Closure of a unit justified, but retrenchment compensation must comply with statutory provisions under the Industrial Disputes Act.

ORDER :

Challenging the award passed by the Labour Court in and by which the retrenchment of the workmen, while the Management had filed W.P. No.2204/2012 questioning the order of payment of compensation upon retrenchment, W.P. No.15002/2013 has been filed by the Union questioning the retrenchment along with compensation and praying for reinstatement of the workmen along with backwages and all other attendant benefits.

2. For the sake of brevity, the parties to the lis wil be referred to as management and workmen respectively.

3. The brief facts, as could be ascertained from the dispute, which has been referred to the court below, are as under :-

The employees of the Union (who will be referred to as ‘workmen’ hereinafter for brevity), and other workmen were originally employed in Hindustan Motors Ltd. During February, 2001, which company was taken over by the Management by absorbing all the employees. The Management began its operation with the said employees and the earlier Union under the Hindustan Motors was rechristened as the aforesaid Union by securing and protecting their statutory rights and interest in accordance with law.

4. It is the further averment of the Union that demand was raised for wage revision and non-consideration of the same led to raising of an industrial dispute in I.D. No.2/2003, which is pending adjudication and in the said backdrop, the management, without any just and lawful reasons declared closure on 26.4.2003, which act was challenged by filing W.P. No.14329/2003 and this Court finally disposed of the said writ petition on 7.10.2003 directing the Union to raise an industrial dispute and seek reference and the Management was directed to defer its action till final decision is taken by the Labour Court. Adhering to the said order, the Union approached the Labour Conciliation Officer and raised an industrial dispute.

5. The main ground raised in the dispute suggesting the reasons for closure and describing the same as illegal and unsustainable was premised on the fact that the correspondence between the Management and the Union would clear reveal that only to wriggle out of the statutory liabilities and lawful demands made by the workmen, vexatious and fictitious reasons have been invented for closure of the unit. It was further submitted that without obtaining any prior permission pending adjudication of I.D. No.2/2003 is highly illegal and unsustainable.

6. It was further submitted that the sudden closure of the Unit had caused non-employment of more than 200 workmen and all workmen are suffering and, therefore, the said declaration of closure is illegal and, therefore, direction was sought for, for reinstatement of the workmen.

7. Counter was filed on behalf of the Management that the performance of the Pondicherry Unit for the year ended December 2001-2002, upon the said unit being taken over from Hindustan Motors Ltd., having found to be not upto the expected level, it was decided in the Board Meeting to close down the said Pondicherry unit and, therefore, on 25.4.2003, notice was issued u/s 25 FFA of the Act informing the Government of Pondicherry about the intention to close down the unit with effect from 25.6.2003. The employees were exempted from reporting for duty from 25.4.2003 and they were provided with full wages upto the period 25.6.2003. It is the stand of the management that the closure of the unit was not on account of any sinister motive, but purely a commercial decision. Further, after the closure of the factory, the land and building along with plant and machinery have been sold and, therefore, the issue referred for adjudication does not survive for consideration.

8. Upon the reference to the Labour Court, on the side of the workmen, while Exs.P-1 to P-12 were marked, however, no oral evidence was adduced. On the side of the Management, R.W.1 was examined and Exs.R-1 to R-25 were marked. On the materials placed before it, the court below approved the closure of the Management unit as