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HIGH COURT OF CALCUTTA
P. B. Mukharji, S. A. Masud
HAJEE ISMAIL SAID AND SON (PVT.) LTD. - Appellant
Versus
FOURTH INDUSTRIAL TRIBUNAL - Respondent
A. F. O. O 371 Of 1961
Decided On : JUNE 18, 1965
INDUSTRIAL DISPUTES ACT - Termination of service under Standing Orders - Whether always retrenchment - Interpretation of Section 2(oo) - Scope of Standing Orders - Closure of business - Compensation.
Fact of the Case:
The appellant company, a private limited company carrying on business in the manufacture of country spirit and rectified and denatured spirit, terminated the services of 313 of its workmen in accordance with the Standing Orders. The workmen raised an industrial dispute, and the Industrial Tribunal awarded compensation to all the workmen. The appellant company challenged the award on the ground that the termination of service was not retrenchment within the meaning of Section 2(oo) of the Industrial Disputes Act, but a termination under the conditions laid down in the Standing Orders.
Finding of the Court:
The court held that the termination of service in the present case was not retrenchment within the meaning of Section 2(oo) of the Industrial Disputes Act. The court interpreted Section 2(oo) to mean that termination of service for any reason whatsoever, other than the exceptions specified in the section, is retrenchment only if it is a termination for a "reason" implying volition and choice on the part of the employer. If the termination is due to compelling circumstances beyond the control of the employer, it is not retrenchment. The court also held that the Standing Orders have a sanctity and importance of their own and that a termination under the Standing Orders is not liable to be interfered with unless it is a colourable exercise of power or a result of victimisation or unfair labour practice.
Issues: 1. Whether termination of service under Standing Orders is always retrenchment within the meaning of Section 2(oo) of the Industrial Disputes Act? 2. Scope and interpretation of Section 2(oo) of the Industrial Disputes Act. 3. Validity and enforceability of Standing Orders. 4. Circumstances under which termination of service under Standing Orders can be considered retrenchment. 5. Applicability of Section 25fff of the Industrial Disputes Act to cases of closure of business.
Ratio Decidendi: 1. Termination of service under Standing Orders is not always retrenchment within the meaning of Section 2(oo) of the Industrial Disputes Act. 2. Section 2(oo) of the Industrial Disputes Act defines retrenchment as termination of service for any reason whatsoever, other than the exceptions specified in the section. However, the court interpreted the section to mean that such termination is retrenchment only if it is a termination for a "reason" implying volition and choice on the part of the employer. If the termination is due to compelling circumstances beyond the control of the employer, it is not retrenchment. 3. Standing Orders have a sanctity and importance of their own and are binding on both the employer and the workmen. A termination under the Standing Orders is not liable to be interfered with unless it is a colourable exercise of power or a result of victimisation or unfair labour practice. 4. Termination of service under Standing Orders can be considered retrenchment if it is a colourable exercise of power or a result of victimisation or unfair labour practice. 5. Section 25fff of the Industrial Disputes Act, which deals with compensation for retrenchment, is applicable to cases of closure of business only if the closure is due to unavoidable circumstances beyond the control of the employer.
Final Decision: The court set aside the award of the Industrial Tribunal and quashed the order of the High Court discharging the Rule in respect of the remaining 246 workmen represented by the Russa Distillery Workers' Union. The court also dismissed the cross-appeal filed by the respondent opposite party No. 4 in respect of the 67 workers represented by the Russa Distillery Employees' Union.
( 1 ) THIS is an appeal from the judgment and order of D. N. Sinna, J. discharging the Rule obtained by the appellant company in respect of 246 of its workmen.
( 2 ) THE significant point for determination in this Appeal is whether termination of service in accordance with the Standing Orders is always and necessarily a retrenchment within the meaning of Section 2 (oo) of the Industrial Disputes Act, and if it is not so always, in which cases such termination is retrenchment.
( 3 ) THE petitioner is a private limited company carrying on business in the manufacture of country spirit and rectified and denatured spirit. This business is exercised and can only be exercised in terms of an Excise license issued to the petitioner appellant and under its terms the Government fixed the price of the spirit and sanction from the Commissioner of Excise was necessary in order to exceed such a price. The workmen employed by the petitioner company are opposite party No. 4, and are represented by the Russa Distillery Workers' Union. There is another Union by the name of the Bussa Distillery Employees' Union which represented 87 of the workers.
( 4 ) THE events involved in this dispute relate back to the incidents that happened in 1959. It is the appellant's case that on the 23rd April, 1959, the situation was such that the appellant was compelled to close the Distillery. Then there was an agreement between the appellant and its workmen. A brief account of these facts may be helpful at this stage. The workmen after a strike notice dated the 9th March, 1959, on the issues relating to the retrenchment and change of service conditions struck work from the 9th April, 1959. The Management notified to the workmen on the 23rd April, 1959 of their decision to close the factory for the reasons stated in that notice. The dispute was then taken up in conciliation proceedings. The Management was thereafter informed by the Excise Directorate that they would be receiving a certain quantity of molasses in a year although that meant a reduction of their previous quantity. The Management thereafter decided to reopen the establishment with about 64 workmen, The workmen not having agreed to accept the offer of the management, the Establishment could not be reopened. After discussion in conciliation proceedings on the 21st May and 22nd May, 1959, a certain Agreement was reached on or about the 25th May, 1959. The essence of this agreement is that the Establishment shall reopen on the 25th May, 1959, with all workmen on roll on the 8th April, 1959, and this complement will work until the 30th May, 1959 on their normal wages. From the 1st June, 1959, the daily complement of workmen in the establishment would be 100 and the establishment would work on weekly rotation basis and another complement of 100 would be replaced each week. The list was to be drawn up jointly by the management and the Union. It was also agreed that in working out the programme of work, the workmen who would be out of employment from the 1st June, 1959, should be considered as on lay off and was entitled to the lay off benefits. The attempt, however, to work this agreement did not succeed for reasons beyond the, control of the appellant.
( 5 ) THE main reason for the failure of this agreement' was that the Excise Department of the Government failed to supply the quantity of molasses and did not renew the license for the manufacture and sale of the country spirit Without these two, it was natural that this particular business in distillery could not be carried on. The foundation on which the agreement could be worked failed. In fact the appellant's case is that there was no work for these workers. The facts are stated in the appellant petitioner's notice dated the 9th April, 1959.
( 6 ) THIS notice was followed by the notice of termination of service which the appellant petitioner gave to its workmen. The notice of termination is dated the 10th July, 1959 and reads as f
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