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2018 Supreme(P&H) 4334
IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH
Rajiv Narain Raina, J.
Endurance Technologies Ltd. - Appellant
Versus
State Of Haryana - Respondent
CWP No. 22351 of 2018 (O&M)
Decided On : 18-12-2018
Gurminder Singh, Sr. Advocate with Ashwani Talwar and Ms. Harpriya Khaneka, Advocates, for the Petitioner; G.S. Wasu, Addl. AG, Haryana, for the Respondent; O.P. Sharma and Vishal Sharma, Advocates, for the Union-Respondent No. 3
The court quashed the application of Chapter VB of the Industrial Disputes Act, 1947 to the closure of an industrial establishment, citing lack of independent application of mind, breach of natural justice, and failure to consider the statement of reasons presented by both sides.
Headnote:
{'KEYWORD': 'Industrial Disputes Act', 'SUBJECT': 'Closure of Industrial Establishment', 'ACT SECTION LIST': 'Chapter VB, Section 25-K, Section 25-L, Section 25-N, Section 25-O, Section 25-Q, Section 25-R, Section 25-S, Haryana Amendment Act No.31 of 2016', 'SUMMARY': "The case involves the application of Chapter VB of the Industrial Disputes Act, 1947 to the closure of an industrial establishment. The petitioner, an industrial establishment employing less than 300 workers, sought permission to close its unit. The workers' union opposed the closure, alleging that the management was transferring business to another plant. The impugned notification, issued by the State Government, applied Chapter VB to the petitioner's establishment, citing the likelihood of disturbance of industrial peace. The court quashed the notification, citing lack of independent application of mind, breach of natural justice, and failure to consider the statement of reasons presented by both sides. The court also directed the management to renegotiate compensation packages, consider offering alternative employment, and appointed the Assistant Labour Commissioner to oversee negotiations and report on the closure's genuineness.", 'FACT OF THE CASE': "The petitioner, an industrial establishment, sought permission to close its unit. The workers' union opposed the closure, alleging that the management was transferring business to another plant.", 'FINDING OF THE COURT': "The court quashed the impugned notification, citing lack of independent application of mind, breach of natural justice, and failure to consider the statement of reasons presented by both sides. The court also directed the management to renegotiate compensation packages, consider offering alternative employment, and appointed the Assistant Labour Commissioner to oversee negotiations and report on the closure's genuineness.", 'ISSUES': 'The issues included whether the closure was a genuine transfer/relocation of business, whether contract workers should be included in the count of workers, and whether the closure was a ploy to get rid of workers.', 'RATIO DECIDENDI': "The court found that the impugned notification lacked independent application of mind, breached natural justice, and failed to consider the statement of reasons presented by both sides. The court also directed the management to renegotiate compensation packages, consider offering alternative employment, and appointed the Assistant Labour Commissioner to oversee negotiations and report on the closure's genuineness.", 'FINAL DECISION': "The impugned notification was quashed, and the court issued directions for the management to renegotiate compensation packages, consider offering alternative employment, and appointed the Assistant Labour Commissioner to oversee negotiations and report on the closure's genuineness."}
JUDGMENT
Rajiv Narain Raina, J. - Chapter VB containing Sections 25-K to 25-S of the Industrial Disputes Act, 1947 was added by Parliament Act 32 of 1976 w.e.f. March 05, 1976. The Chapter deals with special provisions relating to lay off, retrenchment and closure in certain establishments. Section 25 K reads as follows:-
"25K. Application of Chapter V-B.- (1) The provisions of this Chapter shall apply to an industrial establishment (not being an establishment of a seasonal character or in which work is performed only intermittently) in which not less than [one hundred] workmen were employed on an average per working day for the preceding twelve months.
(2) If a question arises whether an industrial establishment is of a seasonal character or whether work is performed therein only intermittently, the decision of the appropriate Government thereon shall be final.
2. The words "one hundred" were substituted by Act 46 of 1982 for "three hundred" w.e.f. August 21, 1984. Section 25-L contains definitions for the purposes of Chapter VB of the Industrial Disputes Act, 1947 (for short the "1947 Act"). An 'industrial establishment' means a factory as defined in Clause (m) of section 2 of the Factories Act, 1948. The petitioner is a factory and industrial establishment. The relevant provisions of Chapter VB for the purposes of decision in this case are to start with Section 25 N which prescribes conditions precedent to retrenchment of workmen. The provision is enacted as follows:-
"25N. Conditions precedent to retrenchment of workmen.- (1) No workman employed in any industrial establishment to which this Chapter applies, who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until,-
(a) the workman has been given three months' notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of notice; and (b) the prior permission of the appropriate Government or such authority as may be specified by that Government by notification in the Official Gazette (hereafter in this section referred to as the specified authority) has been obtained on an application made in this behalf.
(2) An application for permission under sub-section (1) shall be made by the employer in the prescribed manner stating clearly the reasons for the intended retrenchment and a copy of such application shall also be served simultaneously on the workmen concerned in the prescribed manner.
(3) Where an application for permission under subsection (1) has been made, the appropriate Government or the specified authority, after making such enquiry as it thinks fit and after giving a reasonable opportunity of being heard to the employer, the workmen concerned and the person interested in such retrenchment, may, having regard to the genuineness and adequacy of the reasons stated by the employer, the interests of the workmen and all other relevant factors, by order and for reasons to be recorded in writing, grant or refuse to grant such permission and a copy of such order shall be communicated to the employer and the workmen.
(4) Where an application for permission has been made under sub-section (1) and the appropriate Government or the specified authority does not communicate the order granting or refusing to grant permission to the employer within a period of sixty days from the date on which such application is made, the permission applied for shall be deemed to have been granted on the expiration of the said period of sixty days.
(5) An order of the appropriate Government or the specified authority granting or refusing to grant permission shall, subject to the provisions of subsection (6), be final and binding on all the parties concerned and shall remain in force for one year from the date of such order.
(6) The appropriate Government or the specified authority may, either on its own motion or on the applic
