1978 (10) TMI 153 - SC - Indian Laws

Summary

Issues Involved:
1. Competency of the Government to refer an industrial dispute after initially declining to do so.
2. Validity of the reference made by the Government.
3. Classification of termination: whether it constitutes retrenchment or closure of an undertaking.
4. Compliance with the conditions precedent for retrenchment under Section 25F of the Industrial Disputes Act, 1947.

Issue-wise Detailed Analysis:

1. Competency of the Government to Refer an Industrial Dispute After Initially Declining:
The appellant contended that once the Government declined to make a reference under Section 10(1) of the Industrial Disputes Act, it could not subsequently change its mind and make the reference unless there was fresh or additional material. The Court held that Section 10(1) confers discretionary power on the Government to refer an industrial dispute at any time if it exists or is apprehended. The Government's refusal to make a reference does not exhaust its power to do so later. The Court cited *Western India Match Co. Ltd. v. Western India Match Co. Workers Union* and *Binny Ltd. v. Their Workmen* to support that the Government can reconsider its decision and make a reference if the dispute continues to exist and threatens industrial peace.

2. Validity of the Reference Made by the Government:
The appellant argued that the reference made by the Government was different from the original demand raised by the Union, making it invalid. The Court found that the Union's demand was for reinstatement with full back wages, alleging illegal termination of service. The Government's reference to the Tribunal was about the validity of the retrenchment and the relief for the workmen. The Court held that the substance of the dispute remained the same, focusing on the termination of service and the consequential relief, thus validating the reference.

3. Classification of Termination: Retrenchment or Closure:
The appellant claimed that the termination was due to the closure of the painting section, governed by Section 25FFF, not Section 25F. The Court examined whether the painting section constituted a separate undertaking. It concluded that the painting section was not an independent undertaking but part of the manufacturing process. The Court referenced *State Bank of India v. N. Sundara Money* to define retrenchment as any termination of service by the employer. The notice served by the appellant indicated retrenchment, despite mentioning Section 25FFF. The Court held that the termination was a case of retrenchment.

4. Compliance with Conditions Precedent for Retrenchment Under Section 25F:
The Tribunal found that the appellant did not comply with the conditions precedent under Section 25F, such as serving one month's notice or paying wages in lieu of notice and retrenchment compensation. The Court upheld this finding, noting that the failure to meet these conditions rendered the retrenchment invalid. The Tribunal's direction for reinstatement with full back wages was deemed appropriate.

Conclusion:
The appeal was dismissed with costs quantified at Rs. 2,000. The Court affirmed the Tribunal's decision that the Government's reference was valid, the termination constituted retrenchment, and the appellant failed to comply with the conditions precedent under Section 25F, justifying the relief granted to the workmen.