Case Note & Summary
The dispute arose from the closure of the Manufacturing and Supply Division (MSD) of Fujitsu ICIM Ltd., a company engaged in manufacturing computers, printers, fax machines, and software development with several divisions. In 1994 and 1997, the company floated voluntary retirement schemes for the MSD, leading to the exit of most employees; only 24 workmen remained. On 15th October 1996, the company suspended operations citing lack of work orders, and on 24th July 1997, it closed the manufacturing activities in Pune. The workmen filed Complaint (ULP) No.165 of 1997 before the Industrial Court, Pune under Section 28 read with Items 9 and 10 of Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, alleging that the closure was an unfair labour practice as the company failed to comply with Section 25 O of the Industrial Disputes Act, 1947, which requires government permission for closure of establishments employing 100 or more workmen. The company contended that the MSD was a separate entity with less than 100 employees, and Section 25 O did not apply. The Industrial Court dismissed the complaint on 5th May 1998, holding that less than 100 workmen were employed in the MSD on the closure date, that there was no functional integrality with other divisions, and that the representative complaint was not maintainable. The workmen then filed writ petition in the Bombay High Court challenging this order. They argued that documents produced on inspection—muster rolls and provident fund registers—revealed an average strength exceeding 100 workmen in the twelve months prior to closure, and that the company failed to produce all ordered documents, warranting an adverse inference. They relied on precedents to assert that breach of Section 25 O constitutes an unfair labour practice and that the onus of proving the number of workmen was on the employer. The company countered that the MSD was functionally independent, with separate service agreements, and that the majority of workers had accepted VRS, so the minority could not complain. The High Court heard arguments on the applicability of Section 25 O, functional integrality, maintainability of the complaint, and the adverse inference point. The judgment extract does not contain the final decision.
Headnote
A) Labour Law - Application of Section 25 O - Determination of Number of Workmen - Industrial Disputes Act, 1947, Section 25 O - The Industrial Court held that less than 100 workmen were employed in the MSD as on the date of closure, thus Section 25 O was not attracted. The workmen argued that the muster rolls and PF records showed the average for 12 months was above 100, and adverse inference should be drawn for non-production of documents. (Paras 6, 8, 9) B) Labour Law - Functional Integrality - Whether Different Divisions Form One Establishment - Industrial Disputes Act, 1947, Section 25 O - The Industrial Court held that the MSD was functionally independent from other divisions like ESD, based on separate agreements and no evidence of inter-departmental transfers. The workmen argued that all divisions were part of the same company and integral. (Paras 4, 8, 11) C) Labour Law - Maintainability of Complaint - Representative Complaint Under MRTU & PULP Act - Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, Section 28, Schedule IV Item 9 - The Industrial Court held that the complaint filed by five workmen on behalf of 24 was not maintainable after the closure; individual complaints should have been filed. The workmen argued that they had authorization. (Paras 3, 8) D) Labour Law - Adverse Inference - Non-production of Documents - Evidence Act, 1872, Section 114(g) - The Industrial Court did not draw adverse inference despite the employer’s failure to produce all directed documents. The workmen contended that an adverse inference was mandatory. (Paras 6, 8, 9) E) Labour Law - Onus of Proof - Number of Workmen to Attract Chapter V-B - Industrial Disputes Act, 1947, Section 25 O - The workmen argued relying on Varsha Vishwanath Kolambkar v. Ravindra Hindustan Platinum Pvt Ltd. that the onus is on the employer to prove the number of workmen is less than 100. (Para 10)
Issue of Consideration
Whether the closure of the Manufacturing and Supply Division (MSD) of the respondent Company without following the procedure under Section 25 O of the Industrial Disputes Act, 1947, constituted an unfair labour practice under Items 9 and 10 of Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, and whether the Industrial Court erred in dismissing the complaint.
Law Points
- failure to comply with Section 25 O amounts to unfair labour practice under Item 9 of Schedule IV of MRTU & PULP Act
- onus on employer to prove less than 100 workers
- functional integrality test for determining whether divisions are part of same establishment
- adverse inference for non-production of documents
