Full Text
CIVIL APPELLATE JURISDICTION
LETTERS PATENT APPEAL NO. 275 OF 2011
IN
WRIT PETITION NO. 1428 OF 2011
1. Murlidhar Bhikoba Salunkhe (Since Deceased through his Lrs.)
1A. Smt. Sunita Murlidhar Salunkhe
Age: 54 years, Occ: Household.
1B. Shri. Kalidas Murlidhar Salunkhe
Age: 30 years, Occ.: Auto Driver, Both 1A & 1B are R/at: Lila Vihar Building, Mohannagar, Near Kalika Mata Temple, Chinchwad East, Pune-411019.
1C. Sau. Mayuri Rahul Chavan
Age :35 years, Occ:. Household, Salunkhe Chwal, Mohannagar, Near Kalubai Temple, Mahatma Fule Road, Chichwad, Pune-411 019.
1D. Sau. Kalyani Sagar Chavan
Age: 32 years, Occ:. Household.
R/at: Salunkhe Chwal, Mohannagar, Opposite Khodacha Ganpati Temple, Chichwad, Pune-411 019. .. Appellants
Vs, M/s. Advani Oerlikon Limited
Now know as M/s. Ador Welding Ltd.
A company incorporated under the Companies Act, 1956, having its Factory at Chinchwad, Pune-411 019 .. Respondent
LETTERS PATENT APPEAL NO. 278 OF 2011
IN
WRIT PETITION NO. 1403 OF 2011
1. Pradeep Prabhakar Chaudhari (Since Deceased through his Lrs.)
1A. Smt. Uma Pardeep Chaudhari
Age: 52 years, Occ: Household.
1B. Shri. Prashant Pardeep Chaudhari
Age: 38 years, Occ.: Service.
1C. Shri. Pritam Pardeep Choudhari
Age: 30 years, Occ:. Service.
1D. Shri. Pratik Pardeep Chaudhari
Age: 28 years, Occ:. Service.
All 1A to 1D are R/at: RH 83, Chitravel Housing Society, Flat No.11, Shahunagar, Chichwad, Pune-411 018. ...Appellants
Vs.
(Now know as M/s. Ador Welding Ltd.) having its Factory at Chinchwad, Pune- 411 019 .. Respondent
IN
WRIT PETITION NO. 1426 OF 2011
Ankush Thoraji Pawar
Age- 45 years, Residing at
17/4, Mangal Nagar, Opp. Pitale Milk Dairy, Wakad, Pune, Thergaon, Pune- 411 033 ...Appellant
Vs.
IN
WRIT PETITION NO. 1402 OF 2011
Ankush Waman Bhosale
Age-40 years, Residing at
Room No. 4/301, Panchawati Society, Sharadnagar, Chikali, Pune-411033 ...Appellant
Vs.
IN
WRIT PETITION NO. 1427 OF 2011
Gulab Rajaram Kalbhor
Age-45 years, Residing at
Kalbhornagar, Opp. David Brown, Chinchwad, Pune- 411 033 ...Appellant
Vs.
Mr. Vijay P. Vaidya, Senior Advocate a/w Mahendra Agvekar, Shraddha
Chavan i/b. Desai & Desai Associates for the Respondent.
JUDGMENT
1. All these Letter Patent Appeals are filed by individual workers (the Second Party workmen), who were before the 2nd Labour Court, Pune in the Reference Cases under the provisions of the Industrial Disputes Act, 1947 bearing Ref (IDA) Nos. 280 to 284 of 2003. Each of them had challenged their identical orders of retrenchment, dated 16th September, 2002. Since retrenchment amounts to a deemed Industrial Dispute under Section (2)A of the IDA 1947, these disputes were referred to the 2nd Labour Court at Pune. By a common Judgment and Award dated 18th June, 2010 all the Reference Cases were answered in the affirmative. The 1st party Management (Employer) was directed to reinstate the 2nd party workmen on their original posts with continuity of service and full back-wages with effect from 16th September,
2002. Cost of Rs. 1,000/- per case was also imposed on the Employer.
2. The 1st party Employer approached this Court by preferring Writ Petition Nos. 1402, 1403 and 1426 to 1428 of 2011. By a common Judgment dated 2nd August, 2011 delivered in all these Writ Petitions, the learned Single Judge allowed all the Petitions by quashing and setting aside the Judgment and Award of the Labour Court dated 18th June, 2010. It is in these circumstances, that the Workmen have approached this Court by preferring these Letters Patent Appeals. By an order dated 29th August, 2016, this Court expedited the hearing in the Appeals.
