service does not automatically stand terminated merely because the undertaking stops its manufacturing activities. The contract of service can only be terminated by a notice of termination by recourse to appropriate procedure for collective or individual retrenchment.

12. In D.S. Vasavada's case (supra), a Division Bench of the Gujarat High Courtwhich was also dealing with a case covered under Section 25FFF observed as under:

'Any person employed continues to be employed until the services are validly terminated by the employer or by mutual agreement the services come to be terminated or the employee resigns from such service. The cessation of work by an employer by closing his mill may not by itself terminate the services of the employees. An employer may close his mill for many reasons, such as nonavailability of raw material, nonavailability of requisite power, temporary financial difficulties or such other situations. Merely because he stops working the factory, it need not be that the services of the employees stand automatically terminated; they continue in service. The requirement of a valid closure which alone will put an end to the services of the employees are to be found within the provisions of the Industrial Disputes Act. ..... It isone thing to say that a man has closed his business, another to say that he has retrenched his employees. He may close his business and may not choose to send away his employees as actually has been done in regard to some mills before us or he may not advert to it at all nor apply the mind to it. It is only when closure in accordance with the enactment is effected that there would be termination of service.'

13. As already noticed, if the unit is closed down in accordance with the provisions of Section 25FFF, the same cannot be said to be complete unless the two requirements of issuing a notice and paying compensation under Section 25F are complied with in which event alone there is termination of the contract of service ensuing in retrenchment.

14. Coming to a case falling under Section 25-O, a reading of various sub-sections thereof would show that before passing an order permitting the closure of a unit, the Government is required to give a reasonable opportunity of being heard to the workmen. Further, any closure cannot be complete unless the employer fulfils the statutory requirement obligated under subsection (8) of Section 25-O. Therefore, when once the required conditions are complied with by paying the amount under sub-section (8) of Section 25-O, there is termination of contract of service amounting to retrenchment in law. To put it in another way, till the legal requirements ordained by the Act are complied with and the Government passes an order under subsection (2) of Section 25-O, the contract of service between the employer and the workman subsists and mere order by the Government under sub-section (2) of Section 25-O does not result in termination of service. This indeed supports the view that whenever there is an order passed by the Government sub-section (2) of Section 25-O permitting the closure of the unit and the closed unit complies with the provisions of sub-section (8) of Section 25-O, the same results in termination of contract of service and it amounts to retrenchment as the same results in severance of relationship of 'master' and 'servant'.

15. The next question, therefore, is what is the scope of the word 'retrenchment' as defined under the Act. As held by the Supreme Court in State Bank v. N.S. Money, : (1976)ILLJ478SC , the test to be applied while examining the complaint of unauthorised termination of contract of service is the 'fact of termination' of service and not the 'act of termination' of service. The moment the closure allowance either under Section 25FFF or under sub-section (8) of Section 25-O is paid, the same results in 'retrenchment'. Section 2(oo) at this stage may beneficially be extracted as under:

' 'retrenchment' means the termination by the employer of the service of aworkman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include-

(a) voluntary retirement of the workman; or

(b) retirement of the workman on reaching the age of Superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or

(bb) termination of the service of the workman as a result of the non-renewal of the contract of the employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or

(c) termination of the service of a workman on the ground of continued ill-health.'

16. A plain reading of Section 2(oo) shows that voluntary retirement of a workman is not considered as retrenchment. In the present case, by virtue of the orders passed by the Government on 23-9-1995 permitting the 2nd respondent to close down the unit which has resulted in retrenching the workman of the 2nd respondent unit. The question is whether those employees who opted for VRS and took voluntary retirement are also deemed to have been retrenched, consequently entitled to the benefit under sub-section (2) of Section 25H of the Act?

17. While extracting the necessary pleadings, it is noticed that VRS-95 is an optional scheme and there was no compulsion. Every workman who desired to opt for VRS was required to apply for voluntary retirement in accordance with VRS-95. Two such applications are marked as Exs.M2 and M4 before the Tribunal.

Ex.M2 is an application given by the petitioner in WP No.6325 of 2000 and it reads as under:

'To

The Factory Manager,

Shaw Wallace & Co., Ltd.,

Andhra Winery & Distillery,

Malkajgiri, Hyderabad-47.

Dated: 9-11-95

Sub: Application for Voluntary Retirement under the Voluntary Retirement Scheme, 1995 for the Unionized Employees of Andhra Winery & Distillery. Malkajgiri, Hyd.

Dear Sir,

I have read and understood the Announcement dated 24th October, 1995 and hereby apply for Voluntary Retirement under the above mentioned Scheme. 1 request you to release me from the close of working hours of 15th November, 1995.

