Concrete Poles and Paper Conversion Workers'' Union vs The Himachal Pradesh State Small Industries and Export Corporation Ltd. and Others

Kamlesh Sharma, J.—This writ petition has been filed by Concrete Poles and Paper Conversion Workers'' Union, Parwanoo, which is a registered Union under the Trade Union Act, on behalf of its members who are Workmen of two Industrial Units, that is, Concrete Poles Manufacturing Unit and Paper Conversion Unit, at Parwanu. The grievance raised in the petition is that the notice dated 29.1.1991 given to the workmen, whereby they have been retrenched with effect from the date of notice, is bad and may be quashed. By the impugned notice, the workmen have been given their dues in accordance with the provisions of Section 25-F of the Industrial Disputes Act, 1947 (hereinafter called the Act''). Though according to the Petitioner-Union the amount due to the workmen has been correctly calculated but they are aggrieved by the deduction of the lay off compensation paid to them during the period of 12 months preceding the date of notice. The main challenge to the notice is that the Respondent No. 1, the Himachal Pradesh State Small Industries and Export Corporation Ltd., to whom the two Industrial units in question belonged, has more than 100 workers in its employment for running and managing its activities, including those of the said Units, as such, for the retrenchment of the workmen, the procedure prescribed under Chapter V-B of the Act was required to be followed, which has admittedly not been followed. In the alternative, the case of the Petitioner-Union is that if the number of workmen is less than 100, the procedure prescribed under Chapter V-A of the Act was required to be followed which has also not been followed inasmuch as sixty days notice of intention to close down the said two units, as provided u/s 25-FFA of the Act, was not given to the State of Himachal pradesh, with the result that the closure of the said two Units was bad as a, consequence whereof the workmen were retrenched. In view of the aforesaid, it is alleged that retrenchment is also bad.

The case of Respondent No. l, as set out in the reply-affidavit, is that the said two Units were independent undertakings and the number of workmen employed in each of them was less than 50, as such, only the provisions of Section 25-F of the Act were required to be applied for the retrenchment of their workmen. According to Respondent No. l, neither Chapter V-A nor Chapter V-B of the Act is applicable except the provisions of Section 25-F of the Act.

During the course of arguments, Sh. D.D. Sood, learned Counsel for Respondents No. l and 2, has relied upon the definition of Industrial Establishment or Undertaking as given in Section 2(ka) of the Act which is as under:

Industrial establishment or undertaking" means an establishment or undertaking in which any industry as carried on:

Provided that where several activities are carried on in an establishment or undertaking and only one or some of such activities is or are an industry or industries, then:

(a) If any Unit of such establishment or undertaking carrying on any activity, being an industry, is severable from the other unit or Units of such establishment or undertaking, such unit shall be deemed to be a separate industrial establishment or undertaking;

(b) If the predominant activity or each of the predominant activities carried on in such establishment of undertaking or any unit thereof is an industry and the other activity or each of the other activities carried on in such establishment or undertaking or unit thereof is not severable from and is, for the purpose of carrying on, or aiding the carrying on of, such predominant activity or activities, the entire establishment or undertaking or, as the case may be, unit thereof shall be deemed to be an industrial establishment or undertaking;

It is not in dispute that Respondent No. l is an industrial establishment or undertaking which has established a number of units for the manufacture sale and distribution of varied industrial products. So far its Concrete Poles Manufacturing unit is concerned, it used to manufacture pre-stressed (concrete poles by casting in moulds and so far Paper Conversion unit was concerned, it was manufacturing stationery and allied items. According to Respondent No. l, the Paper Conversion Unit was not a printing press. From the nature of activities of both the units, it is clear that they were severable units and could be considered separate industrial establishments or undertakings as per the definition given in Section 2(ka) of the Act.

