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2015 DIGILAW 456 (KAR)

T. Venkatesh v. Bangalore Turf Club Ltd.

2015-04-20

ASHOK B.HINCHIGERI

body2015
ORDER : Ashok B. Hinchigeri, J. 1. Both the batches of writ petitions are filed raising the challenge to the common award, dated 17.3.2010 passed by the Principal Labour Court in I.D. No. 10/2002 c/w I.D. Nos. 11 to 18/2002. 2. W.P. Nos. 28534-28542/2010 are filed by the workmen. W.P. Nos. 1492-1500/2011 are filed by the Management. 3. The facts of the case in brief are that the services of the workmen were terminated with effect from 16.9.2001 on the closure of the press section and vehicle section in Bangalore Turf Club Limited ('BTC for short). The workmen raised the dispute invoking Section 10(4A) of the Industrial Disputes Act, 1947 ('ID Act' for short). The Labour Court, by its award, dated 24.2.2004 allowed the petitions in part by directing the Management to pay to the workmen the benefits under the Voluntary Retirement Scheme ('VRS' for short) with interest at 10% per annum from the date of the petition till the date of payment. The said award was challenged by the workmen in W.P. No. 19417/2004 and by the Management in W.P. No. 27454/2004. The learned Single Judge clubbed the two cases and passed the common order, dated 5.9.2009 modifying the Labour Court's award. The learned Single Judge quashed the direction for the payment of interest but directed the payment of the VRS benefits to each of the petitioning workmen, as offered to its other employees under VRS 2004 by notionally reckoning the length of service till such date only for that purpose. The Management was directed to notionally treat the workmen, as if they had continued in service as on the date of the VRS 2004. 4. The aforesaid order of the learned Single Judge was challenged by the workmen by filing W.A. Nos. 376-380/2009 and by the Management by filing W.A. Nos. 304-312/2009. The Division Bench, by its judgment, dated 11.11.2009 disposed of the said appeals as follows: "5. In this view of the matter, it would be suffice for us to set aside the award passed by the Labour Court and remand the matter to the labour court permitting the parties to adduce evidence in respect of the alleged sham closure of the department, the services of the concerned workmen of the dispute are terminated and in their place, the other persons and employed by falsely stating that there is sham contract of employment. Therefore, the Labour Court is directed to permit both the parties to adduce evidence in this regard and record a finding on this disputed question of fact and pass appropriate award with regard to the dispute raised by the workmen. Pursuant to the common order of the learned Single Judge the VRS benefit already paid to the workmen, the same will be subject to result of the award that would be passed by the Labour Court. The Labour Court is directed to conduct an enquiry as indicated above and pass the award within three months from the date of receipt of a copy of this order after affording opportunity to both the parties." 5. Pursuant to the aforesaid judgment, the Labour Court passed the award on 17.3.2010 by directing the Management to pay the benefits as per VRS 2004 by notionally treating that they have continued in service as on the date of the VRS 2004. It is this award, which is challenged by both the workmen and the Management. 6. Sri Narayan Bhat, the learned counsel for the petitioner in W.P. No. 28534-542/2010 submits that the respondent employer has violated the rule of 'last come first go'. He submits that the respondent has not even maintained the seniority list of workmen as required under Rule 78 of the Industrial Disputes (Karnataka) Rules, 1957. He submits that the workmen junior to the petitioners are retained and continued in the services of the respondent. 7. He relies on the Apex Court's judgment in the case of Samishta Dube v. City Board, Etawah and Another, reported in AIR 1999 SC 1056 . Head Note (B) read out by him is as follows:-- "(B) U.P. Industrial Disputes Act (28 of 1947), Ss. 6-P, 6-N-Retrenchment - Rule of last come, first go - Applies even to a daily wager- S. 6-P which prescribes this rule of seniority does not require any particular period of continuous service as required by S. 6-N-Order of Labour Court directing Municipal Board to reappoint a daily wager clerk in case any person junior to him has been retained - Is proper." 8. Sri Bhat has also relied on the Apex Court's judgment in the case of Harjinder Singh v. Punjab State Warehousing Corporation reported in AIR 2010 SC 1116 , wherein it is held that in a case where the challenge is raised to the retrenchment on the ground of violation of 'last come first go' rule, the workman is not required to prove that he had worked for a period of 240 days during twelve calendar months preceding the termination of his services. 