Case Note & Summary
The petitioner, Global Health Care Products, a registered partnership firm manufacturing toothpaste in Dapada, Dadra and Nagar Haveli, closed its factory on 12 October 2009 after issuing a notice of closure dated 12 September 2009, citing lack of work orders from Hindustan Unilever. The respondent, Krantikari Kamgar Union, a trade union representing the workmen, raised an industrial dispute on behalf of 34 employees who did not settle their claims. The matter was referred to the Industrial Tribunal at Silvassa as I.D.R. No. 1 of 2010. The Tribunal passed an award on 30 November 2019, declaring the closure illegal under Section 25-O of the Industrial Disputes Act, 1947, and directed the petitioner to re-employ all retrenched workmen except 14 who had settled, with full backwages and future wages. The petitioner challenged the award by way of a writ petition under Articles 226 and 227 of the Constitution of India before the Bombay High Court. The key legal issues were whether the closure was illegal for want of prior permission under Section 25-O, and whether the Tribunal correctly computed the average number of workmen to determine the applicability of Chapter V-B. The petitioner argued that it employed less than 100 workmen on average, thus Chapter V-B did not apply, and that the closure was due to genuine financial constraints. The respondent contended that the petitioner employed more than 100 workmen, as evidenced by attendance records and wage registers, and that the closure without prior permission was illegal. The High Court, after hearing both sides, held that the Tribunal's findings of fact were based on evidence and were not perverse. The court noted that the burden of proof to show compliance with Section 25-O lay on the petitioner, which it failed to discharge. The court also upheld the computation of the average number of workmen, finding that the petitioner had more than 100 workmen per working day in the preceding 12 months, thus attracting Chapter V-B. Consequently, the High Court dismissed the writ petition, upholding the Tribunal's award directing re-employment and backwages.
Headnote
A) Industrial Law - Closure of Establishment - Section 25-O, Industrial Disputes Act, 1947 - Prior Permission - The petitioner closed its factory without obtaining prior permission from the appropriate government as required under Section 25-O of the ID Act, 1947. The Industrial Tribunal held the closure illegal and directed re-employment and backwages. The High Court upheld the award, finding that the petitioner employed more than 100 workmen on average per working day in the preceding 12 months, thus attracting Chapter V-B. (Paras 1-10) B) Industrial Law - Computation of Workmen - Section 25-K, Industrial Disputes Act, 1947 - Average Number - The court examined the method of computing the average number of workmen employed per working day. The Tribunal's finding that the petitioner had more than 100 workmen was based on evidence and not perverse. The High Court declined to interfere under Article 227. (Paras 11-20) C) Industrial Law - Burden of Proof - Section 25-O, Industrial Disputes Act, 1947 - Compliance - The burden lies on the employer to prove that it complied with the requirement of obtaining prior permission for closure. The petitioner failed to discharge this burden. The closure was therefore illegal. (Paras 21-25) D) Industrial Law - Remedy for Illegal Closure - Re-employment and Backwages - The Tribunal directed re-employment of all retrenched workmen except 14 who had settled, with full backwages. The High Court upheld this as the appropriate remedy for illegal closure. (Paras 26-30)
Issue of Consideration
Whether the closure of the petitioner's industrial establishment was illegal for non-compliance with Section 25-O of the Industrial Disputes Act, 1947, and whether the Industrial Tribunal correctly granted re-employment and backwages to the retrenched workmen.
Final Decision
The High Court dismissed the writ petition, upholding the award of the Industrial Tribunal dated 30 November 2019, which declared the closure illegal and directed re-employment of all retrenched workmen except 14 who had settled, with full backwages and future wages.
Law Points
- Closure of industrial establishment without prior permission under Section 25-O of Industrial Disputes Act
- 1947 is illegal
- Computation of average number of workmen for applicability of Chapter V-B
- Burden of proof on employer to show compliance with statutory requirements
- Re-employment and backwages as remedy for illegal closure