Now, the question arises how many workmen were employed in each of these two units. So far the Paper Conversion unit is concerned, it is not in dispute that only 21 workmen were employed who were retrenched. The dispute is with regard to the number of workmen in the other Unit, namely. Concrete Poles manufacturing Unit. According to the Petitioner-Union, the number of workmen was 53 whereas according to Respondent No. l it was less than 50 and the precise figure was 49 workmen who were retrenched by giving the impugned notice. However, Respondent No. l has placed before us its record in which we find that notice of retrenchment u/s 25-F(c) of the Act read with Rule 81 of the Industrial Disputes Rules, 1974 was given to 49 workmen. According to Sh. S.S. Kanwar, learned Counsel appearing for the Petitioner-Union, this Court may take the figure 53'' as correct as it has been referred to in the award dated 16.2.1991 passed by the Presiding Officer, Industrial Tribunal in respect of industrial dispute arising between the parties. We find that the reference for the said industrial dispute was made somewhere in the year 1985, as such; there is a possibility that this number might have increased or decreased during the later period. There is no material on record to come to a definite conclusion as to what was the number of workmen employed by the Concrete Poles manufacturing unit on the day it was closed or during the preceding 12 months on an average per working day. Therefore, on the basis of the material placed before us, we have no alternative but to rely upon the record of Respondent No. l and to hold that the number of workmen employed at Concrete Poles Manufacturing Unit on the day of closure was 49, that is, less than 50. After coming to this conclusion, we may further hold that Chapter V-B of the Act was not applicable in the present case and it was only Section 25-F of Chapter V-A of the Act which was applicable. No notice was required to be given u/s 25-FFA of the Act as the number of workmen was less than 50 in both the said units. So far the provisions of Section 25-F are concerned; we find that these were duly complied with. Notice of one month was not given but in lieu of it wages for one month were given in addition to retrenchment compensation and other dues payable to the workmen. So far notice under Sub-section (c) of Section 25-F of the Act is concerned; it was also served upon the Government as prescribed under Rule 81 of the Industrial Disputes Rules. Therefore, we do not find any infirmity in the retrenchment of the workmen. The reason given in the notice-heavy losses suffered by the two Units, is not the subject matter of adjudication in the present writ petition, therefore, we uphold the impugned notice except its Item No. 7, that is, deduction of lay off compensation paid to the workmen during the preceding 12 months of their retrenchment.

In view of our findings that in both the industrial units in question less than 50 workmen were employed, Section 25-C of the Act, which provides for payment of lay off compensation, is not applicable as provided u/s 25-A. However, once the lay off compensation was paid to the workmen, it could not be deducted from their dues while paying them dues at the time of retrenchment by applying the second proviso to Section 25-C of the Act, as has been done by Respondent No. l It has been urged by Sh. S.S. Kanwar, learned Counsel for the Petitioner-Union, that the second proviso to Section 25-C could be applied if there was an agreement between the workmen and the employer that no compensation would be paid after the expiry of 45 days of the lay off period as stated in the second proviso to the aforesaid section. Admittedly, there was no agreement between the workmen and the employer, and, in fact, the lay off compensation was paid to them for a period of 12 months preceding their retrenchment. As such, there was no question of application of the second proviso to set off the lay off compensation against the dues payable to the workmen at the time of their retrenchment. We need not examine this point raised by Sh. S.S. Kanwar in view of our findings that, in fact, Section 25-C of the Act was not applicable to the said two Units of Respondent No. l. Be that as it may, after paying the lay off compensation for a period of 12 months, Respondent No. l could not deduct it in the manner it has done without giving any opportunity to the workmen and without applying its mind that there was no provision of law to deduct it from the dues payable to the retrenched workmen. Therefore, we hold that deduction of lay off compensation from the dues payable to the workmen at the time of their retrenchment, as stated in the notice u/s 25-F of the Act, was bad and the workmen are entitled to this amount. Since it was wrongly denied to the workmen on 29.1.1991, it will be in the interest of justice and fair play to compensate them by payment of interest at the rate of 10% per annum from the date of notice that is, 29.1.1991, till the date of payment. Order accordingly.

The result of the above discussion is that we allow this writ petition to the limited extent that the workmen will be returned the amount of lay off compensation deducted from their retrenchment dues, with interest accrued thereon, within a period of three months from today.

Before parting with this writ petition, we may observe that from the record placed before us, we feel that no serious attempt was made by the Respondents to absorb these retrenched workmen in other Undertakings/Industrial Units/ Departments of the State government. It is not in dispute that the workmen had put in about 8 to 10 years'' service in the two Units of Respondent No. l Corporation, as such, had they been given fresh employment in other Undertakings or Department (s) of the Govt., they would have been benefited of their experience besides giving to the workmen their livelihood. Therefore, we expect that the Respondent No. l Corporation as well as the State Government of Himachal Pradesh will make earnest effort to re-employ the workmen of these two Units, namely, Paper Conversion Unit and the Concrete Poles manufacturing Unit. Let the Petitioner-Union make representation(s) in this behalf to Respondent No. l Corporation and to the Secretary (Labour & Employment), Respondent No. 3, Costs easy.