1964 (8) TMI 95 - HC - Indian Laws

Summary

Issues Involved:
1. Whether the notice of retrenchment given by the Management on the workmen named in Annexure 'B' is proper and justified.
2. Whether curtailment of medical facilities available in Dalmianagar Hospital by the Management adversely affects the service condition of the workmen. If so, to what remedy the workmen are entitled.

Issue-Wise Detailed Analysis:

1. Whether the notice of retrenchment given by the Management on the workmen named in Annexure 'B' is proper and justified:
The Management of Rohtas Industries Ltd. issued notices to 15 employees, including doctors and other medical staff, citing the introduction of the Employees' State Insurance (ESI) Scheme as the reason for their retrenchment. The Management argued that since 83% of the employees were covered under the ESI Scheme, maintaining the hospital staff at the previous level had become unnecessary. The Industrial Tribunal found that the retrenchment notice was proper and justified, stating that the reduction in hospital work due to the ESI Scheme warranted the retrenchment. However, the High Court disagreed, holding that the Management could not discontinue or reduce medical benefits that had become a customary concession and part of the service conditions without following the procedure outlined in Section 9A of the Industrial Disputes Act. The retrenchment was deemed illegal and unjustified because it affected the service conditions of the workmen.

2. Whether curtailment of medical facilities available in Dalmianagar Hospital by the Management adversely affects the service condition of the workmen. If so, to what remedy the workmen are entitled:
The Tribunal concluded that the medical facilities provided to the workmen were a customary concession and part of their service conditions. However, it erroneously held that the proposed retrenchment would not curtail these medical facilities. The High Court found that the retrenchment would indeed reduce the quality and quantum of medical benefits, thereby affecting the service conditions of the workmen. The court emphasized that the ESI Scheme did not cover all the medical needs of the employees, their dependents, and family members. The Management's contribution to the ESI Scheme did not justify the reduction of its own medical staff and facilities. The High Court held that the Management could not unilaterally reduce these benefits without adhering to the statutory requirements, thus answering the question in favor of the workmen.

Conclusion:
The High Court quashed the Industrial Tribunal's award, declaring it illegal and ultra vires. The retrenchment notice was found to be neither proper nor justified, and the curtailment of medical facilities was determined to adversely affect the service conditions of the workmen. The court ruled that the Management must continue providing the customary medical benefits until a proper procedure is followed for any changes.