AURO ENGG PVT LTD Vs. R A GADEKAR

JUDGEMENT

(1.) THIS petition impugns an Order of the Industrial Court, Nasik, dated July 31, 1989, made in complaints (ULP) Nos. 741 to 744 of 1987 under the provisions of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (hereinafter referred to as "the Act" ).

(2.) THE petitioner is an employee in the Engineering Industry. The respondents 2, 3, 4, and 5 were employed as fitters in the factory of the petitioner. The petitioner had a total complement of 37 workmen at all material times. From 1st of April, 1987, the petitioner laid off some of the workmen intermittently. The workmen laid off included respondents 2 to 5. The lay-off was on account of the financial difficulty of the petitioner which continued unabated despite the lay-off. On September 8, 1987 respondents 2 to 5 were told by the financial situation of the petitioner-company was getting worse, and, since the lay-of resorted to had not made any discernible improvement in the situation, the petitioner was left with no recourse but to retrench the workmen. Respondents 2 to 5 were the workmen who were to be retrenched. There is some dispute as to whether the retrenchment actually took place on September 8, 1947 itself. This controversy, however is irrelevant inasmuch as it is admitted that, by letters dated September 9, 1987 dispatched by Registered A. D. Post, the petitioner terminated the services of respondents 2 to 5 by way of retrenchment for reasons specifically stated therein. It is also not disputed that, along with each such letter, the petitioner had enclosed bank drafts of what were alleged to be the amounts payable by way of one month's salary in lieu of notice, retrenchment compensation, gratuity and salary for balance of earned wages for the month of August. We are not concerned, in the present petition, with the other amounts, except the retrenchment compensation. Retrenchment compensation was calculated by the petitioner on the basis of the salary that was payable for the month of July, 1987. The petitioner deducted therefrom the amount which had been paid to each of the four workmen as lay-off compensation for the period of the lay-off. On this basis, certain amounts were enclosed by bank drafts along with the letter addressed to each of the four workmen on September 9, 1987. It is not in dispute that each of these four workmen (respondents 2 to 5) received the said letter, together with the accompanying bank draft on september 16, 1987. Each one of them encashed the bank draft thereafter. On September 17, 1987, respondents 2 to 5 filed Complaints (ULP) Nos. 741 to 744 of 1987 before the Industrial court. Nasik, alleging interalia, therein that the petitioner had engaged in unfair labour practice under item 9 of Schedule IV of the Act. The basic of the complaints was that the retrenchment effected by the petitioner was contrary to the provisions of Section 25f of the Industrial Disputes act, inasmuch as (a) the employer had illegally deducted from the amount of retrenchment compensation payable the amount paid as lay-off compensation for the period of lay-off and (b)the employer had wrongly calculated the retrenchment compensation payable under the statute by not taking into account the annual increment of Rs. 75/- which was payable to each of the four workmen concerned with effect from August 1, 1987. The petitioner contested the complaints, and denied that the retrenchment had been effected on September 8, 1987, as alleged. It pointed out that, though the Manager of the factory had attempted to serve the orders of retrenchment on September 8, 1987, each of the four concerned workmen had refused to accept the same, and, consequently, the said orders had been dispatched on September 9, 1987 accompanied by the statutory dues payable in accordance with Section 25f of the Industrial disputes Act and other provisions of law. The petitioner also contended that there was an agreement dated April 2, 1987, between itself and all its workmen, under which it was agreed that the workmen would be laid off and paid compensation at the rate of 50% of their total wages for the period of the lay-off, and further that, in the event of any workman resigning his service or being retrenched by the petitioner, the amount paid towards lay-off would be set off from the compensation payable at the time of retrenchment. However, the employer did not plead anything on the issue as to whether the retrenchment compensation had been calculated by including the annual increment which became due and payable to workmen from August 1, 1987.

(3.) THE Industrial Court held the retrenchment to be illegal on both counts. First, it held that the retrenchment was contrary to Section 25-F of the Industrial Disputes Act, inasmuch as the amount of compensation had been wrongly calculated by not including in the overall pay the amount of increment which was due and payable to the workmen as on August 1, 1987. Secondly, it held that the retrenchment was illegal because the retrenchment had been effected on September 8, 1947 itself, without making any payment, as contemplated by Section 25-F of the Industrial Disputes Act, 1947. On all other points, it overruled the contentions of the workmen and held in favour of the petitioner. As a consequence of its reasoning, the Industrial court, following the judgment of the Supreme Court in S. G. Chemicals and Dyes Trading employees' Union and S. G. Chemicals and Dyes Trading Ltd. and another, (1986-I-LLJ-490), took the view that contravention of the provisions of the statute, which must be held to be part and parcel of the employment connect, amounted to breach of the employment contract itself, and therefore, there was unfair labour practice within the meaning of item 9 of Schedule IV of the Act. The Industrial Court was, however, satisfied that the factory of the petitioner had been closed with effect from December 17, 1988 and, therefore, there was no question of granting any relief for the period subsequent thereto. Consequently, the Industrial Court set aside the orders of retrenchment against the respondents 2 to 5, and held that they were entitled to full back wages for the period from September 8, 1947 till December 17, 1988. It is these orders of the Industrial court which have been impugned in the present petition.