Case Note & Summary
The petitioner, Sandoz Private Limited, challenged an order dated 16 June 2020 passed by the learned Member, Industrial Court at Thane, allowing an application for interim relief in Complaint (ULP) No.156 of 2018 filed by the respondent union, Bhartiya Kamgar Karmachari Mahasangh. The Industrial Court directed the petitioner to provide work to the retrenched workmen or furnish security for their wages pending disposal of the complaint. The background facts reveal that the petitioner had closed its manufacturing unit at Turbhe, Navi Mumbai, after obtaining permission under Section 25-O of the Industrial Disputes Act, 1947, and retrenched the workmen with compensation. The respondent union filed a complaint alleging unfair labour practices under Item 1 of Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (MRTU & PULP Act), contending that the retrenchment was illegal for want of notice under Section 9A of the Industrial Disputes Act. The Industrial Court granted interim relief without recording a finding on the existence of a prima facie case, balance of convenience, or irreparable loss. The High Court held that the Industrial Court failed to apply its mind to the requirements of Section 30(2) of the MRTU & PULP Act, which is analogous to Order 39 Rules 1 and 2 of the Code of Civil Procedure, 1908. The High Court noted that the closure of a unit and retrenchment with permission under Section 25-O is not per se an unfair labour practice, and the Industrial Court did not consider whether the closure was genuine or a sham. The High Court also observed that the Industrial Court did not examine the applicability of Section 9A to closure or the specific allegations in the complaint. Consequently, the High Court quashed the impugned order and remanded the matter to the Industrial Court for fresh consideration of the interim relief application, directing the Industrial Court to pass a reasoned order after hearing both parties.
Headnote
A) Industrial Law - Interim Relief - Prima Facie Case - Section 30(2) of Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 - The Industrial Court must record a finding that a prima facie case exists before granting interim relief. The impugned order failed to do so, merely noting that the complaint raises serious issues. Held that the Industrial Court must apply its mind to the existence of a prima facie case, balance of convenience, and irreparable loss. (Paras 10-12) B) Industrial Law - Closure of Unit - Retrenchment - Sections 25-O, 25-N, 9A of Industrial Disputes Act, 1947 - The closure of a unit and consequent retrenchment of workmen is not per se an unfair labour practice. The employer had obtained permission under Section 25-O and paid compensation. The Industrial Court did not consider whether the closure was genuine or a sham. Held that the interim relief could not be granted without examining the validity of the closure. (Paras 13-15) C) Industrial Law - Unfair Labour Practice - Item 1 of Schedule IV of MRTU & PULP Act - Retrenchment without compliance with Section 25-N of Industrial Disputes Act, 1947 may constitute an unfair labour practice. However, the complaint alleged retrenchment without notice under Section 9A, but the Industrial Court did not examine whether Section 9A applied to closure. Held that the Industrial Court must consider the specific allegations and the employer's defence. (Paras 16-18)
Issue of Consideration
Whether the Industrial Court was justified in granting interim relief directing the employer to provide work or furnish security for wages to retrenched workmen pending adjudication of the complaint alleging unfair labour practices under the MRTU & PULP Act.
Final Decision
The High Court allowed the writ petition, quashed the impugned order dated 16 June 2020, and remanded the matter to the Industrial Court for fresh consideration of the interim relief application, directing the Industrial Court to pass a reasoned order after hearing both parties.
Law Points
- Interim relief under Section 30(2) of MRTU & PULP Act requires prima facie case
- balance of convenience
- and irreparable loss
- Industrial Court must record reasons for granting interim relief
- Retrenchment of workmen due to closure of unit is not per se an unfair labour practice
- Section 25-O of Industrial Disputes Act
- 1947 governs closure
- Section 9A of Industrial Disputes Act
- 1947 requires notice of change
- Section 25-N of Industrial Disputes Act
- 1947 applies to retrenchment
- Section 30(2) of MRTU & PULP Act is analogous to Order 39 Rules 1 and 2 of CPC.
