Andhra Pradesh High Court
Judges : A.GOPAL RAO, P.CHANDRA REDDY
Indian Hume Pipe Co.Ltd. - Appellant
Versus
Presiding Officer, Labour Court, A.P. - Respondent
Decided On : 08-22-62
INDUSTRIAL DISPUTES ACT, 1947 - SECTION 2(K), 25-H - RETRENCHMENT - RE-EMPLOYMENT - WAGES - BACK WAGES - JURISDICTION OF LABOUR COURT.
Fact of the Case:
The appellant, Indian Hume Pipe Company Ltd., retrenched 40 workmen from its Ramavarappadu factory with effect from 12-6-1958 and paid them retrenchment compensation. Later, on 5-9-1958, the appellant issued a notice to the retrenched workmen offering them re-employment on lower wages. Some of the workmen demanded the same wages as before retrenchment, but the management refused. The matter was referred to the Labour Court, Guntur, under Section 10(1) of the Industrial Disputes Act, 1947 (the Act), for adjudication.
Finding of the Court:
The Labour Court held that the management was not justified in offering lower wages to the retrenched workmen and that they were entitled to be re-employed on the same emoluments as before. The court also awarded back wages at Rs. 1-7-0 per day from 12-9-1958 till the date of the award and at the pre-retrenchment rates till the date of re-employment. The appellant challenged this award by filing a writ petition under Article 226 of the Constitution of India.
Issues: 1. Whether there was an industrial dispute within the meaning of Section 2(k) of the Act to justify a reference under Section 10 of the Act? 2. Whether an employer is bound to re-employ workmen on the same conditions as to wages as were prevailing before retrenchment? 3. Whether it was within the jurisdiction of the Labour Court to give back wages?
Ratio Decidendi: 1. The definition of "industrial dispute" in Section 2(k) of the Act is wide enough to include disputes relating to contemplated employment, such as the re-employment of retrenched workmen. 2. The right to re-employment conferred upon retrenched workmen by Section 25-H of the Act implies employment on the same terms and conditions of service as before retrenchment. The employer is not at liberty to change the wage structure at his will. 3. The direction as to back wages is comprehended within the expression "matters incidental thereto" occurring in Section 10(4) of the Act. It was within the province of the Labour Court to grant back wages.
Final Decision: The court allowed the appeal in part. It quashed the order of the Labour Court insofar as it awarded back wages to the workmen. The court remanded the matter to the Labour Court to consider whether the workmen were entitled to back wages and, if so, from what date.
( 1 ) IN this appeal, the Indian Hume Pipe company Ltd. Bombay challenges the conclusions of our learned brother Seshachalapathi J. , who dismissed Writ Petition No. 376 of 1959 for the issue of a writ of certiorari to quash the award dated 16- of the Labour Court, Guntur. 2- 3. The appellant engages itself in the manufacture and sale of cement concrete articles like Hume Pipes and R. C. C. poles etc. and has a number of branches spread over India and Ceylon, one such being Located at Ramavarappadu near Vijayawada. By a notice dated 12-5-1958, all the workmen in the Ramavarappadu factory were individually notified that, with effect from 12-6-1958, they would be retrenched as the factory had no orders and also as sufficient stock of steel was not available. Pursuant to this notice, the workmen !n that factory numbering about 40 were retrenched with effect from 12-6-1958 and were paid retrenchment compensation. In this enquiry, that retrenchment is not in issue. 4. Some lime later i. e. , on 5-9-1958, the appellant Issued a notice to the retrenched workmen in these words:"we are in need of some unskilled workers, on temporary, basis in our R. C. C. Pipes manufacturing job industry and they will be recruited on 12/09/1958 at 7-30 A. M. All the retrenched workmen are hereby given notice of re-employment to offer themselves for the same, on the appointed date and in case the workmen concerned do not turn up and accept the offer on the specimen date of recruitment, their preferential claim for re-employment will be forfeited and such claims will not be considered thereafter. "5. In response to the notice, all the workmen reported themselves to duty on 12-9-1958. A flat rate of 0-12-0 besides an allowance ot 0-11-0 per day was offered to the workmen, these wages being lower than those paid to the persons who offered themselves for re-employment. Some of them demanded that the wages prevailing before retrenchment should be paid to them. The management refused to comply with this demand and so 14 of the workmen did not join duty. Upon a report of the affected workmen, conciliation proceedings were initiated by the Labour Officer but no settlement could be effected as each side stuck to its position. Thereupon, the management engaged new hands on its own terms. The Commissioner of Labour reported the matter to the State Government and the latter issued a notification under Section 10 (1) of the Industrial Disputes Act, 1947 (hereafter to be referred to as the Act) referring the dispute in the following terms to the Labour Court, Guntur. "how far the employers of the Indian Hume Pipe Company, Ramavarappadu Branch are justified in offering to the retrenched workers wages at a lower rate at the time of re-employment than what they were getting at the time of retrenchment,"6. Before the Labour Court, both sides filed statements putting forward their respective cases. The stand taken by the workmen before the Labour Court was that the attempt of the management to designate all the work- men who were working in the factory for over ten years and performing skilled and semi-skilled jobs In the manufacturing process as unskilled workmen and to offer a flat rate of Rs. 1-7-0 per day amounted to unfair labour practice and that the 14 workmen who declined to join duly on the terms offered for re-employment should be reinstated on the emoluments they were getting prior to 12-6-1958. They also claimed back wages at the old rates from 12-9-1953 still the date of re-instatement. Three of the objections formulated by the management in their reply statement are these: (1) As the workmen were retrenched with effect from 12-6-1958 and retrenchment compensation also paid, there was no jural relationship of employer and employee between the management and the workmen and consequently there was no industrial dispute within the terms of the Industrial Disputes Act, 1947 and therefore the reference was incompetent. (ii) The management was not
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