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1960 Supreme(SC) 58

SUPREME COURT OF INDIA
1st March, 1960.
P.B. GAJENDRAGADKAR, K. SUBBA RAO AND K.C. DAS GUPTA, JJ.
M/s. Swadesamitran Limited Madras, Appellants
Versus
Their Workmen, Respondents.
Civil Appeal No. 483 of 1958.
Advocates appeared
Mr. M. C. Setalvad, Attorney-General for India (Mr. R. Ganapathy Iyer, Advocate and Mr. G. Gopalkrishnan, Advocate of M/s. Gagrat and Co. with him), for the Appellants; Mr. C. Anthoni Pillai, President, City Printing Press Workers Union, for the Respondents.

Advocates:
C.ANTHONI PILLAI, G.GOPALAKRISHNAN, GAGRAT JANEDRA LAL, M.C.SETALVAD, R.Ganapathy Iyer

The industrial rule of "last come first go" is intended to afford a safeguard against discrimination of workmen in the matter of retrenchment, and the employer must justify any departure from the rule before the industrial tribunal.

Headnote:
INDUSTRIAL DISPUTE - RETRENCHMENT - JUSTIFICATION - INDUSTRIAL RULE OF "LAST COME FIRST GO" - DEPARTURE FROM THE RULE - VALIDITY - UNFAIR LABOUR PRACTICE - REINSTATEMENT - COMPENSATION.
Fact of the Case:

The appellant, Messrs. Swadesamitran Ltd., Madras, retrenched 39 workmen in May 1951 due to financial losses and the introduction of mechanization. The respondents, the workmen, went on strike in protest, and the dispute was referred to the Industrial Tribunal for adjudication. The tribunal found that the strike was unjustified and that the retrenchment was justified, but it held that the principle of "last come first go" had not been followed in selecting the personnel for retrenchment and ordered the reinstatement of 15 workmen. The Labour Appellate Tribunal upheld the findings of the industrial tribunal and directed that the remaining 24 retrenched workmen be awarded compensation.
Finding of the Court:

The Supreme Court held that the Labour Appellate Tribunal did not exceed its jurisdiction in examining the merits of the retrenchment effected by the appellant. The court held that the industrial rule of "last come first go" is intended to afford a safeguard against discrimination of workmen in the matter of retrenchment, and that the employer must justify any departure from the rule before the industrial tribunal. The court also held that the appellant had not shown any valid or reasonable ground for departing from the usual rule in retrenching the 15 workmen, and that the retrenchment of these workmen amounted to an unfair labour practice and victimisation.
Issues: 1. Whether the Labour Appellate Tribunal exceeded its jurisdiction in examining the merits of the retrenchment effected by the appellant? 2. Whether the appellant had justified its departure from the industrial rule of "last come first go" in retrenching the 15 workmen? 3. Whether the appellant was justified in retrenching the remaining 24 workmen?
Ratio Decidendi: 1. The industrial rule of "last come first go" is intended to afford a safeguard against discrimination of workmen in the matter of retrenchment, and the employer must justify any departure from the rule before the industrial tribunal. 2. The appellant had not shown any valid or reasonable ground for departing from the usual rule in retrenching the 15 workmen, and the retrenchment of these workmen amounted to an unfair labour practice and victimisation. 3. The appellant was justified in retrenching the remaining 24 workmen, but the award of compensation to these workmen was a matter of discretion and was not open to challenge in the appeal.
Final Decision: The appeal was dismissed with costs.

Judgment

GAJENDRAGADKAR, J. : This appeal by special leave arises from an industrial dispute between Messrs. Swadesamitran Ltd., Madras (hereinafter called the appellant) and their workmen (hereinafter called the respondents). On November 3, 1951, three items of dispute were referred for adjudication to the Industrial Tribunal at Madras by the Madras Government under S. 10(1)(c) of the Industrial Disputes Act, 1947 (Act XIV of 1947) (hereinafter called the Act). One of these items was whether the retrenchment of 39 workmen effect by the appellant in May 1951 was justified, and if not, what relief the retrenched workmen were entitled to. It would be relevant to mention briefly the material facts leading to this dispute. It appears that on August 26, 1950, the respondents addressed a charter of demands to the appellant in which eleven demands were made, and they intimated to the appellant that, if the said demands were not granted, they would go on strike. The appellant pointed out to the respondents that it was working at a loss and that proposals for retrenchment and rationalisation were then under its active consideration. It promised the respondents that as soon as its financial condition improved their demands would be sympathetically considered. Thereupon the demands were withdrawn; but on January 24, 1951, another communication was addressed by the respondents making as many as thirteen demands coupled with the same threat that if the said demands were not granted the respondents would go on strike. A copy of this communication was sent to the State Government which was requested to refer the said demands for adjudication to the industrial tribunal. The Government, however, referred the matter to the Conciliation Officer who found that the demands were not justified. He accordingly made a report on February 22, 1951. Immediately thereafter the respondents wrote to the Government repeating their request for reference, but on April 24, 1951, the Government ordered that no case for reference had been made.

2. Meanwhile the appellant was taking steps to effect retrenchment in the staff owing to the steep rise in the prices of newsprint and scarcity of supplies, the imposition by the Government of India of a price-page schedule and the progressive introduction of mechanisation in the composing section by installation of lino-type machines. When the respondents came to know about this their Union called for a strike ballot and as a result of the ballot the respondents decided to go on strike. A notice in that behalf was issued on May 9, 1951. The appellant then appealed to the respondents not to precipitate matters, promised to consider their demands as soon as its financial position improved and warned them that, if they refused to report for work in accordance with the strike notice, it would deem to amount to resignation of each one of the strikers of his job. The Conciliation Officers who was approached by the appellant also advised the respondents not to go on strike. Nevertheless the respondents went on strike on May 30, 1951. Before the respondents thus went on strike services of 39 members of the staff had been terminated by a notice as a measure of retrenchment with effect from May 18, 1951. It is the retrenchment of these 39 workmen which led to the industrial dispute with which we are concerned in the present appeal.

3. Before this dispute was thus referred for adjudication the respondents had filed a writ petition in the Madras High Court asking for a writ calling upon the Government to make a reference under S. 10(1)(c) of the Act. This writ application was allowed; but on appeal the Court of Appeal modified the order issued by the original court by substituting a direction that the Government should discharge its duties under Section 12(5) of the Act. On June 12, 1951, the strike was called off by the respondents and they offered to resume work; but by then the appellant had engaged new hands and so it was able to re

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1960 Supreme(SC) 58

The industrial rule of "last come first go" is intended to afford a safeguard against discrimination of workmen in the matter of retrenchment, and the employer must justify any departure from the rule before the industrial tribunal.

Cases Referred (1)