HISTORY OF THE LITIGATION
3. All these five workers joined employment on the dates set out in their Statements of Claims. For clarity, Mr. A. W. Bhosale joined on 7th June, 1981 as a Welder and the remaining four workmen joined in 1982 in different capacities like assembler, winder, forklift driver and helper. It is undisputed that all of them were retrenched on the same date i.e. 16th September, 2002 after having put in more than 20 years in permanent service, on the solitary ground that ‘meaningful work’ was not available to be offered to them. Since then, they have been out of employment. On 8th January, 2016, one of them, Mr. Pradip P. Choudhary passed away. On 4th April, 2016 Mr. Murlidhar B. Salunkhe passed away. Their legal heirs have been brought on record. Out of the remaining three, Mr. Ankush Bhosale attained the age of superannuation on 31st January, 2016 and the remaining two Mr. Ankush Pawar and Gulab R. Kalbhor, attained such age on 31st May, 2016. Their last drawn monthly salary, as in September 2002, as per the conciliation officer’s report, was Rs. 6,200/- (the late Murlidhar B. Salunkhe), Rs. 7,000/- (Gulab Kalbhor), Rs. 7,100 (the late Pradip Choudhary) and Rs. 7,200 (Mr. Ankush Bhosale and Mr. Ankush Pawar). [A] PLEADINGS OF THE WORKMEN
4. All these five workmen have stated in their identical Statements of Claims, as under:a. The Employer is a renowned Engineering Industry. b. Each of these workers were confirmed/permanent employees of the said Company for more than 20 years. c. In the year 2000, they joined the Bhartiya Kamgar Karmchari Mahasangh and became their office bearers. d. Since the said Union was not a puppet Union and was acting independently, the Employer developed an allergy and disengaged all these 5 workers on 16th September, 2002 taking the plea of ‘meaningful work not available’. The reasons assigned for retrenchment were frivolous and untrue. e. The Employer never reduced the work force working in the core manufacturing activities. f. The Employer did not publish a seniority list and did not affix it on the notice board meant for the workers. g. This five workers were the only workmen in the factory, who were picked and chosen for retrenchment, only because they were leading the cause of the other workers espoused by the independent and impartial external Union. h. The purported seniority list placed on record indicates that there were 45 workmen and it was only these 5 who were retrenched, because they were union leaders. i. Contractual workers were engaged in the core activities of the Company thereby proving that a false plea was taken by the Employer with the sole object of eliminating these five union members. j. These workers are out of the employment and had not been able to secure any employment so has to be in gainful employment during the pendency of the litigation. [B] PLEADINGS OF THE EMPLOYER
5. The employer preferred identical Written Statements in each of these cases and contended as under: a. The Company was hit by recession and therefore, desired to reduce the workers as there were reduced orders for manufacturing its products and because of the uneconomical production orders, the Employer was not in a position to offer any ‘meaningful work’ to these workers. b. The Employer has terminated the service of the 2nd party workmen by issuing the retrenchment orders on 16th September, 2002. c. The retrenchment order dated 16th September, 2002 issued identically to all these five workers, was accompanied with the retrenchment compensation and other legal dues and a copy of the gratuity form was also annexed. On the same day, all these five workers were retrenched. d. These workers declined to accept their retrenchment orders and, therefore, the same were served upon each of them, by postal service. e. Section 25F of the ID Act and Rule 80 of the Industrial Disputes (Bombay) Rules, 1957 were complied with. f. The allegation that these 5 workers were retrenched because they joined an external union, was refuted. g. Since the majority of the workmen accepted the Union, the Employer had no allergy towards these 5 workmen so as to terminate their services. h. It was denied that there was availability of work even for these five persons. i. It was reiterated that there was ‘no meaningful work’ for these 5 workers and hence, their services were terminated. j. The allegation that juniors were retained, was refuted. The allegation of engaging contract labourers, was also refuted. k. The contents of the Statement of Claim were denied. [C] ORAL EVIDENCE OF THE WORKERS
