Case Note & Summary
The Bombay High Court, Nagpur Bench, dismissed two writ petitions filed under Articles 226 and 227 of the Constitution by former employees of Sunrise Structural and Engineering Private Limited. The petitioners challenged separate orders passed by the Industrial Court, Nagpur, dismissing their complaints under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (MRTU & PULP Act). The complaints sought re-employment based on an agreement dated 05.12.1991. That agreement was reached between elected representatives of the workers and the management at a time when the company faced financial difficulties and could not provide work. Under the agreement, the management offered to pay gratuity, bonus, leave wages, and other dues to workers who voluntarily submitted resignations on 06.12.1991 and 07.12.1991, with a promise that if the establishment restarted, the workers who resigned would be given preference in re-employment as per need and seniority. Out of about 174 employees, 118 submitted their resignations under this scheme. The remaining employees did not resign and continued in employment. Two groups of the resigned workers (27 in each) later filed complaints before the Industrial Court, alleging that the employer failed to re-employ them despite restarting operations and instead employed other persons in violation of Section 25H of the Industrial Disputes Act, 1947, and the agreement. The Industrial Court dismissed both complaints, holding that the termination was voluntary resignation, not retrenchment, so Section 25H did not apply, and the complainants failed to prove that new employees were engaged. Additionally, the court found the agreement was a private arrangement, not a settlement under the Bombay Industrial Relations Act, 1946 (BIR Act). Before the High Court, the petitioners contended that the document dated 05.12.1991 amounted to retrenchment, thereby attracting Section 25H; that the agreement was illegal as it was not a registered settlement under Section 44 of the BIR Act; and that the Industrial Court ignored crucial evidence of fresh recruitment. The employer argued that the termination was voluntary and not retrenchment, that the agreement was a private arrangement, and that no fresh workers were employed. The High Court upheld the Industrial Court's findings, relying on Supreme Court judgments in Hindustan Steel Ltd. v. Presiding Officer and D.K. Yadav v. J.M.A. Industries Ltd., which established that Section 25H does not apply to voluntary resignations. The court also held that since the agreement was not a binding settlement under the BIR Act, its alleged illegality could not be a ground for relief under the MRTU & PULP Act. Further, the petitioners failed to prove that any other person was employed to do their work. Consequently, the court found no unfair labour practice under Item 9 of Schedule IV and dismissed both writ petitions.
Headnote
A) Industrial Disputes Act, 1947 - Section 25H - Re-employment of retrenched workmen - Termination of service pursuant to a voluntary resignation scheme with compensation does not amount to retrenchment under Section 2(oo) - Section 25H applies only to retrenchment, not to voluntary severance - Held, the Industrial Court correctly found that Section 25H was not attracted because the workers had voluntarily resigned under the agreement dated 05.12.1991 and were not retrenched (Paras 12-14). B) Bombay Industrial Relations Act, 1946 - Sections 2(17), 2(18), 44 - Settlement and agreement - An agreement between elected representatives and management, not registered under Section 44, is not a binding settlement under the BIR Act - However, it can still be a private arrangement and its validity cannot be challenged in proceedings under MRTU & PULP Act - Held, the agreement dated 05.12.1991, even if not a registered settlement, was a voluntary arrangement and the petitioners failed to prove that it was illegal (Paras 17). C) Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 - Schedule IV, Item 9 - Failure to implement award, settlement or agreement - Unfair labour practice - Claim for re-employment based on alleged breach of agreement and non-employment of new persons - Held, petitioners failed to prove that the employer had employed any new persons to do the same work, and since the petitioners were not in employment, they could not claim benefit under Item 9; no unfair labour practice established (Paras 15-16, 18). D) Evidence - Burden of proof - In complaints under MRTU & PULP Act, the burden lies on the complainant to prove the alleged unfair labour practice - Held, the petitioners failed to lead sufficient evidence to show that fresh employees were engaged in the same work after their termination; therefore, their complaint of unfair labour practice fails (Paras 15-16).
Issue of Consideration
Whether the Industrial Court correctly held that Section 25H of the Industrial Disputes Act was not attracted to the voluntary resignation/termination under the agreement dated 05.12.1991; whether the agreement was illegal being dehors the Bombay Industrial Relations Act; whether the refusal to re-employ constituted unfair labour practice under Item 9 of Schedule IV of MRTU & PULP Act
Final Decision
Both writ petitions are dismissed. The orders of the Industrial Court dismissing ULP Complaint Nos. 529/1994 and 832/1999 are upheld. No order as to costs.
Law Points
- Section 25H Industrial Disputes Act only applies to retrenchment
- not voluntary resignation
- agreement between elected representatives and management not registered under Section 44 BIR Act is not a binding settlement but can be a private arrangement
- unfair labour practice under Item 9 Schedule IV MRTU & PULP Act requires proof of employing new persons in violation of agreement