As a consequence of my Voluntary Retirement, I am taking all the benefits under the Retirement Scheme and shall have no right or claim for re-employment or for employment of myself in the Company. 1 also further state that I have no other claim or right on the Company either monetary or otherwise.

I request you to pay all other benefits and legal dues, after deducting/adjusting amounts payable by me and after deducting applicable income tax.

In the event of my death occurring before the payment of my dues, the same shall be paid to my nominee Mrs. K. Anitha, at H.No.10-244, Vasanthapuri Colony, Malkajgiri, Hyderabad-500047.

Yours faithfully,

S. K. Komaraiah

Employee No.0184 Dept. Boiler.'

Accepting voluntary retirement of the petitioner in WP No.6325 of 2000, 2nd respondent paid an amount of Rs.1,55,976/-as per the terms and conditions of VRS-95 and deposited an amount of Rs.85,976/-in his Savings Bank account as per the scheme.

18. Relying on Ex.M2, learned Counsel for the Management submits that a workman who has applied for voluntary retirement undertaking not to claim any re-employment or any monetary benefit or otherwise cannot have any right of re-employment as the voluntary retirement is not retrenchment. According to him, those employees/workmen who did not opt for voluntary retirement alone are entitled to the benefit under subsection (2) of Section 25H of the Act. The learned Counsel for the petitioners strenuously refutes this contention. In the given circumstances of compulsorily closing down the manufacturing unit of the 2nd respondent because of the policy taken by the State to impose prohibition in the State, the workmen had no option but to compulsorily opt for voluntary retirement and except 70 casual employees, all other employees have opted for voluntary retirement. Therefore, according to the learned Counsel for the petitioners, there is an element of compulsion in forcing the workmen to opt for voluntary retirement, in which evenl; they cannot be denied the benefits under Section 25H(2). In any event, the learned Counsel submits that the words 'workmen on the roll of the unit immediately before its closure' used in subsection (2) of Section 25H may be construed as conferring a right on all the workmen on the roll of the unit immediately before its closure and as such all the workmen including those opted for voluntary retirement may be given an opportunity to offer themselves for re-employment ignoring voluntary retirement of workmen. For claiming the benefit under sub-section (2) of Section 25H, he tries to seek support from the evidence of MW1 who stated before the Tribunal that 82 workmen who also took voluntary retirement were taken back by the Management giving the benefit of Section 25H.

19. In view of my holding that though closure of the unit under Section 25-O, results in retrenchment of the employee, a employee/workman who has taken voluntary retirement after closure of the unit cannot be said to be retrenched, the point that needs to be considered is what is the reasonable interpretation or the scope of sub-section (2) of Section 25H.

20. Sub-section (2) of Section 25H as amended by the A.P. State Legislature cannot be interpreted in vaccurn. It has to be interpreted giving full scope to the words used in the sub-section as well as the words as defined in the Act. As already observed by me, a dismissed or discharged or retrenched workman is also a workman but a person who voluntarily retired cannot be a workman for the same is neither dismissal, removal, discharge nor retrenchment. Applying the principle that Legislature is presumed to be aware of the various provisions of the enactment while making amendments to the existing provisions and also applying the principle that the Legislature is aware of the law as interpreted by the Courts, the words used in subsection (2) of Section 25H viz., 'workmen on the roll of the unit immediately before its closure' shall have to be interpreted as the workmen who are on the roll of the unit immediately before its closure and who had subsequently not taken voluntary retirement after the closure of the unit. In, my considered opinion, that is a very reasonable interpretation of the provision of subsection (2) of Section 25H of the Act having regard to the other provisions of the Act as well as the decided cases. This view is also supported by the case law relied on by the learned Counsel for the petitioners.

21. In Ghatge and Patil's case (supra), the management of the Company introduced a policy of giving its trucks on contract system. All the 54 drivers working in the company resigned their jobs and took the trucks on contract basis. The trucks were entrusted to the drivers on payment of Re.1/- per mile of its use, the company undertaking to supply fuel, oil, tyres, tubes etc. The management resorted to such system in view of the Motor Transport Workers Act, 1961. The union of the motor workers of the company raised a dispute alleging that the drivers who took the trucks on contract basis lost other benefits like leave, over time payment, provident fund, gratuity etc. and the question referred to the Tribunal was, whether the contract system of running vehicles by engaging the former drivers on contract basis should be abolished. The Tribunal held that as the 54 drivers had resigned their jobs and became operators, there is no contract system of engaging the workmen and that as the truck drivers had voluntarily resigned from the service of the company, there is no element of dismissal, discharge or retrenchment within the meaning of the Industrial Disputes Act and, therefore, rejected the reference holding that there is no unfair labour practice. In the appeal by of the workers union, the Hon'ble Supreme Court agreed with the finding recorded by the Industrial Tribunal observing that as the drivers had voluntarily resigned and entered into agreements, which they considered to be more beneficial than the terms of the employment as drivers, there was no exploitation of the drivers. The following observations made by the Supreme Court are apposite:

'.....The two systems were there for thedrivers to choose. It is reasonable to think that the drivers must have chosen a system, which was considered by them to be more beneficial to themselves. There was no compulsion for the drivers to resign their jobs and they did so voluntarily obviously thinking that the new system was more profitable to them.....'.

