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Judgment
(1) The legality of an award of the Labour Court, Madras, in Industrial Dispute No. 15 of 1958, on its file is the subject matter of this petition. The
dispute which was referred for adjudication by the Labour Court and the legality in the award which is in controversy in this petition, is whether the
dismissal of eight workers of the petitioners'' establishment was justified and the relief to which they were entitled.
(2) The petitioners were an engineering firm with branches all over India. They had a branch at Madras and it was the case of the management that
the Madras branch having proved a loss, they were taking steps to have it closed. The Tribunal found as a fact that losses were being incurred by
the Madras branch so that the desire of the management to have it closed was bona fide. The question however that had still to be considered was
as to whether the retrenchment of these eight workers was or was not justified.
The Tribunal found that the retrenchment of six of the workers was unjustified for the reason that the management had not established that they
could not be absorbed in the works which they were admittedly carrying on to complete the contracts which had already been taken on hand. It
was common ground that with a view to closure, the petitioner establishment had not undertaken any new contracts.
(3) Learned counsel for the petitioner submitted that there was error both in the approach as well as in the conclusion of the Tribunal as regards its
finding that the six workers could have been absorbed in the works which they were admittedly having in the Madras State. I consider it however
unnecessary to deal with this matter because the finding of the Tribunal is also rested on a failure to comply with the terms of S. 25(F) of the
Industrial Disputes Act.
The marginal note of S. 25(F) reads: ""Conditions precedent to retrenchment of workmen"" and it enacts that no workman employed in an industry,
who has been in continuous service for not less than one year under the employer, shall be retrenched by that employer until................ and it sets
out three conditions subject to which alone retrenchment could be effected. It is common ground that the conditions laid down to S. 25(F) were
not conformed to by the petitioner and the finding of the Tribunal on this part of the case if not challenged.
(4) Learned counsel submitted that the present was not a case of retrenchment under S. 25-F but of a closure of business falling within S. 25-FFF,
and, no doubt, if it was a case of closure S. 25-F would not apply, and this has been laid down by the Supreme Court in Barsi Light Rly. Co. Ltd.
v. K. N. Joglekar, 1957 1 Lab LJ 243 : AIR 1957 SC 121. But the question still remains as to whether in the case of the petitioner establishment
it is a case of closure or only a retrenchment falling within Sec. 25-F.
(5) It is common ground that the petitioners are executing orders which they had on hand in respect of engineering contracts; only they are not
entering into fresh commitments by taking on new contracts. Would this amount to closure is the question to be considered. Pointing out the
distinction between the cases of discharge and closure, Das J. (as he then was) who delivered the judgment of the Supreme Court in the case just
now referred to, said that retrenchment means.
the discharge of surplus labour or staff by the employer for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary
action, and it has not application where the services of all workmen have been terminated by the employer on a real and bona fide closure of
business as in the case of Sri Dinesh Mills Ltd., or where the services of all workmen have been terminated by the employer on the business or
undertaking being taken over by another employer in circumstances like those of the railway ''company.
In my judgment this passage can only mean in order that one can speak of a closure, it should be complete in the sense that there is no work
remaining to be done after the termination of the employment of the workman. The expression ""all workman"" used in the two places in the passage
which I have extracted earlier, appears to me to point to this, as the correct criterion for distinguishing between the case of retrenchment where the
termination of employment is only of particular workmen or a particular proportion of workmen or a particular proposition of workmen and those
cases where on closure the business itself ceased to exist.
It is admitted that in this case the business was run during the relevant period, though it was conducted merely for the purpose of working out
contracts already taken. This would not however detract from the termination of employment being a retrenchment within Sec. 25-F of the
Industrial Disputes Act. Admittedly as there was non-compliance of the terms of Sec. 25-F, it follows that the award of the Tribunal cannot be
challenged as illegal.
(6) The petition fails and is dismissed. No costs.
(7) Petition dismissed.