9. He complains of the violation of Section 25-F of the I.D. Act. He submits that the petitioners were not put on the notice of retrenchment and therefore the impugned action of the respondent is violative of Section 25-F of the I.D. Act. He relies on the Apex Court's judgment in the case of Anoop Sharma v. Executive Engineer, Public Health Division No. 1, Panipat (Haryana) reported in : (2010) 5 SCC 497 , wherein it is held that the effect of non-compliance with the requirements of Section 25-F renders the retrenchment a nullity in the eyes of law. 10. The learned counsel brings to my notice that the respondent is labouring under the impression that what is done by it is not retrenchment and that it is only a closure and that that is why the petitioners are entitled to closure compensation only. He also brings to my notice the relevant portion of paragraph No. 27 of the counter statement filed by the respondent in I.D. No. 15/2002. It is extracted hereinbelow:-- "27. Regarding Para-7:-.............The allegation of unfair labour practice and victimization, are hereby denied. The action of the Management in terminating the services of the first party consequent to closure is not a retrenchment. Hence Section 25-F of ID. Act is not attracted. The workman is entitled to Closure Compensation which is equivalent to the compensation contemplated under Section 25-F of the Act........." 11. The learned counsel submits that the respondent cannot contend with any rate of success that what is done to the petitioners is not the retrenchment at all. As per the definition of retrenchment in Section 2(oo) of the I.D. Act, only four categories of the employment are placed outside the ambit of retrenchment and the present case does not fall within any of the four enumerated categories. As per the definition of retrenchment in Section 2(oo) of the I.D. Act, only four categories of the employment are placed outside the ambit of retrenchment and the present case does not fall within any of the four enumerated categories. Section 2(oo) of the I.D. Act reads as follows:-- "2(oo).--"Retrenchment" means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include- (a) voluntary retirement of the workman; or (b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf or [(bb) termination of the service of the workman as a result of the non-renewal of the contract of employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or] (c) termination of the service of a workman on the ground of continued ill-health;]." 12. He also brings to my notice the Apex Court's decision in the case of Punjab Land Development and Reclamation Corporation Ltd., Chandigarh v. Presiding Officer, Labour Court, Chandigarh and Others reported in (1990) 3 SCC 682 , wherein it is held that 'retrenchment' means termination by the employer of the service of a workman for any reason whatsoever except those expressly excluded in Section 2(oo) of the I.D. Act. 13. Nextly, Sri Bhat contends that the respondent has given the marching orders to the petitioners only to resort to outsourcing and to take as many as 70 contract labourers. He submits that as per the requirement of Section 25-H of the I.D. Act, the retrenched persons are required to be re-employed, should the work crop up again. 14. He submits that none of the petitioners have sought the transfer to printing section or vehicle section. The respondent has transferred them to the said sections and closed the said sections, but only to be reopened by taking the contract labourers. He submits that this is clearly a case of unfair labour practice, as per Section 2(ra) of the I.D. Act. He submits that one of the petitioners, namely, Rama S. Naik was working in the Stores Department for ten years. Thereafter, he is transferred to vehicle section and asked to leave the organisation. 15. He submits that this is clearly a case of unfair labour practice, as per Section 2(ra) of the I.D. Act. He submits that one of the petitioners, namely, Rama S. Naik was working in the Stores Department for ten years. Thereafter, he is transferred to vehicle section and asked to leave the organisation. 