Case Note & Summary
The appeal arose from a common judgment of the Allahabad High Court dated 23.5.2003 in Writ Petition No.9498 of 1981 filed by the management (first respondent) and Writ Petition No.10321 of 1981 filed by the workmen (appellants). The High Court allowed the management's writ petition and dismissed the workmen's writ petition, both challenging the award dated 31.3.1981 of the Labour Court at Bareilly in Adjudication Case No.95 of 1979. The Labour Court had held that the workmen were entitled to retrenchment compensation under Section 25-FF of the Industrial Disputes Act, 1947. The management contended that there was no transfer of the undertaking and that the business was closed, so Section 25-FF did not apply. The workmen argued that they were entitled to compensation. The Supreme Court analyzed the facts and found that the employer had closed its business and there was no transfer of the undertaking. The Court held that Section 25-FF applies only when there is a transfer of the undertaking, and not in cases of closure. Therefore, the workmen were not entitled to compensation under Section 25-FF but were entitled to retrenchment compensation under Section 25-F. The Court allowed the appeal, set aside the High Court's judgment, and restored the Labour Court's award with modification that the compensation was under Section 25-F.
Headnote
A) Industrial Law - Retrenchment Compensation - Section 25-FF of Industrial Disputes Act, 1947 - Applicability - The court considered whether workmen are entitled to retrenchment compensation under Section 25-FF when the employer closed its business without any transfer of undertaking - Held that Section 25-FF applies only when there is a transfer of the undertaking, and not in cases of closure - The workmen were entitled to compensation under Section 25-F for retrenchment due to closure (Paras 1-10).
Issue of Consideration
Whether the workmen are entitled to retrenchment compensation under Section 25-FF of the Industrial Disputes Act, 1947, when the employer closed its business and there was no transfer of the undertaking.
Final Decision
Appeal allowed. High Court judgment set aside. Labour Court award restored with modification that compensation is under Section 25-F of Industrial Disputes Act, 1947.
Law Points
- Section 25-FF of Industrial Disputes Act
- 1947
- applicability only on transfer of undertaking
- closure of business
- retrenchment compensation
- workmen's entitlement
