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2010 (3) Supreme 382
SUPREME COURT OF INDIA
Aftab Alam and DR. B.S. Chauhan, JJ.
M/s. Empire Industries Ltd. — Appellant
versus
State of Maharashtra & Ors. — Respondents
Civil Appeal No. 3003 of 2005
Decided on : 17-03-2010
Words and Phrases- Retrenchment -Retrenchment is defined in the Act to mean termination of the service of a workman by the employer for any reason whatsoever, otherwise than as punishment for any misconduct and further subject to the four exceptions enumerated in clauses (a), (b), (bb) and (c) of section 2(oo) of the Act- Retrenchment being termination of service for no fault on the part of the workman is likely to visit the concerned worker(s) and his/their families with disastrous consequences- Retrenchment is an important and serious issue in industrial law since its wanton and improper use can become a major source of industrial unrest and disharmony- The issue of retrenchment is, therefore, not left uncontrolled but is regulated in great detail by the law-The Industrial Disputes Act lays down not only certain inflexible preconditions that must be satisfied before an employer can resort to retrenchment but also a detailed procedure following which retrenchment can be carried out. (Para 21)
Facts of the Case :
An Order was issued herein in the instant case by Government of Maharashtra under Section 10(3) of Act prohibiting continuance of the lock-out in appellants factory. Appellant, which is a public limited company incorporated under the Companies Act, 1956 seeks to challenge said order. Appellant assailed the government order prohibiting the continuance of lock-out in its factory, Garlick Engineering by raising a simple point. With reference to the closure notice, he submitted that the closure of the factory was in connection with three demands, namely, (i) the workmen should abjure agitational activities and desist from intimidation and acts ofviolence, (ii) the workmen should accept a ceiling on dearness allowance and (iii) the workmen should agree to reduction of the workforce and retrenchment of a number of workers. Out of the three demands the government had referred only one concerning the ceiling on dearness allowance for adjudication to the Industrial Tribunal and yet issued the notice prohibiting closure of the factory. It was contended that as long as all the demands leading to the strike or the lock-out were not referred to adjudication under section 10(1) of the Act, it was not open to the government to prohibit the strike or the lock-out, as the case may be
Findings of the Court :
Subject of retrenchment being fully covered by the statute, it is not left open for the employer to make a demand in that connection and to get the ensuing industrial dispute referred for adjudication in terms of section 10(1) of the Act .To say, that even without following the provisions of section 25N of the Act, it is open to the employer to raise a demand for retrenchment of workmen and to ask the government to refer the ensuing dispute to the Industrial Tribunal for adjudication, would tantamount to substituting a completely different mechanism in place of the one provided for in the Act to determine the validity and justification of the employer’s request for retrenchment of workers. The nature of the power of state government and its functions under the two provisions are completely different . A reference under section 10(1) of the Act cannot be used to circumvent or bypass the statutory scheme provided under section 25N of the Act.There cannot be any settlement between parties,superseding provisions of sections 25N and 25O of the Act.On the material date there was no dispute on the basis of any demand raised by the appellant in regard to retrenchment of any workers in factory, Garlick Engineering. Any retrenchment of worker(s) could only be effected by following the provisions laid down under the Act and the Rules. Hence it was not open to management to make a demand/proposal for retrenchment of workmen and disregarding the provisions of the Act ask the government to refer demand/dispute under section 10(1) to the tribunal for adjudication. The only demand raised by management regarding imposition of ceiling ondearness allowance was already referred to the Industrial Tribunal- Hence, appropriate government was fully competent and empowered to issue impugned order prohibiting closure of the factory. There was no illegality or infirmity in the closure notice.Appeal having no merit was dismissed.
JUDGMENT
Aftab Alam, J. —
1.The appellant, which is a public limited company incorporated under the Companies Act, 1956 seeks to challenge the order dated September 23, 1992 issued by the Government of Maharashtra in exercise of the powers conferred by sub-section (3) of section 10 of the Industrial Disputes Act, 1947 (for short ‘the Act’) prohibiting continuance of the lock-out in its factory, Garlick Engineering at Ambernath, Thane.
2.The appellant first challenged this order before the Bombay High Court in Writ Petition No.6051/1995. The writ petition was dismissed by a learned single judge of the court by judgment and order dated February 9, 2001. Against the judgment of the single judge, the appellant preferred an internal court appeal (LPA No. 70 of 2001) which too was dismissed by a division bench of the court by judgment and order dated April 1, 2005. The appellant has now brought the matter in appeal before this Court.
3.It may be stated here that during the course of this protracted litigation the factory was closed down on April 26, 1999 and since then it remains closed. The validity of the factory’s closure is not in issue. This means that the relevance of the present appeal is only for the period September 23, 1992 (the date on which the prohibition order was issued) to April 26, 1999 (when the factory was finally closed down). In case, the impugned prohibition order is held legal and valid and the appeal is dismissed the lock-out in the factory after September 26, 1992 would be illegal in terms of section 24(O) of the Act and the appellant would be liable to face the legal consequences. If, on the other hand the appeal succeeds and the prohibition order is struck down as illegal and invalid, that would be the end of the matter.
4.Mr. Shanti Bhushan, learned Senior Advocate, appearing for the appellant assailed the government order prohibiting the continuance of lock- out in its factory, Garlick Engineering by raising a simple point. With reference to the closure notice, he submitted that the closure of the factory was in connection with three demands, namely, (i) the workmen should abjure agitational activities and desist from intimidation and acts of violence, (ii) the workmen should accept a ceiling on dearness allowance and (iii) the workmen should agree to reduction of the workforce and retrenchment of a number of workers. He further submitted that out of the three demands the government had referred only one concerning the ceiling on dearness allowance for adjudication to the Industrial Tribunal and yet issued the notice prohibiting closure of the factory. Mr. Shanti Bhushan contended that as long as all the demands leading to the strike or the lock- out were not referred to adjudication under section 10(1) of the Act, it was not open to the government to prohibit the strike or the lock-out, as the case may be. Learned counsel submitted that the government would derive the legal authority to prohibit a strike or a lock-out in terms of section 10(3) only after it had referred for adjudication all the disputes leading to the strike or the lock-out, as the case may be. He further submitted that it was not open to the government to refer selectively only a few out of several demands for reference and yet prohibit the lock-out or the strike in connection with those demands and, thus, close all doors for the concerned party for realization of the demands that were left out of reference. He submitted that this position would be clear from a plain reading of section 10(3) of the Act which is as follows:
10(3): Where an industrial dispute has been referred to a Board, Labour Court, Tribunal or National Tribunal under this section, the appropriate government may by order prohibit the continuance of any strike or lockout in connection with such disputes which may be in existence on the date of the reference.” (Emphasis added)
Learned counsel submitted that the power and the authority to prohibit a strike or lock-out could
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