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1960 Supreme(Bom) 33
IN THE HIGH COURT OF BOMBAY
Desai S.T. and Desai V.S. , JJ.
Appellants: Tulsidas Khimji
Vs.
Respondent: F. Jeejeebhoy of Bombay and Ors.
Special Civil Appln. No. 1342 of 1959
Decided On: 14.04.1960
Counsels:
For Appellant/Petitioner/Plaintiff: S.V. Gupte and K.H. Cooper, Advs., i/b., Amarchand and Mangaldas and Malvi Ranchhodas and Co., Attorneys
For Respondents/Defendant: N.V. Phadke and N.D. Hombalkar, Advs.
The interpretation of the term "industrial establishment" in Section 25-G of the Industrial Disputes Act, 1947, and the application of the relevant tests to determine whether four departments of a partnership firm constituted a single industrial establishment for the purpose of retrenchment.
Headnote:
INDUSTRIAL DISPUTES ACT - SECTION 25-G - SINGLE INDUSTRIAL ESTABLISHMENT - RETRENCHMENT - INTERPRETATION OF THE TERM "INDUSTRIAL ESTABLISHMENT" - RELEVANCE OF OWNERSHIP, MANAGEMENT, CONTROL, EMPLOYMENT, CONDITIONS OF SERVICE, FUNCTIONAL INTEGRALITY, AND GENERAL UNITY OF PURPOSE - APPLICATION TO A CASE INVOLVING FOUR DEPARTMENTS OF A PARTNERSHIP FIRM.
Fact of the Case:
The petitioners, a partnership firm, carried on business as (1) Gearing and Shipping Agents, (2) Insurance Agents, (3) Godown Keepers, and (4) Cotton Supervisors and Controllers. They had four different departments for these businesses: the Clearing and Shipping Department, the Insurance Department, the Godown Department, and the Cotton Supervising and Controlling Department. Due to a fall in business, the petitioners retrenched 14 clerks and two peons from the Clearing and Forwarding Departments and the Godown Department, following the principle of "last come first go" within each department. The second respondent, a trade union representing the employees, raised a dispute regarding the retrenchment, which was referred to the Central Government Industrial Tribunal for adjudication.
Finding of the Court:
The Industrial Tribunal held that the four departments of the petitioners constituted a single industrial establishment and that the retrenchment should have been effected on the principle of "last come first go" from amongst the whole clerical cadre and from the peons respectively. The Tribunal ordered the reinstatement of 10 clerks who were found to have been retrenched illegally.
Issues: 1. Whether the four departments of the petitioners constituted a single industrial establishment for the purpose of Section 25-G of the Industrial Disputes Act, 1947. 2. Whether the retrenchment effected by the petitioners was in accordance with the provisions of Section 25-G.
Ratio Decidendi: 1. The term "industrial establishment" in Section 25-G of the Industrial Disputes Act, 1947, must be interpreted with reference to the object and purpose of the provision, which is to regulate and restrict the contractual right of the master to dispense with the service of the servant and to provide safeguards against the indiscriminate and improper exercise of that right. 2. In determining whether there is a single industrial establishment or different industrial establishments, the following tests are relevant: geographical proximity, unity of ownership, management and control, unity of employment and conditions of service, functional integrality, general unity of purpose, etc. 3. In the present case, the four departments of the petitioners were distinct and complete units carrying on different lines of business, with separate management and control, independent employment and conditions of service, and no functional integrality. Therefore, they did not constitute a single industrial establishment for the purpose of Section 25-G.
Final Decision: The Court quashed and set aside the Award passed by the Industrial Tribunal, holding that the Tribunal's view that the four departments constituted a single industrial establishment was erroneous and unsustainable.
2. The petitioners are a Partnership Firm registered under the Indian Partnership Act, 1932, and carry on business as (1) Gearing and Shipping Agents. (2) Insurance Agents (3) Godown Keepers and (4) Cotton Supervisors and Controllers. The petitioners have four different departments for the business carried on by them and these departments are--
1. The Clearing and Shipping Department,
2. The Insurance Department,
3. The Godown Department, and
4. The Cotton Supervising and Controlling Department.
On 15th November 1958 the petitioners gave notice of termination of employment to 14 clerks and two peons from their Clearing and Forwarding Departments and the Gcdown Department and after fol-lowing the principle "last come first go" from the said respective departments, they retrenched as from the 15th November 1958 14 clerks and two peons after paying these retrenched employees all their earned wages, leave wages, one months pay in lieu of notice, retrenchment compensation and also the bonus, which was due lo them. The second respondent, which is a Trade Union of the Transport and Dock Workers, raised a dispute with regard to the retrenchment of these employees. The Conciliation in respect of this dispute before the Regional Labour Commissioner, Central Bombay, failed and failure report under Section 12(4) of the Industrial Disputes Act was made by that Authority to the Central Government on 7th February 1959. The Government of India thereafter on 28th February 1959 referred the dispute to the Central Government Industrial Tribunal, Bombay, under Section 7(a) and clause (d) of sub-section (1) of Section 10 of the Indus-irfal Disputes Act, 1947.
3. In the statement of claim tiled by the iccond respondent before the Tribunal, it was con-tended that the retrenchment was not justified and secondly the proper procedure according to law was not adopted by the petitioners in retrenching the employees. On these contentions the second respondent prayed that the petitioners be ordered to reinstate the employees with back wages from 15th November 1958 till they were reinstated and the petitioners should he further ordered to pay compensation tor the period of their enforced unemployment. The petitioners in their written statement before the Tribunal contended that inasmuch as the Order of Reference included workmen in their employment other than those engaged in the Clearing and Shipping works at the decks, the Cental Government had no jurisdiction and authority to make any order referring the industrial dispute to adjudication relating to the workmen other than those employed in the docks and, therefore, the Order of Reference was bad in law and the Tribunal had no jurisdiction to entertain the Reference. On merits it was contended that the retrenchment was justified and the proper procedure was followed in retrenching the employees.
4. The preliminary objection raised by the petitioners to the jurisdiction of the Tribunal was negatived by the Tribunal. Although respondent No. 2 had contended that the retrenchment was not justified, that contention was given up before the Tribunal. The only dispute, therefore, which was canvassed before the Tribunal related to whether proper procedure had been followed by the petitioners in retrenching the employees. In this connection it was the contention of the respondent No. 2 on behalf of the employees that all the different departments of the petitioners constituted one industrial establishment and the retrenchment should have been effected on the principle of "last come first go" with reference to the entire staff of all the departments and the Head Office together. On the other hand, it was contended by the petitioners that the four different departments were distinct and different in