15. With reference to Chapter V-B of the I.D. Act, it is his submission that the respondent has more than 100 workmen on its rolls and therefore the special provisions governing the retrenchment in the respondent organization as found in Chapter V-B are applicable to the case on hand. 16. Sri Bhat submits that under Section 25N(b), the retrenchment could not have been effected without obtaining the prior permission of the State Government. He submits that the respondent has not even made an application seeking prior permission of the State Government to close down its undertaking. He would therefore complain of the violation of Section 25-O of the said Act. 17. Sri Bhat relying on the latest Apex Court's judgment in the case of Mackinon Mackenzie and Company Ltd. v. Mackinnon Employees Union reported in 2015-II-LLJ-151 (SC) submits that the principle of 'last come first go' should be strictly adhered to even when only some sections of an undertaking are being closed down. 18. The learned counsel submits that the Labour Court has held that there is no contravention of Sections 25(F), G, H, N, O) without verifying the materials placed on its record and consequently without examining the requirements of the said Sections. 19. Sri Subramanya, the learned counsel appearing for the respondent submits that the jural relationship of employer and employee would stand terminated once the employee seeks the voluntary retirement. He submits that the benefits of the voluntary retirement scheme are already disbursed to the petitioning workmen. 20. The learned counsel brings to my notice what one of the petitioners has admitted in the course of his cross-examination. WW1 has admitted that the Management has closed the press and vehicle sections on 16.9.2001, as they were not economically viable. WW1 has also admitted that the press section could not function, as it was left with only one employee, namely, G. Kumaravelu. He has also admitted that the Management has not restarted the vehicle and press sections. Further, he admits that the Management has not made any appointment of mechanics, helpers and auto electricians, etc. WW1 has also admitted that the press section could not function, as it was left with only one employee, namely, G. Kumaravelu. He has also admitted that the Management has not restarted the vehicle and press sections. Further, he admits that the Management has not made any appointment of mechanics, helpers and auto electricians, etc. to its vehicle section after its closure. He submits that the workman (WW1) has himself admitted that the closed sections are not restarted. 21. The learned counsel submits that once the closure as such is established, the motives for the closure cannot be gone into. He submits that the buildings earlier housing the vehicle and press sections are demolished and that in their place, new buildings are erected for housing the dispensary and ticket counter. He submits that the closure of the said sections is a reality and not pretence. He submits that the applicable statutory provisions in the instant case are Section 25-FFF and not Sections 2(oo) and 25-F of the I.D. Act. He submits that all the requirements for effecting the closure are complied with. He submits that the Exhibits M-73 to M-114 are the cheques, unserved postal envelopes, etc. for having sent the closure compensation to the petitioning workmen. 22. Sri Subramanya refers to the Apex Court's judgment in the case of M/s. Indian Hume Pipe Co. Ltd. v. Their Workmen reported in AIR 1968 SC 1002 to advance the submission that the Industrial Tribunals cannot enquire into the motive to find out whether the closure is bona fide or malafide. It is further held therein that there might be more than one motive working in the mind of the employer leading him to close his establishment. It is not for the Industrial Tribunal to examine that question and decide on the bonafides of the motive. 23. He also relies on the Apex Court's judgment in the cases of Tatanagar Foundry Company Ltd. v. Their Workmen reported in 1970 (1) LLJ 348 and Workmen of Indian Leaf Tobacco Development Company Ltd., Guntur v. Indian Leaf Tobacco Development Company Ltd., Guntur reported in 1970 (1) LLJ 343, wherein it is held that the Industrial Tribunal has no jurisdiction to go into the question as to whether the closure could have been avoided. He submits that the workmen in question cannot seek the re-employment or re-instatement, as there is no business for which they were required. 24. He sought to draw support from the Apex Court's judgment in the case of Isha Steel Treatment, Bombay v. Association of Engineering Workers, Bombay and Others reported in 1987 (1) LLJ 427 for contending that the principle of 'last come first go' has no application in the case of genuine closure and further to contend it is not necessary that in order to effect closure of business, the Management should close down all the branches of its business. 