INDUSTRIAL CHEMICAL LTD Vs. LABOUR COURT

JUDGEMENT

(1.) THESE two writ appeals raise questions of some importance in the application of the law relating to retrenchment of an employee from service.

(2.) THE appellant is a limited company having an office at Madras. The respondent Sankaran was an employee in that office for more than ten years, in 1970, the company discharged Sankaran from service avowedly as a measure of retrenchment. At that time he was one out of four assistants in the office, but not the junior most. When serving the notice of retrenchment, the management gave him one month's notice, pay and retrenchment compensation. But the amount was given by cheque.

(3.) SANKARAN raised an industrial dispute over his retrenchment on reference before the Labour Court he pleaded that there was no warrant whatever for the management to introduce any measure of retrenchment at the material time. The Labour Court rejected this plea on the score that the company had incurred losses in its business in 1969 and there was nothing wrong in its desire to effect economies. Sankaran raised two other contentions based on Sections 25f and 25g of the Industrial Disputes Act, 1947. He urged that the payment of his dues by cheque, instead of in cash, was not in accordance with Section 25f. Characterizing this plea as a technicality the Labour Court rejected it, observing that the mere fact that the cheque could be encashed only on the next day would not render the retrenchment invalid. The Labour Court, however, accepted Sankaran's plea based on Section 25g of the Industrial Disputes Act. It found that in the notice which the management lodged with the State Government, it had given some reasons as to why it picked out Sankaran for retrenchment while retaining in the office persons subsequently employed in the category of assistants. But after examining these reasons, the Labour Court held that they did not afford good grounds under the law for deviating from the principle, "last come, first go". On the basis of this last finding the Labour Court held that Sankaran's retrenchment from service was invalid. Having recorded this finding, the Court, however, did not think that the circumstances of the case warranted the relief by way of reinstatement on the contrary, having regard to the management's loss of confidence in Sankaran and the strained relationship between the parties and in the interest of industrial peace and the smooth working of the office, the Labour Court, in the exercise of its discretion, directed the company to pay Sankaran an additional sum by way of compensation for non-employment over and above that which had been already received by him.