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1989 DIGILAW 133 (BOM)

Hindustan Lever Employees Union v. State of Maharashtra & others

1989-04-26

A.C.AGARWAL

body1989
JUDGMENT - ASHOK GARWAL, J.:---The Hindustan Lever Limited, the second respondent herein, discontinued the manufacture of their product Rin in their Sewri Plant at Bombay with effect from April 1988. The petitioners, the employees Union, have come up with a grievance that this amounts to a closure as contemplated under section 2(c) of the Industrial Disputes Act. Since the Management has not obtained permission under section 25-O to close down they are liable for being prosecuted under section 25-O. The petitioners seek a writ of mandamus directing the State of Maharashtra, the first respondent herein, to prosecute the second respondent and its Chairman for their unlawful closure of the Rin Department. 2. Mr. Singhvi, the learned Advocate appearing in support of the petition, strenuously submitted that though the discontinuance of the manufacture of the product Rin has not brought about retrenchment of the workers, since the workers have been re-employed in other departments, this was a modus operandi which would enable the Management to seek retrenchment at a later date on the ground that the workers have become surplus. He further contended that the Management had transferred the manufacture of Rin from the Sewri Plant to its Plant at Mangalore and Chhindwara where the workers were not as well organized as the petitioners. The Management would thus employ cheaper labour and this would adversely affect the workers in Bombay in the long run. He placed reliance on the definition of the term "Closure" found in section 2(cc) wherein it is provided 'Closure' means the permanent closing down of a place of employment or part thereof. According to him, discontinuance of the manufacture of Rin amounts to permanent closing down of a part of a place of employment. He further placed reliance on the provisions of section 25-O and submitted that before such a closure could be resorted to, an application was required to be made for obtaining permission. Placing reliance on sub-section (2) of section 25-O, he submitted that on such an application being made, the appropriate Government was required to be satisfied that the reasons given for intended closure of the undertaking are adequate and sufficient and are urged in good faith and are fair and just. It is further required to be satisfied that the closure would not be prejudicial to the interest of the general public. It is further required to be satisfied that the closure would not be prejudicial to the interest of the general public. It is only on such satisfaction being reached that permission to close down can be granted. Thus, according to Mr. Singhvi, retrenchment of workmen is not a sine qua non for making an application for permission to close down. Even if there was no retrenchment, permission to close down can adequately be refused if the aforesaid reasons are not satisfied. 3. In my judgment, there is no merit in the aforesaid contentions. Merely because the second respondent has chosen to discontinue the manufacture of one of its products, it cannot be held that it has closed down a part of its undertaking. The Second Respondent is multi-product manufacturing company. It manufactures various products in its Sewri factory. Under Clause 8 of the Standing Orders confirmed by the Industrial Court, the management has been given authority to transfer an employee from one department to another or from one shift to another. This is one of the terms and conditions of service of the employees. I am not impressed by the contention of Mr. Singhvi that a closure which is contemplated under section 25-O need not be related to the retrenchment of workers. Sub-clause (8) of section 25-O provides--- "Where as undertaking is permitted to be closed down under sub-section (2) or where permission for closure is deemed to be granted under sub-section (3), every workman who is employed in that undertaking immediately before the date of application for permission under this section, shall be entitled to receive compensation which shall be equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months". Moreover, Form XXIV-C provides the form of notice for permission of closure to be given by an employer under sub-section (1) of section 25-O of the Industrial Disputes Act, 1947. Paragraph 2 thereof requires the employer to mention the number of workmen whose service will be terminated on account of the closure of the undertaking. Moreover, Form XXIV-C provides the form of notice for permission of closure to be given by an employer under sub-section (1) of section 25-O of the Industrial Disputes Act, 1947. Paragraph 2 thereof requires the employer to mention the number of workmen whose service will be terminated on account of the closure of the undertaking. Paragraph 4 provides for a declaration that in the event of approval for the closure being granted every workman in the undertaking to whom sub-section (7) of the said section 25-O applies will be given notice and paid compensation as specified in section 25-N of the Industrial Disputes Act, 1947, as if a workman has been retrenched under that section. Hence, though in section 25-O there is no specific reference to the retrenchment of workmen, having regard to the scheme of the Act and the provisions enumerated hereinabove, it will have to be held that it is only when a closure of an undertaking brings about retrenchment of workman that the provisions of section 25-O can apply. 4. The apprehension of Mr. Singhvi that the closure of the Rin Department would enable the Management to retrench the workmen at a later date on the ground of the same are surplus is not justified as before such a retrenchment can take place, an application for permission to retrench as provided in section 25-N will have to be made. In case such an application is made and it is found that the surplus of the workmen have been the result of the closure of the manufacture of the product Rin, the petitioners would be justified in resisting this application inasmuch as the second Respondent in its affidavit has unequivocally stated that none of the Sewri factory has been adversely affected by any decision of Respondent workmen of the No. 2 inasmuch as no employee has been retrenched or terminated by the Company. I have no doubt that in case it is found that surplus of the workmen has been brought about and is the result of discontinuance of the product Rin, the appropriate Government would take into account the said factor while deciding the application under section 26-N of the Act. 5. As observed in the case of (Parry Company)1, reported in (1970)II L.L.J. 429, the management has a right to re-organise its work in the manner it pleases. 5. As observed in the case of (Parry Company)1, reported in (1970)II L.L.J. 429, the management has a right to re-organise its work in the manner it pleases. The second Respondent, at one point of time, contemplated the manufacture of Rin in 250 gms, cake in place of its 125 gms, cake. The petitioners had, according to the Management, objected, which fact is disputed by Mr. Singhvi. They decided to shift the manufacture of Rin from their Unit at Sewri to their other Units in the country. These are exigencies of the trade. I fail to see how the employees can be heard to oppose such a move. Moreover, the manufacture of Rin has been discontinued way back in April 1988 and the present writ petition has been filed on the 15th February, 1989. 6. In my view, apart from the petition being devoid of any merit, the same suffers from the voice of laches. Hence the same is rejected summarily. Petition rejected. ------