Bhushan Lal Sharma and Others vs Presiding Officer, Labour Court and Others

Amarjit Chaudhary, J.—The petitioners who were working on different posts in the respondent No. 2 Company for the last many years were retrenched from service, with effect from March 3, 1982. They along with other retrenched workmen raised an industrial dispute which was ultimately referred to respondent No. 1 for adjudication, who declined the reference of the petitioners and other workmen vide award dated August 3, 1987 (Annexure P-2). Similarly, the workmen in Civil Writ Petition Nos. 591 and 2279 of 1988 also, whose services were also retrenched on the same date and whose references were also declined by the aforesaid impugned award dated August 3, 1989, as also the petitioners, have prayed for quashing the impugned award. Since common question of law and fact is involved in all the three writ petitions, they are being disposed of by this common judgment.

The sole question before the Labour Court-respondent No. 1 was, whether the termination of services of the workmen was justified and in order? If not, to what relief/exact amount of compensation were they entitled? The Labour Court observed that the termination of the workmen was legal, valid and in order.

The impugned award has been challenged by the petitioners mainly on the grounds, firstly, that before making retrenchment, no permission of the Government was obtained as envisaged under Sub-section (2) and Clause (c) of Sub-section (1) of Section 25N of the Industrial Disputes Act, hereinafter referred to ''the Act'' and secondly, the petitioner-workmen were not paid compensation/wages for the period of notice nor any notice for the period as provided under the provisions of Section 25N of Act, before they were retrenched, was given to them.

Shri Ashok Bhan, Senior Advocate, appearing for the respondent Management has contended that the dispute fell within the purview of Chapter V-A of the Act and the procedure for retrenchment as envisaged u/s 25F of the Act was duly complied with. He further urged that the provision of Chapter V-B of the Act were not applicable in the case of the workmen-petitioners as the provision of Sub-sections (i)(c)(2) and (6) of Section 25N of the Act were struck down by a Full Bench Rajasthan High Court in J.K. Synthetics v. Union of India 1984 (48) F.L.R. 125 , and subsequently the Madras High Court in K.V. Rajendran Vs. Dy. Commissioner of Labour, Madurai and Others, had followed the abovesaid principles of law.

The case of the petitioners-workmen is that more than 700 workmen were employed in the respondent-company, which is undisputedly an industrial establishment on an average per working day prior to the year 1982. In reply to para 2 of the writ petition it has been stated by respondent No. 2 that out of 600 workers 219 were retrenched. Shri P.L. Bhatish, the Personnel Officer of the respondent company who was examined by the Labour Court admitted in his cross-examination that at the time of retrenchment of workmen, more than 300 employees were working with the establishment. It is, therefore, plain from the admission made by the Personnel Officer of the Management Company that more than 300 workmen were employed in the respondent-company on an average working day prior to the year 1982.

Now it has to be seen as to which Chapter is applicable to the dispute between the parties.

For the purpose, the relevant provisions of the Act are reproduced hereunder:

"Section 25K. Application of Chapter V-B:

(1) The provisions of this Chapter shall apply to an industrial establishment in which not less than three hundred workmen were employed on an average per working day for the preceding twelve months, (as existed before amendment).

Section 25N. Conditions precedent to retrenchment of workmen:

(1) No workman employed in any industrial establishment to which this Chapter applies, who has been in continuous service for not les than one year under an employer shall be retrenched by that employer until -

(a) the workman has been given three months notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice.

(b)* * * *

(c) notice in the prescribed manner is served on the appropriate Government or such authority as may be specified by the appropriate Government by notification in the official Gazette and the permission of such Government or authority is obtained under Sub-section (2). (Before its amendment in 1984)."

From the persual of the above said provisions it is apparent that the dispute was covered by the provision of Section 25N of the Act for, there were more than 300 employees working in the company at the relevant time and any departure from this provision would certainly vitiate the impugned award of the Labour Court.

Admittedly, the Rajasthan High Court in J.K. Synthetics case (supra) has held that the "provisions of Sub-section (i)(c), (2) and (6) of Section 25 of the Act 1976 were violative of Article 19(1)(g) of the Constitution of India, which view was followed later on by the Madras High Court in K.V. Rajendran ''s case (supra) by holding that the provision of Section 25 of the Industrial Disputes Act, are arbitrary, unreasonable and un-constitutional. Significant to note is the fact that in both the aforesaid cited judgments, Clause (a) of Section 25N of the Act was not struck down and as such it is effective. This clause contains the condition precedent for retrenchment of the employee-workman. Clause (a) envisages that the workman is to be given three month''s notice in writing intimating the reasons for retrenchment before retrenching an employee and in lieu of such notice, the wages for the period of notice have to be paid. But in the instant case the Management was under the wrong belief that Section 25F was to be complied with for retrenching an employee-workman, whereas the retrenchment in this case should have been made by following the provisions of Section 25N(1)(a) of the Act. Since the relevant procedure was not followed, the retrenchment is vitiated on account of the procedural irregularities.

For the reasons recorded above, the petitions are allowed and the impugned award dated August 3, 1987 is quashed and the workmen be entitled to reinstatement and consequential reliefs as per the rules. In the circumstances of the case, there will be no order as to costs.