25. He relies on the Apex Court's judgment in the case of Hotel Ambassador v. Its Workmen and Others reported in 1963 (3) LLJ 87. He submits that the ratio laid down in the said reported case is that it is open to the employer to effect the economy measure in closing down some departments and that in such a situation the retrenched workmen cannot contend with any rate of success that some other employee ought to have been retrenched. 26. He has also relied on this Court's decision in the case of Systems Manufacturing Ltd. v. Systems Employees' Association reported in 2001 (2) LLJ 112 to advance the contention that it is no more permissible for anybody to hold that because of the change of circumstances found by the Management to be favourable, if the industrial activities are revived, the closure declared earlier for good and bona fide reasons, has to be held as malafide and as such non est in the eye of law. He relies on the Apex Court's judgment in the case of M/s. Maruti Udyog Ltd., v. Ram Lal and Others reported in AIR 2005 SC 851 and contends that no additional benefits can be doled out to the workmen by way of sympathy, as sympathy has no role to play in applying the provisions of a statute. He therefore submits that the direction for giving the benefits as per 2004 scheme in respect of the petitioning workmen, who are retrenched in 2001, is not tenable. He has also relied on the Apex Court's judgment in the case of Management of Gordon Woodroffe Agencies (P) Ltd. v. P.O., Principal Labour Court and Others reported in 2004 (3) LLJ 539 in that regard. He has also relied on the Apex Court's judgment in the case of Management of Gordon Woodroffe Agencies (P) Ltd. v. P.O., Principal Labour Court and Others reported in 2004 (3) LLJ 539 in that regard. He also relies on the Apex Court's judgment in the case of Managing Director, Karnataka Forest Development Corporation Ltd. v. Workmen of Karnataka Pulpwood Ltd. and Others reported in 2008 (1) LLJ 880 and submits that the only right of the workman is to receive the compensation amount in case of retrenchment. 27. He relies on the Apex Court's judgment in the case of Bangalore Turf Club Ltd. v. Regional Director, Employees State Insurance Corporation reported in AIR 2015 SC 221 for advancing the submission that the respondent organization is a shop and not an industrial establishment or a factory. 28. In the course of rejoinder Sri Bhat, the learned counsel for the petitioning workmen submits that an organization may be a shop for some purpose under a statute and it may simultaneously be an industry for some purpose under another statute. He submits that an organization can be partially a shop and partially an industry. 29. The submissions of the learned counsel have received my thoughtful consideration. The scope of enquiry in the remanded matter is limited by what the Division Bench has specified. The perusal of the Division Bench's judgment shows that the matter was remanded to the Labour Court for the purpose of ascertaining whether the closure of the departments is sham and whether the services of the workmen were terminated and other persons came to be appointed by creating a sham contract of employment. The learned Single Judge's order for giving the benefit of 2004 VRS was held to be subject to the result of the award, which was to be passed by the Labour Court. Therefore, in the second round of litigation in the proceedings under Article 227 of the Constitution of India, the examination has to be confined only to one aspect and that is whether the Labour Court has disposed of the remanded matter in the letter and spirit of the Division Bench's judgment. Viewed in this perspective, the following three questions fall for my consideration: "(i) Whether the closure of the press section and vehicle section is sham or bonafide? Viewed in this perspective, the following three questions fall for my consideration: "(i) Whether the closure of the press section and vehicle section is sham or bonafide? (ii) Whether the Management has employed fresh personnel in the places of petitioners by creating a sham contract of employment? (iii) Whether the Labour Court is justified in giving the benefits of VRS 2004 even when the services of the workmen were terminated in 2001 itself?" In Re. Question No. (i) 30. The Management announced the VRS on 4.2.2001. As many as 47 of its employees accepted the VRS. In the press section, there were 15 workmen. Out of them 14 accepted the VRS. Only one person did not accept the VRS. In the vehicle section there were 14 workmen. 