Non-compliance with the provisions of Section 25-H of the Industrial Disputes Act entitled the terminated workmen to reinstatement and full back wages when the factory was restarted.

JUDGMENT

S.C. Gupte, J. - This petition challenges an award passed by the Labour Court at Pune in a reference made to it under Section 12(5) of the Industrial Disputes Act, 1947 ("Act").

2. The reference concerned the second party union's (i.e. the Respondent's) demand for reinstatement with continuity of service and full back wages to ten workmen represented by it. The Petitioner, who was the first party to the reference, opposed it. Its case before the reference court was that the unit was closed down and in accordance with negotiations with the representative union, closure compensation was paid to all workmen. The reference court did not accept the case of the first party that all ten employees, having entered into an agreement through their representative union (Maharashtra Labour Union) with the first party for accepting such payment vide receipts dated 9 August 1997, which were on record, gave up their right to reinstatement or reemployment and that they were no longer workmen within the meaning of Section 2(s) of the Act having given up their lien over employment. The court noted that in the first place, the first party had not produced any agreement entered into by these ten employees through Maharashtra Labour Union with the first party; the first party had also not led any oral evidence to prove this fact. Though the first party produced purported receipts (receipts dated 9 August 1997), the employees' denial of such payment was supported by certified true copies of cheques, which had been brought on record by the Manager of Oriental Bank Ltd. The court held that the first party, accordingly, had not proved that the workmen had been paid ex-gratia amounts for overriding their rights of reinstatement or re-employment. The court further observed that even assuming that the employees had accepted ex-gratia payments as per the alleged receipts, such acceptance could not deny the benefit of law to these workmen. The court observed that the parties could not enter into any agreement contrary to the provisions of law. The court observed that the employees had the right of re-employment under Section 25-H of the Act when the unit was restarted by the first party. On the question as to whether the first party had restarted its unit and whether by not reemploying these workmen, it had violated the provisions of Section 25- H of the Act, the court held that in the first place, the first party had not shown that it had bonafide closed down its business or undertaking. The court observed that even if there were to be a legally admissible closure, it was valid upto the date of restarting of the factory by the first party. The court observed that the first party had started its factory, including manufacturing activity, on 1 November 1997. The court noted that after restarting of the factory, the first party was duty bound to give notice to these employees to provide an opportunity for re-employment. Inasmuch as it had deprived the employees of such opportunity by recruiting other workmen for manufacturing activities, the aggrieved employees deserved to be granted benefits under Section 25-H of the Act. The court found that the first party had not complied with the provisions of Section 25-H and, accordingly, the ten employees, represented by the second party, were entitled to reinstatement with continuity of service and full back wages from the date of restarting of the factory by the first party.

3. If one has regard to the statement of claim filed by the second party union, in coming to its conclusion, as above, the Labour Court has clearly misdirected itself and the proceedings. Section 25-H talks of re-employment of retrenched workmen. It provides for an eventuality where workmen are retrenched and the employer proposes to take into his employment persons other than the retrenched workmen. The section requires the employer to give an opportunity to the retrenched workmen, in such manner, as may be prescribed, to offer themselves