22. In Anakapalle Co-operative Agricultural and Industrial Society Ltd v. Workmen (supra), a question arose whether, in the event of transfer of one industrial concern to another; the workmen of the transferor company are entitled to be re-appointed/re-employed in the transferee company. Ankapalle sugar company found its going tough. Therefore, they sold the establishment to a co-operative society of cane growers. The transferor company paid compensation to its employees and terminated their service, which is a requirement under Section 25FF of the Act. When the transferor handed over the concern, there were 800 workmen including 471 seasonal workmen. Out of this, the transferee-appellant company took 248 workmen into their employment besides taking some of them as seasonal employees. The claim of the remaining 48 permanent employees who were not re-employed by the transferee company was referred to adjudication. The Industrial Tribunal, Andhra Pradesh passed an award that all the workmen who were on the roll of the transferor company when the appellant-company took over should be absorbed by the appellant. It was, inter alia, contended before the Supreme Court that the reference to the Industrial Tribunal was incompetent, that the dispute was not properly sponsored by the employees union of the appellant-company and that the appellant-company already employed the full complement of the labour force and there is no scope for re-employment of the remaining unabsorbed workmen. A submission was also made that on transfer of the unit, the transferor is required to pay compensation under Section 25FF, on the happening of which, there is retrenchment of the workmen. Having regard to the special provisions under Section 25FF, the claim of the employeesof the transferor concern is only to claim compensation and no claim can be made against the transferee company for re-employment. This found favour with the Constitution Bench of the Supreme Court and the Court ruled as under:

'.....As soon as the transfer is effectedunder Section 25FF, all employees are entitled to claim compensation, unless, of course, Hie case of transfer falls under the proviso;..... This double benefit inthe form of payment of compensation and immediate re-employment cannot be said to be based on any considerations of fair play or justice. Fair play and justice obviously mean fair play and social justice to both the parties. It should, we think, not be fair that the vendor should pay compensation to his employees on the ground that the transfer brings about the termination of their services, and the vendee should be asked to take them back on the ground that the principles of social justice require him to do so....'

23. In M/s. J.K. Cotton Spinning and Weaving Mills Co. Ltd, (supra), the Supreme Court considered the case of an employee of an industrial concern who voluntarily tendered his resignation. The question before the Court was whether a person who voluntarily resigned is said to be a retrenched employee. The Supreme Court equated 'resignation' with 'retrenchment' and held that having regard to the provisions of Section 2(oo) a workman who had voluntarily resigned cannot be said to be retrenched and, therefore, he is not entitled to any benefit 'as he cannot be considered to be a workman'. The Supreme Court referred with approval to the following dictum in Santosh Gupta v. State Bank of Patiala, 1980 Lab. IC 687.

'Voluntary retrenchment of a workman or the retrenchment of the workman on reaching the age of superannuation can hardly be described as termination by the employer of the service of a workman.'

The three authorities relied on by the learned Counsel for the management support the view that a person who has volunlarily retired or a person who has voluntarily accepted the compensation under Section 25FF or a person who has voluntarily submitted resignation cannot be said to be treated as retrenched entitling him for the benefit under Section 25H(2).

