R RAMACHANDRAN; K MURTHY; R RAVI; K R MURTHY; B MANOHARAN; B HALDORAI; K RAMAN AND L SINGARAN Vs. MANAGEMENT OF KINNAKORAI, INDUSTRIAL CO-OPERATIVE TEA FACTORY LIMITED REPRESENTED BY SPECIAL OFFICER, KINNAKORAI, VIA KUNDHA, NILGIRIS

JUDGEMENT

(1.) The writ petitioners are employees of the respondent Co-operative Tea Factory. All of them have put in about 10 to 15 years of service. According to the petitioners, they have been in continuous service for over 10 years without any break and are confirmed employees. On 20.2.2002 the management displayed a notice in the Factory Notice Board proposing to retrench them from service with effect from 1.3.2002. According to them, there was no justification for the proposed retrenchment. The proposed retrenchment was also in violation of the principle of "last come first go" as several juniors of the petitioners are allowed to remain in service while the petitioners being seniors have been singled out for retrenchment. The petitioners were constrained to raise an Industrial Dispute before the Labour Officer at Udhagamandalam on 22.2.2002 and hearings were posted on 12.3.2002. The respondent had also received the notice issued by the Labour Officer. It is further stated that considering the tendency of the Industrial Dispute the respondent was required to maintain status quo. But the respondent was trying to alter the status quo by giving effect to the impugned retrenchment notice and proposing to retrench the petitioner, with effect from 1.3.2002. It is further stated that as the Industrial Dispute was pending, the management is bound to maintain status quo. It is further contended that the notice is also violative of Section 25F and 25G of the Industrial Disputes Act.

(2.) In the counter filed by the respondent/Society the respondent has furnished the service particulars of each of the petitioners. It is further stated that all the seven petitioners except the fourth petitioner, have rendered continued service for more than 10 years. But their services were not confirmed by the respondent and no orders were issued confirming their services. Therefore, the contention that the petitioners were confirmed employees was contrary to the truth.

(3.) The respondent further submits that they had implemented the recommendations of the V Pay Commission in the context of the revision of Pay Scales. However, with effect from 1.4.1999 the respondent incurred heavy loss month after month. The factory was also not running to full capacity and utilisation. With the result, the cumulative loss as on 28.02.2002 was about 1.02 crores. Therefore, the respondent is facing increased economic and financial burden. 30 to 70 per cent of total cost of production was being spent on establishment and contingencies and therefore, the present financial condition warranted immediate action plan to curtail the various over-heads. Urgent measures had to be taken to overcome the financial crisis which if not avoided would lead to the closure of the factory. Therefore, an action plan was drawn to put the factory on a profit basis by adopting several proposals which included abolition of 11 posts among the total cadre of 23 employees as they were found to be surplus. Before taking such decision, in fact the Board has explored other alternatives such as diversion of staff to other sister concern, to receive financial assistance eligible to sick units, implementing Voluntary Retirement Scheme, option to continue from revised scale of pay etc. But none of the proposals yielded any positive results. Therefore, the management was forced to take the decision of abolition of 11 posts as laid down under the Act and Rules. The financial requirements of the establishment deserves vital consideration and abolition of posts was intended to reduce the economic burden. There is no basis for the contention of the petitioners that such action was based on any vindictive reasons. The statutory requirements to be complied with before effecting retrenchment are provided under Sections 25F and 25G and Rule 62 of the Industrial Disputes Rules 1958. The said requirements have been strictly complied with and a notice in the prescribed manner had been served on the Commissioner of Labour, Chennai, Labour Officer, Udhagamandaam and all the statutory requirements have been duly complied with. The choice of the personnel was also based on the seniority of all the employees in each category. The list was also sent to the respective Unions. Therefore, the contention that there was violation of principles of natural justice or that there was violation of "last come first go" have no basis at all. With the result, respondent contends that there is no basis to sustain the writ as prayed for by the petitioners.