6. Each of these five workmen stepped into the witness box by tendering individual affidavits in lieu of oral evidence. Their statements in the examination-in-chief are almost identical and which can be summarized as under:a. These workers have reiterated their positions as helper/assembler/welder/winder/forklift driver etc. There is no dispute on this count. b. They were working for 20 years and more, in the permanent service of the Employer. c. None of them were issued with a charge-sheet or subjected to disciplinary action. d. They joined the external independent union in the year 2000 and gradually became its office bearers. Since the Employer felt antagonized, that these 5 leaders were picked and chosen for retrenchment. e. The work orders with the company had never reduced. f. The company was ever flourishing. There was no reduction in manufacturing. g. There was no proof that the work orders had fallen or that the work of manufacturing had reduced. h. Contractual/temporary employees who were engaged after the workers joined duties in 1981/1982, were retained after retrenchment of these Petitioners. i. Not a single section or department of the factory was shut down on the ground of alleged fall in work orders or due to recession. [D] CROSS EXAMINATION OF THE WORKERS
7. In the cross-examination, these workers have stated as under:a. These workers had initially become members of Bhartiya Majdoor Sangh, and were its members for around 5-6 years. b. The Company and the Bhartiya Majdoor Sangh had entered into one or two long term settlements. c. Thereafter, the workers joined an internal union. Few long term settlements were signed by the Employer with such internal union. d. The retrenched workers were office bearers of the newly established external Bharatiya Kamgar Karmachari Mahasangh and they were protected workmen. e. The workers could not state the names of those employees who were recruited after retrenchment letters were received by these workers by post. f. None of them have claimed their gratuity. g. It was denied that the seniority list was published by the Company on its notice board on 2nd h. No permission of the appropriate Government was taken to retrench these workers. [E] ORAL EVIDENCE OF THE EMPLOYER
8. The Employer examined its sole witness, who was the Manager Quality (R & D), as in the year 2002. On the day of the recording of his oral evidence in 2010, he was the General Manager (Quality and Engineering). His examination-in-chief can be summarized as under:a. He has interacted with the retrenched workmen. b. There were Unions of workmen in the Company. c. The relations between the Employer and the Union were cordial. d. The agreements between the Employer and the Union were signed. e. The condition of the Company was not good in 2002 and it decided to reduce the strength of the workmen. f. The seniority list was published on the Company’s notice board on 2nd September, 2002. He identified the seniority list at Exhibit-28. g. Notice was given to the appropriate Government regarding reducing the strength of the workmen. h. The letter/notice forwarded to the appropriate Government was identified and marked as Exhibit-29. i. It was denied that new workmen were appointed in place of the retrenched workmen. j. It was denied that junior workmen were allowed to continue when the 2nd party workmen were retrenched. [F] CROSS EXAMINATION OF THE EMPLOYER WITNESS
9. In the cross-examination of the sole witness of the Employer, he has stated as under:a. The Written Statement does not bear the signature of the Employer witness. b. Eight days before the cross-examination, the witness gathered knowledge about the contents of the Written Statement from his Advocate. c. No permission was obtained from the Government of Maharashtra for retrenching these workmen. d. He has no idea of any prior permission being required to be obtained from the Government of Maharashtra before retrenching the workmen. e. On 16th September, 2002, no department, which was either temporary or permanent, was closed down. f. Exhibit-29 is only information given to the Government about retrenchment. g. He had no knowledge whether the Company annexed evidence as regards non-availability of work, along with the letter at Exhibit-29. h. He was unable to state as to how many workmen were on the roles of the Company, as on 16th i. He did not have the details of the strength of workmen in each department of the Company, as on 16th j. His nature of duties was related to shop floor and he was aware of the workmen working on the shop floor. k. He did not know whether any evidence was led before the Labour Court to indicate that the work load of the Company was reduced. l. He admitted that no evidence is led in the Court to suggest that the orders for manufacturing were getting reduced. m. No evidence is led before the Court to show that ‘no meaningful work’ was available for the retrenched workers. n. He had no evidence to indicate as to what was the meaningful work required to be carried out by the helper. o. No evidence is led in the Court to prove that in the year 2002, the financial condition of the Company was not good. p. It was denied that the Petitioners were retrenched only because they have joined an external independent union. [G] ORAL SUBMISSIONS OF THE WORKERS