24. There is another aspect of the matter. Sri G. Vidyasagar submits that the benefit under sub-section (1) of Section 25H is available to all the workers who are retrenched. The retrenchment might result in various situations--either from the operation of the provisions of Section 25F or 25FF or 25N or as held by me under 25-O. In all cases of retrenchment resulting in any of the situations, which are noticed, the learned Counsel Sri G. Vidyasagar is correct in contending that this benefit of' Section 25H(1) is available to all the workmen. According to him, by virtue of the operation of Section 25-H(2) even the employees/workmen who gave their options for voluntary retirement under an approved scheme should also be treated as workmen entitled on par with other retrenched employees. At the first blush, the argument looks to be plausible and acceptable. However, the learned Counsel for the management Sri V. Srinivas has drawn a distinction between the types of retrenchment resulting from the operation of Sections 25-F, 25-FF, 25-N and 25-O on the one hand and the retrenchment with respect to the benefit to be conferred under Section 25H(2) on the other hand. If the submission of the learned Counsel for the petitioners is to be accepted, it is likely to result in incongruous situation. For example, after the unit is closed down in accordance with law, there might be a large number of workmenwho might have attained the age of superannuation, a large number of workmen who might have submitted resignations and a large number of workmen who might have voluntarily retired or workmen who might have otherwise incapacitated. If the language employed in Section 25H(2) i.e., 'the workmen on the roll of the unit immediately before it closure' is to be given liberal meaning, as contended by Sri Vidyasagar, it will confer a right on all those persons who may not be treated as workmen within the definition of Section 2(s). On the contrary, if the submission of the management is accepted, the clear picture that would emerge is that all the workmen of the closed unit who have not resigned, who have not opted for voluntary retirement or who have not been incapacitated and whose names appear on the roll of the unit immediately before closure of the unit are entitled to the benefit under Section 25H(2). The dicta laid down by the Supreme Court in Ghatge and Patil's case (supra) and in Anakapalle Co-operative Agricultural Society's case (supra), would support such a view. As held in Anakapalle Co-operative Agricultural Society's case (supra), a workman cannot be conferred double benefit in the event of closure or in the event of transfer of the company.

25. Sri Vidyasagar relied upon the decision of the Allahabad High Court in Saroop Vegetable Product Industries Ltd., case (supra ). The decision is to the effect that in all cases of retrenchment, the benefit under Section 25H should follow and the reopened unit should offer employment to all the persons. In the case before the Allahabad High Court, the petitioner unit was closed. Thereafter the workers submitted their resignations. When the unit re-started, the workers made representation for re-employment, which was denied. An industrial adjudication, ensued and the Labour Court treated the closure as one falling under Section 25FFF and, therefore, it came to the conclusion that the management was not justified in rejecting the claim of the workmen for re-employment. In my respectful opinion, the view taken by the Allahabad High Court that even 'resignation amounts to retrenchment' is contrary to the view of the Supreme Court in J.K. Cotton Spinning and Weaving Mills's case (supra).

26. As observed in the beginning of the judgment, the facts are not in dispute. By compulsion, the unit had to be closed down and by mutual agreement VRS-95 was implemented; on their own volition the workers submitted applications to voluntarily retire undertaking not to claim any monetary benefit or re-employment, and received payments ranging about Rs.2.5 lakhs to Rs.4 lakhs from the management and, therefore, the workmen, as rightly held by the Tribunal, cannot claim double benefit. But, there is an argument made by Sri Vidyasagar that out of 167 permanent workers who opted for VRS, 82 persons were re-employed after the 2nd respondent unit was reopened and in so doing no procedure was followed and no rule was implemented. This, according to the learned Counsel for the petitioners, is an unfair labour practice. However, as rightly submitted by the learned Counsel for the management such an event is not one of the recognised unfair labour practices as per the Fifth Schedule of the Act. No doubt, Fifth Schedule is not an exhaustive list of unfair labour practices and there could be other ways and means where the management can still practice unfair labour practices. Be that as it may, in this case, the submission that no procedure or rule was followed while affording an opportunity of re-employment to the workmen who are on the roll of the unit before its closure including those who have taken voluntary retirement is without any substance. After re-opening, the 2nd respondent entered into a settlement (Exs.M6 and M7) with the union and introduced a method of rationalisation ofwork force and, therefore, it cannot be said to be unfair. Indeed, in Anakapalle Cooperative Agricultural Society's case (supra), the argument of the management that after taking over the company 248 permanent employees/workmen in the earlier transferor company were taken back and it satisfies the full complement of the labour force was accepted. The management has constitutionally recognised right to arrange its own force including fixing of the strength of work force having regard to the exigencies of manufacturing facility. Therefore, I find no merit in the submission made by Sri Vidyasagar. Points No. 1 and 2 are answered accordingly.

In Re. Point No.3:

Though the Industrial Tribunal rejected the claim of the workmen denying the benefit under Section 25H(2) of the Act, the fact remains that non-employment of the petitioners in the re-opened unit of the 2nd respondent acts harshly against them. All the workmen are in the age group of 45 to 50 years and they would have at least 10 to 15 years of active service as workmen. It is also not denied by the management, that all of them had 15 to 20 years of experience in the 2nd respondent unit. It is not in the evidence whether the 2nd respondent is venturing into expansion. However, such possibility cannot be ruled out especially having regard to the business of the 2nd respondent. Therefore, in exercise of the powers under Section 11A of the Act, this Court directs the 2nd respondent to maintain a list of the workers and as and when any recruitment is to be made, for any reason, the 2nd respondent shall consider the case of the petitioners for recruitment as fresh candidates. Indeed, to be fair to him, Sri V. Srinivas does not object to this.

27. The writ petitions are accordingly disposed of. There shall be no order as to costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //