Case Note & Summary
The petitioner, Meltron Engineering Industries, challenged an award of the Labour Court at Pune in a reference under Section 12(5) of the Industrial Disputes Act, 1947. The reference concerned a demand by the respondent union, Pune Labour Union, for reinstatement with continuity of service and full back wages for ten workmen. The petitioner opposed the demand, claiming that its unit was closed down and that closure compensation was paid to all workmen through an agreement with the representative union, Maharashtra Labour Union, evidenced by receipts dated 9 August 1997. The Labour Court did not accept the petitioner's case. It noted that the petitioner had not produced any agreement with the representative union or led oral evidence to prove the payment. The workmen denied receiving payment, and certified copies of cheques from the bank manager supported their denial. The court held that the petitioner failed to prove that the workmen were paid ex-gratia amounts in lieu of their right to reinstatement or re-employment. Even assuming payment was made, the court observed that parties cannot contract out of statutory provisions, and the workmen retained their right to re-employment under Section 25-H of the Act when the unit restarted. The court found that the petitioner had restarted manufacturing on 1 November 1997 but did not give notice to the retrenched workmen for re-employment, instead recruiting others. The Labour Court held that the petitioner violated Section 25-H and awarded reinstatement with continuity of service and full back wages. The High Court, in this writ petition, upheld the Labour Court's award, finding no perversity or error of law. The court noted that the Labour Court's findings were based on evidence and that the petitioner had not discharged its burden of proving closure or payment. The petition was dismissed.
Headnote
A) Industrial Disputes Act - Re-employment of Retrenched Workmen - Section 25-H - Duty of Employer - Employer restarting factory after closure must give notice to retrenched workmen for re-employment; failure to do so entitles workmen to reinstatement with back wages. Held that the employer's alleged closure was not bonafide and even if valid, the employer violated Section 25-H by recruiting others without offering re-employment to the retrenched workmen (Paras 2-3). B) Industrial Disputes Act - Contracting Out of Statutory Rights - Section 25-H - Agreement Contrary to Law - Parties cannot enter into an agreement that overrides statutory rights under the Industrial Disputes Act, 1947. Held that acceptance of ex-gratia payment by workmen does not waive their right to re-employment under Section 25-H (Para 2). C) Evidence - Burden of Proof - Closure and Payment - Employer failed to prove closure or payment of ex-gratia to workmen; receipts were disputed and not supported by oral evidence or bank records. Held that the employer did not discharge its burden to show that workmen gave up their lien over employment (Para 2).
Issue of Consideration
Whether the Labour Court was justified in ordering reinstatement with continuity of service and full back wages to ten workmen despite the employer's claim of closure and payment of ex-gratia compensation.
Final Decision
The High Court dismissed the writ petition, upholding the Labour Court's award of reinstatement with continuity of service and full back wages to the ten workmen.
Law Points
- Section 25-H of Industrial Disputes Act
- 1947 imposes duty on employer to give notice of re-employment to retrenched workmen when undertaking restarts
- parties cannot contract out of statutory rights
- burden of proof of closure and payment of ex-gratia lies on employer