10. The learned Advocate for the workers has reiterated on the basis of the pleadings in the Statements of Claims that the sole reason for retrenching the 5 workers, was the false plea that the Company is facing shortage of work orders, recession and losses. Since this is a false plea, the Employer could not establish this ground by leading oral and documentary evidence. Because these workers had been leading the new union in the company, the Employer became antipathetic towards these 5 and decided to retrench them. The reason for their retrenchment was that ‘no meaningful work’ was available for them. No evidence was led by the Employer to establish the sole reason set out in the retrenchment notice. As such, the very foundation/ground for retrenchment was not proved by the Employer before the Labour Court. [G] ORAL SUBMISSIONS OF THE EMPLOYER
11. The learned Advocate for the Employer/Management has relied upon the Judgment of the learned Single Judge and has canvassed that once Section 25F is complied with, the Labour Court is not required to consider any other aspect. An issue as to whether the employer justifies the retrenchment, was not framed by the Labour Court. He places reliance upon the judgment of the Hon’ble Supreme Court in Parry and Co. Ltd. V/s. P.C. Pal, Judge of the Second Industrial Tribunal, Calcutta and Others, (1969) 2 SCR 976. The relevant paragraph nos 12 and 13, read as under:- “12. In D. Macropollo & Co. v. Employees' union this Court held that if a scheme of reorganisation has been adopted by an employer for reasons of economy or convenience and it has been introduced in all the areas of its business, the fact that its implementation would lead to the discharge of some of the employees would have no material bearing on the question as to whether the scheme was adopted by the employer bona fide or not. In the circumstances, an Industrial Tribunal considering the issue relating to retrenchment, should not attach any importance to the consequences of reorganisation. The resulting discharge and retrenchment would have to be considered as an inevitable, though unfortunate, consequence of such a scheme. It also held that where the finding of a tribunal is based on wrong and erroneous assumption of certain material facts, such a finding would be perverse. A recent decision in Ghatge & Patil Concern's Employees' union v. Ghatge & Patil (Transport) (P) Ltd.[5] was a case of an employer reorganising his business from conducting a transport business himself through employees engaged by him to conducting it through a contract system whereunder he let out his motor trucks to persons who, before this charge, were his employees. Admittedly, this was done because he could not implement some of the provisions of the Motor Transport Workers Act, 1961. The change over to the contract system was held by the Tribunal not to have been effected for victimising the employees. The employees had voluntarily resigned and hired the employer's trucks on contract basis. It was held that a person must be considered free to so arrange his business that he avoids a regulatory law and its penal consequences which he has, without the arrangement, no proper means of obeying. In Workmen of Subong Tea Estate v. Outgoing Management of Subong Tea Estates this Court laid down the following propositions: (1) that the management can retrench its employees only for proper reasons, which means that it must not be actuated by any motive of victimisation or any unfair labour practice, (2) that it is for the management to decide the strength of its labour force, for the number of workmen required to carry out efficiently the work in his industrial undertaking must always be left to be determined by the management in its discretion, (3) if the number of employees exceeded the reasonable and legitimate needs of the undertaking it is open to the management to retrench them, (4) workmen may become surplus on the ground of rationalisation or economy reasonably or bona fide adopted by the management or on the ground of other industrial or trade reasons, and (5) the right to affect retrenchment cannot normally be challenged but when there is a dispute about the validity of retrenchment the impugned retrenchment must be shown as justified on proper reasons i.e. that it was not capricious or without rhyme or reason.
