Back
SUPREME COURT OF INDIA
G.K.Mitter : J.M.Shelat
Ramakrishna Ramnath
Versus
Presiding Officer.Labour Court, Nagpur
Case No. : 1185 of 1966
Date of Decision : 2/27/70
Industrial Disputes Act – Sections 33, 25 – Minimum Wages Act – Section 5 – Jurisdiction of Labour court – Challenged – Closure of Firm – In this appeal by special leave appellant challenges jurisdiction of Labour court to adjudicate upon dispute referred to it and also contends that finding of that court that there was a closure of appellants factory in circumstances of case was a perverse one which ought not to be upheld.– Appellant is a partnership firm carrying on the manufacture and sale of Bidis at various places in the Vidarbha region of the State of Maharashtra and other places including Nagpur. – It employed 4000 men in its factories. – On issue of a notification by government of Bombay under Section 5(2) read with Section 5(1)(b) of Minimum Wages Act. –Appellant "felt that situation created by notification was such that working of factories had become a financial impossibility. – It issued a notice in writing, sending copies thereof to Assistant Labour Commissioner, Labour Officer, and the secretary of recognised trade union styled notice of closure – Held, In Court’s opinion the issue had been properly framed. – Section 25-FFF lays down that in order that a workman may claim benefit of provision he must establish that he has been in continuous service for not less than one year in that undertaking immediately before closure. – As soon as this is done he becomes entitled to notice and compensation in accordance with provisions of Section 25-F as if he had been retrenched subject to provisions of sub- section (2). – Ss. (2) of Section 25-FFF is not applicable to this case. – Section 25-F(b) lays down that a workman cannot be retrenched unless he had been paid compensation equivalent to 15 days average pay for every completed year of service or any part thereof in excess of six months. – Further no such workman can claim the benefit of the provision for compensation unless he can show that he has been in continuous service for not less than one year under employer. – Under Section 25-B a workman who during period of 12 calen- dar months has actually worked in an industry for not less than 240 days is to be deemed to have completed one years service in industry. – Consequently an enquiry has to be made to find out whether workman, has actually worked for not less than 240 days during a period of 12 calendar months immediately preceding retrenchment. – These provisions of law do not show that a work- man after satisfying test under Section 25-B has further to show that he has worked during all the period he has been in service of the employer for 240 days in the year. – However compensation to be paid to workman under clause (b) of Section 25-F is not to exceed his average pay for three months. – In case of respondent it was found by Labour court that she had worked for eight years and but for proviso to Section 25-F she would have been entitled to four months pay. – Appeal Dismissed
G.K.MITTER, J.
(1) IN this appeal by special leave the appellant challenges the jurisdiction of the Labour court to adjudicate upon the dispute referred to it and also contends that the finding of that court that there was a closure of the appellants factory in the circumstances of the case was a perverse one which ought not to be upheld. The third and the last submission put forward was that the Labour court had gone wrong in its interpretation of the relevant provisions of the Industrial Disputes Act as they stood at the time of the reference.
(2) THE amount in stake in this appeal is quite an insignificant one but the appeal has been brought as a test case for a number of other similar disputes.
(3) THE appellant is a partnership firm carrying on the manufacture and sale of Bidis at various places in the Vidarbha region of the State of Maharashtra and other places including Nagpur. It employed 4000 men in its factories. On the issue of a notification by the government of Bombay dated 11/06/1958 under Section 5(2) read with Section 5(1)(b) of the Minimum Wages Act. 1948 the appellant "felt that the situation created by the notification was such that the working of the factories had become a financial impossibility. On 1/07/1958 it issued a notice in writing, sending copies thereof to the Assistant Labour Commissioner, Nagpur, the Labour Officer, Nagpur, and the secretary of the recognised trade union styled "notice of closure". The relevant portion of this reads as follows :
"AS per standing order approved by Labour Commissioner Para- graph 11 and also under general power of the employer to close down the business, we beg to inform you that it is our intention to close down our Bidi factory and anywhere outside the factory as far as from 1/07/1958.
WE have been forced to take this step by the action of the Bombay Government in issuing a notification dated 11/06/1958. .......
THE minimum rate/rates of wages made payable as from 1/07/1958 are so excessive and unworkable that it is impossible for any employer to give effect to them. This is so particularly in relation to Clause 6 of the notification. Thus the changes introduced by the notification. ....... regarding wages, chhat and other matters are such as to attract the provisions of Clause 11 of the Standing Orders.
FURTHER the employers have under the peculiar circumstances created by the aforesaid notification a right to close the business the working of which has become, .........a financial impossibility.
WE hereby therefore further wish to inform you that the aforesaid closure of the Bidi-making business of the firm will continue as long as the notification dated 11/06/1958 continues in force."
(4) WHATEVER be the reason the government notification was withdrawn within space of a few weeks and the appellant started to work its factories once more from 10th August, 1958 taking in all its employees who were there before 1/07/1958. The respondent in this case who was a Bidi binder earning at Rs. 1.86 per day on an average made an application to the Presiding Officer, Labour court at Nagpur, on 5/11/1963 claiming Rs. 334-80 on account of retrenchment and one months notice pay in lieu of notice. She stated that the factory was closed as from 1/07/1958 as a result of which she and other workers had been retrenched. As she had put in 12 years of continuous service before the said date, she claimed computation of the benefit in terms of money under Section 33-C(2) of the Industrial Dispules Act (hereinafter referred to as the Act).
(5) THE appellant put in its written statement on 25/09/1963 which was later amended on 2/03/1964. It raised various contentions both of fail and of law. urging, inter alia, that the applicant was not an employee but an independent contractor, that there had been no closure
1. Does the applicant prove that she had been in continuous service of the opponent for not less than one ye
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
