A reference was made by the State Government under Section 4-K of the U.P. Industrial Disputes Act ( hereinafter referred to as 'the Act') on 10.1.2012. The terms of the reference order was, "whether the employers were justified in terminating the services of the workman w.e.f. 8.7.2000 ? If not, to what relief is the workman entitled to ?"

Before the Tribunal, the workman contended that he was appointed in a permanent capacity in the year 1969 and, since then, was working continuously without any break in service and that he was illegally terminated on 8.7.2000 without holding any inquiry and without granting any opportunity of hearing. The workman contended that the unit of the employers factory had closed down illegally without complying with the provisions of Section 6-W of the Act. It was contended that no notice or wages in lieu of notice was paid nor the provisions of Section 6-N of the Act was complied with. The workman contended that no permission was taken by the employers from the State Government for closure of its undertaking and therefore, the provisions of Sections 25-M, 25-N and 25-O of the Industrial Disputes Act ( hereinafter referred to as the 'I.D.Act') was violated as well as the provisions of Sections 6N, 6-P and 6-Q and 6-W of the Act. The workman, accordingly, prayed that he is entitled to be reinstated with continuity of service and with full back wages.

The employers filed a written statement contending that the factory was running in operational losses for several years and it was decided to close down the factory in a phased manner. The management took a decision to close its Head Office and, on that basis, notice was duly served upon 111 workers working in the Head Office, intimating them that the Unit would close down w.e.f. 8.7.2000 and that their services would be terminated as per the provisions of Section 25-FFF of the Industrial Disputes Act. The employers contended that before the Conciliation Officer, it was specifically contended that there has been a valid closure and that it was not a case of illegal termination or retrenchment as defined under Section 2( s) of the Act, read with Section 6-N, but, was a case of closure. The employers contended that the closure was valid and that the validity of the closure could not be looked into by the Tribunal in these proceedings, since no reference with regard to the validity and legality of the closure has been referred. The employer further contended that closure compensation as per the Act was duly given and paid to the workers concerned, which was accepted by the workman. It was also brought to the knowledge of the Tribunal that the M.N.T. unit was closed down irrevocably on 14.12.2000 and the Battery unit was closed down on 3.5.2001.

The workman himself deposed before the Tribunal reiterating the stand which he had taken in the written statement, but, further admitted that he has received the closure compensation as well as the Provident Fund and Gratuity, but, contended that the closure of the factory was wholly illegal and in gross violation of the provisions of Section 6-W of the Act. The employers' witness deposed, that the factory was running in operational losses for several years and that a conscious decision was taken to close various units and departments of the petitioners' Company in a phased manner. It was also stated that a voluntarily retirement scheme was brought into operation, which was not accepted by the workers and consequently, thereafter closure was done on various units of the petitioner's factory in a phased manner and retrenchment compensation as per law was paid to each of the workers

Before the Tribunal, the workman contended that the respondent factory had more than 300 workers and, therefore, it was incumbent upon the employers to seek permission from the State Government before closure of their factory or any unit of their factory, as per Section 6-W of the Act. It was contended that since no permissi