13. Since this is an appeal arising from a writ petition for certiorari we also would not interfere with the conclusions arrived at by the Tribunal except on grounds on which the High Court could have done. Mr Gupte's contention was that the finding of the Tribunal were beyond its jurisdiction, that they were unwarranted by evidence on record and were based either on wrong assumptions or mere conjectures without any foundation in the evidence, and therefore, this is a fit case for our interference. It is not in dispute that the Company gave up 11 out of its 21 agencies in Calcutta, that is, more than half of its agency business was given up during the years 1960 and 1961. There was clear and unchallenged evidence that certain agencies were likewise given up in other places including Madras. The Manager gave evidence that this was done in pursuance of the policy decision taken by the Company to reorganise its business by concentrating more on its manufacturing side than its agency business as the Company found the agency business unprofitable on account of import restrictions and other reasons. The Tribunal, however, rejected this evidence on the ground that the policy decision being the function of the Board of Directors, the Manager was not competent to depose about it and that if the Company wanted to establish it should have produced a resolution of the Board and on that ground held that the Company had failed to prove the said policy. In the first place we fail wholly to appreciate the Tribunal's view that the said policy could not be proved through the manager. In the second place, in the very first letter of the union to the Deputy Labour Commissioner, as also during the conciliation proceedings, it was assumed that the Company had taken such a decision, that consequently retrenchment was apprehended and that therefore that officer should intervene. In these circumstances, the finding that the Company had failed to establish its policy was not only beyond the scope of the enquiry before the Tribunal but totally invalid. As held in J.K. Iron and Steel Co. v. Mazdoor union the Tribunal had to confine itself to the pleadings and the issues arising therefrom and it was therefore, not open to it be fly off at the tangent disregarding the pleadings and reach any conclusion that it thought as just and proper.” [EMPHASIS SUPPLIED]
12. He further submits that, if such an issue is not framed, there is no reason for the Labour Court to consider the aspect of reasons for the retrenchment of these workers. We find that, it is crystallised in Parry and Co. (supra) that the Employer has to prove the reasons for retrenchment. It was pointed out to the learned Single Judge that since Rule 80 was complied with by publishing a notice on the notice board, the Labour Court could not have gone into the aspect of whether, factually the work had reduced or whether, factually there were circumstances to dispense with the service of these five workmen. It was canvassed that the Labour Court had committed an error in concluding that the workmen were illegally retrenched from service. Unless the Labour Court concluded that there was violation of Rule 80, without justification, reinstatement in service could not have been granted by the Labour Court. It was further canvassed that once the retrenchment compensation was paid to the workers, the termination was rendered legal. There was no need to justify the retrenchment. C O N C L U S I O N S
13. We find that the examination and cross-examination of the sole Employer witness, has had a disastrous effect on the Employer’s case. Firstly, the witness has stated that the notice was published on the Company’s notice board. This is fatal to it’s case. The notice indicating the seniority of the workers and identifying the workers to be retrenched, has to be published on the notice boards meant for the workers. Practically, in all factories, such notice boards are normally at conspicuous places near the shop floors/machine shops/lockers/canteens/change rooms/etc. The purpose is to let the workers and it’s union know as to who is being retrenched. If a union exists, many employers also serve copies of such seniority/retrenchment notices, on the Union, which has the right to espouse the individual cause of the workman u/s 22 of the MRTU & PULP Act, 1971. These workers have specifically averred that the notices were not published on the workers notice board. It is also noteworthy that not a single worker or the Union raised any objection in 15 days. This lends credence to the contention of these workers that the notice was never published on their notice boards, hence, they had no idea about the Employer’s design to retrench them. So also, the Employer’s witness has admitted that it was published on the Company’s notice board.
14. The learned Single Judge has drawn his conclusions from paragraph 8 onwards, wherein various provisions of the Industrial Disputes Act and the Rules of 1957, are reproduced. It is concluded that the bare reading of Section 25F shows that an Employer can retrench the workmen who have been in continuous service for not less than one year, giving one month’s notice in writing indicating the reasons for retrenchment or by paying salary in lieu of notice. The Employer prepared the seniority list and the same was published on the notice board on 2nd September, 2006. Thereafter, the letter of retrenchment was issued on 16th September, 2002. The learned Single Judge accepted the statement made by the Company in the retrenchment notice that due to recession, there is no sufficient work available in the Company and hence, it decided to retrench the services of 5 workmen out of the 45. It was completely lost sight of that, a mere bald statement by the Employer is not enough to prove a case of retrenchment against workers who have been working for more that 20 years.
