IMPORTANT POINT
Retrenchment from service – Once orders of retrenchment are set aside, workmen will naturally be entitled to continuity of service with order of back wages as determined by a Tribunal or a Court of law.

JUDGMENT :

Pamidighantam Sri Narasimha, J.

1. The Appellant is a cooperative society run by ex-officers of the three defence forces, engaged in the business of providing support services such as transportation, house-keeping and security services to companies and Government establishments. Respondent is a labour union affiliated with the Indian National Trade Union Congress, representing the drivers formerly employed by the Appellant.

2. Fifty-five drivers who are members of the Respondent Union were employed by the Appellant from 1998 through a settlement for pay and allowances. As the settlement expired on 30.06.2004, fresh negotiations between the employer and the employees commenced but did not result in any easy settlement due to claims for pay hike and demands for permanency of casual employees. Conciliation proceedings were invoked on 22.01.2007 and proceedings before the Deputy Commissioner of Labour, Pune were going on.

3. While the next date of conciliatory proceeding was fixed on 05.02.2007, the employees resorted to strike on 23.01.2007. On the same day, the Appellant filed a complaint before the Industrial Court, asserting that the strike was illegal, and the employees should be made liable for unfair labour practices. The Industrial Tribunal by an interim order dated 05.02.2007 directed employees to refrain from obstructing the movement of men, material and vehicles from the parking lots of the Appellant, and holding violent demonstrations within two hundred meters of Appellant’s premises.

4. The Industrial Tribunal later directed the Appellant to allow the employees to join duties and the employees in fact joined services on 16.03.2007. We may mention here itself that two years later, i.e. on 27.11.2009, the Industrial Tribunal by its final order declared the strike carried out by the Respondents for the period between 23.01.2007 and 15.03.2007 as illegal in terms of Section 24(1)(a) of the Maharashtra Recognition of Trade Unions And Prevention of Unfair Labour Practices Act, 1971.

5. During the pendency of the above referred proceedings, that is, immediately after 16.03.2007 when employees re-joined services, after the short period of strike, the Appellant through individual letters dated 22.03.2007 ‘retrenched’ the services of all the fifty-five employees, on the grounds that Appellant had closed its business. By the said letter, the employees were offered retrenchment compensation as per Section 25F of the Industrial Disputes Act, 1947,¹[hereinafter, referred to as ‘the Act’.]. The relevant portion of the Termination Letter is :

“You are being informed that as the bus services of the society have been broken from 23rd January, 2007 the concerned companies have decided to stop their bus services and as per that our transport contracts have expired. In this situation as the business is closed, it is not possible to give you work hence there is no option but to remove you from services.”

6. Respondent Union raised concerns with the Conciliation Officer. They demanded reinstatement of all fifty-five workmen with continuity of services and back wages, contending that there was no closure of the transport activities of the Appellant. They claimed that the act of terminating all the employees is a virtual closure, which is completely illegal.

7. While the matter was being negotiated, the Appellant started offering re-employment to all the employees through individual letters dated 13.09.2007, followed by a public notice. This offer was on new terms and conditions, and as fresh employment. This is an important fact and as the narration of events would witness, it had a direct bearing on the decision of the Industrial Tribunal.

8. As the Conciliation Officer submitted a Failure Report, the Government referred the dispute to the Industrial Tribunal, Pune,²[hereinafter, referred to as ‘the Tribunal’.] for answering the demand of the workmen for reinstatement of fifty-five drivers with continuity of service and full back wages. Be