6 out of them including the three drivers opted for the VRS. The said sections were ultimately closed on 16.9.2001. The materials placed on record would disclose that the Management had taken the steps to make the establishment financially stable by first introducing the VRS to all its employees while identifying on facts and figures and later closing down the two sections which were not economically viable. 31. It is also necessary to advert to what WW1 has admitted: "It is true to suggest that the Management has closed press and vehicle section on 16.9.2001 as economically not viable. It is true to suggest that on that ground the Management has terminated me and other 7 workmen in vehicle section and Kumaravelu from press section. It is true to suggest that after the said termination there are no workers remaining in both the sections." 32. Thus the perusal of the oral and documentary evidence indicates that the closure of the press section and vehicle section is bonafide. The question No. (r) is answered accordingly. In Re. Question No. (ii) 33. To answer this question it is necessary to consider what WW1 has deposed, which is as follows: "It is true to suggest that after our termination, the Management has not appointed any person as permanent employee as Junior Assistant cadre...........The Management has not made appointments of mechanics, helpers, auto electricians to the vehicle section after its closure." 34. To answer this question it is necessary to consider what WW1 has deposed, which is as follows: "It is true to suggest that after our termination, the Management has not appointed any person as permanent employee as Junior Assistant cadre...........The Management has not made appointments of mechanics, helpers, auto electricians to the vehicle section after its closure." 34. When the two sections are closed, no appointments are made and the two sections are not restarted, it cannot be held that the Management has terminated the services of the workmen and thereafter appointed somebody by creating sham contract of employment. 35. Now, the question is whether the services of the workmen in question could have been placed at the disposal of other departments of BTC Limited. The posts of drivers, cleaners, mechanics, etc. are not shown to be existing in the other departments. That apart, the strength of other sections is also reduced on account of the introduction of VRS 2004 and its acceptance by large number of other workmen. The contention that the workmen in question should have been accommodated in the subsisting sections is also not acceptable, as the Management had thrown open the VRS 2001 to reduce its manpower in all the sections of its establishment and VRS 2004 to reduce the manpower further. 36. It is not shown that the workmen in question are given the marching orders by way of victimization. There is no legal impediment in closing down the two sections of an industrial establishment. As defined in Section 2(cc) of the I.D. Act, the 'closure' means the permanent closing down of a place of employment or part thereof. 37. As held by the Apex Court in the case of Isha Steel Treatment (supra), the principle of last come first go has no application in the cases of genuine closure. The Apex Court's judgment in the case of Mackinon Mackenzie And Company (supra) does not come to the rescue of the workmen because in the said reported case, the workmen had not produced any evidence to show that the closure is bona fide and genuine. 38. Thus, the second question is answered in the negative. In Re. Question No. (iii) 39. The I.D. Act is a social and welfare-orientated legislation. It is permissible for the Labour Court to mould the relief in exercise of the power conferred by Section 11-A of the said Act. 40. 38. Thus, the second question is answered in the negative. In Re. Question No. (iii) 39. The I.D. Act is a social and welfare-orientated legislation. It is permissible for the Labour Court to mould the relief in exercise of the power conferred by Section 11-A of the said Act. 40. It is not that the whole establishment itself is closed down. The Management has only closed down two sections and has granted the VRS benefits to a large number of its employees. With these changes, the Management's financial position has atleast become better. 41. It is also not in dispute that the Management had offered to pay wages of 60 months towards compensation. The said offer only shows that the Management had the preparedness and the inclination to pay the higher compensation and close the matter. 42. The money value is on the decline. It is not that the Labour Court has directed the payment of interest on the monitory benefits of VRS 2004. 43. For all the aforesaid reasons, the third question is answered in the affirmative. 44. In the result, both the batches of writ petitions are dismissed. No order as to costs.