15. We find that the learned Single Bench has failed to consider that an Employer does not have an unfettered right of retrenching workmen after they have been working for over two decades. The law of retrenchment, in light of Section 25F of the ID Act and Rule 80 of the ID Rules, is one of the safeguards against uncontrolled or unjustified acts of an Employer. If service of a permanent Employee who has worked for two decades, is to be retrenched merely by payment of retrenchment compensation, it would lead to the resurrection of the ghost of hire and fire policy. Workmen in private industries are extended adequate security in employment under various enactments. Merely by paying retrenchment compensation, would not vest an unfettered right in an Employer to dispense with the services of long standing workmen on the ground that ‘meaningful work’ is not available in the company.
16. The learned Single Judge relied upon the Judgment cited by the Employer in Bombay Union of Journalist and others Vs. the State of Bombay and another [AIR 1964 SC 1617] and concluded that the Employer can retrench the Employees by offering requisite remuneration by way of retrenchment compensation. In our view, this is not the ratio laid down in this judgment. The ratio is that, if an employee has worked for more a year in the continuous and uninterrupted service of the Employer in the preceding 12 calendar months, his service cannot be dispensed with, without compliance of Sec. 25F of the I D Act, 1947. This does not vest an unfettered right in an Employer to retrench an employee at it’s free will and desire, rather, it’s whims and fancies.
17. In Jagbir Singh V/s. Haryana State Agriculture Marketing Board And Anr., AIR 2009 SC 3004, the Hon’ble Supreme Court concluded that if the workman had worked for a short period and was out of employment for a long period, coupled with the fact that he was a daily wager, grant of compensation in lieu of reinstatement, continuity and full back wages, would be appropriate.
18. In the case of Management of Oasis School, Hyderabad V/s. Labour Court, Himayatnagar, Hyderabad & Ors., 1990 II CLR 506 (Andhra Pradesh High Court), the Court noticed that the employer had not led evidence to specifically deny the definite assertion of an employee that there was no policy of rationalization or reorganization of the work force by reduction of labour. The retrenchment was held to be bad in law, though on the ground that all three conditions under Section 25-F of the Industrial Disputes Act, being axiomatic, had to be followed strictly. The same view has been taken by the High Court of Kerala in Ollur Regional Imitation Dimond Mfrs Industrial Coop. Society Ltd. V/s. Labour Court and Another, 1993 II CLR 312.
19. This Court held in ANZ Grindlays Bank, Mumbai V/s. Gen. Secretary Grindlays Bank Employees Union, Mumbai, 2001 LAB I. C. 3563, that the reason for retrenchment has to be considered while dealing with a challenge to retrenchment. In this case, the Union had alleged that there was a temporary increase in work and this was not proved by leading evidence. In the cases in our hands, the Management did not lead evidence to prove that the work orders had depleted, the manufacturing work had reduced and a chunk of the labour force was not required. It is well settled that any litigating party, has to ‘first plead and then prove’. In these cases before us, the Employer did plead that the only reason for retrenching the 5 workmen was that ‘meaningful work’ was not available for them, due to the reasons set out in the Written Statement. However, admittedly, the Employer did not lead evidence to substantiate the foundation of the reason for retrenchment.
20. In Nar Singh Pal V/s. Union of India And Others, AIR 2000 SC 1401, the Hon’ble Supreme Court concluded that acceptance of retrenchment compensation does not debar a retrenched employee from challenging his retrenchment from service, being violative of fundamental or constitutional rights. This is one safeguard or a safety measure to protect workmen against any arbitrary or capricious act of an Employer. Nevertheless, payment of retrenchment compensation cannot be a solitary reason to dispense with the service of a workman, who faces sudden unemployment, which is nothing short of a civil death to the Employee and his family.
