IN THE HIGH COURT OF BOMBAY
NISHITA MHATRE, J.
Mahavir Steel Industries (P) Ltd., Pune and another - Appellants
Versus
Pune Workers Union, Pune and another - Respondents
Writ Petition No. 5548 of 1997 with 7251 of 1999
Decided On : 21-02-2011
Retrenchment - Industrial Disputes Act, 1947 - Section 25-H, Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 - Item 9 of Schedule IV - [ULP] - [IT] - [25-H, MRTU & PULP Act, I.D. Act] - The court discussed the validity of retrenchment, calculation of retrenchment compensation, breach of Section 25-G, and unfair labor practices under Item 9 of Schedule IV of the MRTU & PULP Act. The court found the retrenchment to be invalid due to improper calculation of retrenchment compensation and failure to follow the principle of 'last come, first go' as per Section 25-G. It also held that the company committed an unfair labor practice by not allowing the retrenched workmen to resume work when the mill restarted, and directed payment of 50% of backwages to the workmen.
Fact of the Case:
The case involved a dispute between a company and a union representing retrenched workmen. The company retrenched 36 workmen citing non-availability of raw material, leading to a legal battle over reinstatement and backwages. The Industrial Tribunal rejected the demand for reinstatement, and the Industrial Court directed the company to allow 13 workmen to resume duties and pay 50% of backwages.
Finding of the Court:
The court found the retrenchment to be invalid due to improper calculation of retrenchment compensation, failure to follow the principle of 'last come, first go' as per Section 25-G, and the company's unfair labor practices. It directed payment of 50% of backwages to the workmen and remanded the case to ascertain wages and closure of mills.
Issues: Validity of retrenchment, calculation of retrenchment compensation, breach of Section 25-G, unfair labor practices under Item 9 of Schedule IV of the MRTU & PULP Act.
Ratio Decidendi: The court held that the retrenchment was invalid due to improper calculation of retrenchment compensation, failure to follow the principle of 'last come, first go' as per Section 25-G, and the company's unfair labor practices. It directed payment of 50% of backwages to the workmen and remanded the case to ascertain wages and closure of mills.
Final Decision: Writ Petition No. 5548/1997 is dismissed. Rule discharged. Writ Petition No. 7251/1999 is allowed. Rule made absolute. No orders as to costs. Parties to appear before the Tribunal on March 7, 2011. The Tribunal to decide the two issues within six months from today.
Nishita Mhatre, J.
1. These two Writ Petitions have been heard together since the facts involved in both the Petitions are interlinked. The parties to both the Petitions are the same. For the sake of brevity, the petitioner in the Writ Petition No. 5548/1997 will be referred to as "the Company" and the respondent No. 1 will be referred to as "the Union". Writ Petition No. 7251/1999 has been filed by the Union representing the workmen employed by the Company. The Award dated March 19, 1999 passed by the Industrial Tribunal. Pune, in Reference (IT) No. 27/1991, rejecting the demand for reinstatement with continuity of service and full backwages of 36 workmen, has been challenged in this Petition. Writ Petition No. 5548/1997 impugns the order dated October 17, 1997 passed by the Industrial Court, Pune in Complaint (ULP) No. 873/1991. The Industrial Court has partly allowed the complaint filed by the Union under Item 9 of Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971, (for short "the MRTU & PULP Act"). It has directed the Company to allow 13 workmen who had not relinquished their right of reemployment to resume duties within one month of the date of the order, in compliance with Section 25-H of the Industrial Disputes Act, 1947, (for short "the I.D. Act"). A further direction of payment of 50% of the backwages to these workmen from February 4, 1991 till they were provided work with the Company has also been given.
2. The Company took over the assets and liabilities of the Maharashtra Steel Industries Private Limited with effect from 10th November, 1980. These included two Rolling Mills i.e. a 6" Mill and a 10" Mill. A lay off was declared by the Company on November 29, 1989 citing the non availability of raw material as the reason for the lay off. The Union filed Complaint (ULP) No. 109/1990 on February 19, 1990 against this lay off. By an order dated March 27, 1990 the Company retrenched 36 workmen on the ground of non availability of raw material. An industrial dispute was raised by the Union on behalf of the workmen claiming reinstatement with continuity of service and full backwages. The dispute was referred for adjudication to the Industrial Tribunal, Pune in Reference (IT) No. 27/1991.
3. The Complaint (ULP) No. 109/1990 was dismissed for non-prosecution. It appears that the Union sought a modification of the order passed by the Industrial Court dismissing the complaint. Accordingly, the Industrial Court allowed the complaint to be withdrawn and directed the Union not to file a fresh complaint on the same cause of action with a further direction to pay costs to the Company. Being aggrieved by that decision, the Union preferred Writ Petition No. 1299/1990 before this Court. The order directing the Union to pay costs was deleted by consent.
4. An industrial dispute for reinstatement with continuity of service and full back wages was raised by the Union. The Company refused to concede the demand. The Union then approached the Conciliation Officer, who submitted a failure report to the Appropriate Government on December 18, 1990. Before the dispute could be referred to the Industrial Tribunal for adjudication, the Company called upon the retrenched workers to report for duty on or before February 4, 1991 as the raw material required for the manufacturing process was available. Without prejudice to the industrial dispute which was raised on their behalf by the Union, the workmen reported for duty on February 4, 1991 in order to exercise their preferential right of reemployment. The Appropriate Government referred the industrial dispute, which was raised by the Union for the reinstatement of the 36 workmen, to the Industrial Tribunal on September 7, 1991 in Reference (IT) No. 27/1991. It appears that the workmen, who had reported for duty without prejudice to their rights in the Reference, were not given work. They therefore filed Complaint (ULP) No. 873/1991 c
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