21. In the present cases, the entire thrust of the Employer was not that it simplicitor wanted to retrench the workers. The thrust was on an emphatic stand taken by the Employer that because there is recession, work orders have depleted, manufacturing work has reduced and therefore, there was a necessity to reduce man power/labour force. None of these aspects, though pleaded, were proved before the Labour Court. The witness of the Employer admitted in his cross-examination that no evidence has been led by the Employer to support the reasons underlying the notice of retrenchment.
22. The Labour Court had framed an issue viz. “does the 2nd party prove that the 1st party illegally retrenched its service with effect from 16th September, 2002”. On the basis of oral and documentary evidence, the Labour Court arrived at a finding of fact that the Employer had illegally retrenched their service. We would not lend much importance to the finding that the information to the Government was subsequent. This may not be as germane to the cause raised by the workers, as is the fact that the foundational pleading of the workers that the stand taken by the Employer viz. fall in work load or manufacturing orders had reduced, was not proved by the Employer, though this was the only reason for retrenching the workers.
23. The onus and burden initially was on these workers. They averred that there was no fall in the work orders and the factory was not facing losses. There is a foundational pleading in the Statements of Claims, with an emphatic statement on oath by way of oral evidence, that it was untrue that the Company was hit by recession, that the work reduced, that the work orders had depleted and therefore, the Employer had no reason to retrench the workmen. The burden, therefore, shifted to the Employer to prove it’s foundation for retrenching the workers. Per contra, the Employer did take a specific stand that it was hit by recession, the work orders had reduced and there was no ‘meaningful work’ available to be offered to these five workmen, out of whom one person was a sole forklift driver. However, the Employer chose not to lead evidence to prove this foundational pleading set out in the retrenchment notice, as well as it’s Written Statement.
24. The learned Single Judge lost sight of the fact that even if it was assumed that the seniority list was published, a copy of which was not delivered even to the Union which represented these 5 workers, not a single employee working in the core manufacturing activity, was retrenched by the Employer. If the work orders had fallen, the effect would have been that the manufacturing of products had to be reduced. If the work had reduced, if the Company was facing recession and losses, it is not a mere coincidence that these 5 helpers who were Union leaders, could have been the only persons to be retrenched and not a single employee working on the manufacturing process was retrenched. If the production/manufacturing of products is to be reduced due to such reasons, those workers working in such production activities, should have been retrenched. It is common knowledge that workforce is reduced or laid-off if the company faces recession/lack of work orders, fall in manufacturing, etc.
25. At page No. 37 to 40, is the copy of the seniority list which the Employer had purportedly published on the Company’s notice board. In the 1st five departments in relation to Carpentry, Diesel ARC Miller/Assembler, Fitter/Welder, Machine Shop-Machinist/Cy. Grinder, Turner, Maintenance Helper, Plumber/Fitter, Electrician, Rotary Welding Helper, Assembler, Hksaw Op./Fitter, Tool Room Turner, Machinist, Jig Borer, Static Welding Helper, electricians, Wire Feeders-Static, Torch Painter/Assembler etc., not a single worker was retrenched. None of these persons who were working in the manufacturing process, were retrenched. The five workmen, one of whom was a Helper in the Static Welding/ Torch Painter department and a Winder in the same department, a lone Helper from the Main Stores, a sole fork-lift driver, the only Helper in the department of Receipt Stores, were the only 5 persons who have been retrenched. Co-incidentally, they happened to be union leaders.
26. We are unable to comprehend as to why did the Employer not lead evidence before the Labour Court to substantiate it’s foundational reason, the edifice on which, stood the entire case for retrenching these 5 particular workmen. The learned Advocate for the Employer has canvassed before us that because the Labour Court did not frame an issue of justifiability, it had no reason to prove the foundation of the reason for retrenchment. We find this submission to be unconscionable and unsustainable. 5 workers who had worked for 20 years, have been retrenched on the specific ground of lack of work orders, fall in manufacturing activities, recession and losses and none of these grounds are proved. Moreover, in Parry and Co. (supra), cited by the Employer, the reproduced paragraphs indicate the view of the Hon’ble Supreme Court, that the Employer has to prove the reason for retrenchment.
27. Dispensing with the services of five workers rendering them to unemployment and starvation, is nothing short of imposing civil death on them and that too on the spacious plea that the retrenchment compensation has been paid. If such ground is to be accepted, it would amount to a superficial appreciation of the case of retrenchment. If the foundation ground/reason is removed from the picture, the Employer had no reason to retrench these workmen.
28. The sole and exclusive reason for retrenching these five workers was that there was no work available to be offered to them (‘meaningful work’ as is the language used by the Employer), in the absence of establishing as to whether the work had really fallen, the work orders had depleted and the company was facing losses. The least to be done in such circumstances was to bring evidence on record through the annual Balance sheets/ annual returns/ comparative charts of the earlier high work orders, vis-a-vis, the reduced work orders, to indicate losses, bring evidence to indicate the earlier quantum of production and the depleted work orders immediately preceding the date of retrenchment. Evidence should have been brought on record to indicate which manufacturing activity was reduced and from which department an employee working in that manufacturing activity was retrenched. An Employer cannot play with the lives of workmen is this fashion.
29. We find that these grounds, which are fundamental to the case of an Employer to prove retrenchment on the ground of recession, fall in work orders, reduction in manufacturing activities and continued losses, was not looked into by the learned Single Bench.
30. On the one hand, the Labour Court had arrived at a finding on facts and on the other hand, the Employer was addressing a superficial ground, conveniently restricting it’s case only to payment of retrenchment compensation. As we have recorded above, if an unfettered right to retrench permanent workers is to be granted to an Employer, the hire and fire policy would revisit public and private industrial sector.
31. It is in the facts and circumstances of this case, that we conclude that, all these 5 LPAs deserve to be allowed, with notional reinstatement, continuity in service and back-wages.
WHAT RELIEF BE GRANTED TO THE WORKERS
32. We have recorded above that all the five employees have already attained their age of superannuation in 2016 and the two of them have already passed away in 2016, during the pendency of these cases. None of the three could be granted effective reinstatement in service. The relief available in these circumstances, to undo the injustice suffered by them, could be in terms of back-wages or part back-wages for the period of 14 years of involuntary unemployment having been foisted on them, along with gratuity.
33. When we posed our query on this aspect to the learned Advocates for the respective parties, both have sought time to consult their clients and make a statement. Therefore, to consider what relief could be granted to these employees in these peculiar circumstances and whether compensation could be quantified, we adjourned the matter for tomorrow (22/08/2025) at 3.pm as per their request.
34. The learned Advocates again sought time till Monday (25/08/2025). 25/08/2025
35. Today, the learned Advocate for the Employer offered some compensation. The workers disagreed.
36. It cannot be disputed that these workers/their legal heirs, must have indulged in some work and earned a livelihood, if not by way of a continued employment or assured monthly salary.
BACK-WAGES
37. To balance the equities, we find it appropriate to conclude that these 3 workers and the widows of the 2 deceased workers, can be granted 75% of the back-wages, from their dates of retrenchment till their dates of superannuation/death, whichever is earlier, with 5 % interest p.a. till the amounts are actually paid. For the purpose of considering their last drawn salary, we have noted that their salary was Rs.7000/- as in 2002. In 2016, the minimum wages had grown to around Rs.15,000/-. Today the minimum salary is Rs.30,000/-, as is informed by the learned Advocate for the Employer. Hence, we are considering an average of Rs.10,000/- as the per month salary for the purpose of calculating the back-wages.
38. Gratuity without interest, shall be paid separately for the period of service from their dates of employment till their retrenchment, as they voluntarily did not claim it, though called upon by the Employer to fill the requisite forms. Gratuity from the dates of retrenchment till their dates of superannuation/death, whichever is earlier, shall attract 10% interest as is statutorily payable. Leave encashment until the dates of retrenchment shall also be paid with 5 % interest p.a.
39. Hence, these LPAs are partly allowed. The common Judgment and order of the Learned Single Judge stands quashed and set aside. The Judgment and Award of the Labour Court dated 18/06/2010, shall stand modified in terms of the directions set out in paragraph 36 and 37. Accordingly, monetary benefits shall be payable to these 3 workers and the widows of the 2 deceased workers, within 60 days from today. [ GAUTAM A. ANKHAD, J.] [RAVINDRA V. GHUGE, J.]