In, Armed Forces Ex Officers Multi Services Cooperative Society ltd. vs Rashtriya Mzdoor Sangh, SC held that, Once the orders of retrenchment are set aside, the workmen will naturally be entitled to continuity of service with order of back wages as determined by a Tribunal or a Court of law.
Facts
The Appellant is a cooperative society run by ex-officers of the three defence forces, Fifty-five drivers who are members of the Respondent Union were employed by the Appellant through a settlement for pay and allowances. However, the Appellant through individual letters ‘retrenched’ the services of all the fifty-five employees, on the grounds that Appellant had closed its business & the employees were offered retrenchment compensation as per Section 25F of the Industrial Disputes Act.
Aggrieved by the same the respondent Union approached industrial tribunal whereby Tribunal answered the reference in the affirmative by setting aside the termination of employees and directing reinstatement with 75% back wages. Aggrieved by the Award, Appellant prefffered writ petition before Bombay High Court, Whereby court upholds & affirms the findings of Tribunal & directed the reinstatement.
The Present Civil Appeal is then preferred by the Appellant challenging the order of Bombay HC.
Contention Made
Appellant: That the illegal strike carried out by the Respondent led to the termination of Appellant’s transport contracts with its clients, Appellant did not effectuate any closure by the termination letters, but was merely re-organising its business by temporarily shutting down their transport activities.
Further, Learned counsel on behalf of Appellant contended that , the Tribunal as well as the High Court to pay 75% back wages is contrary to the principles laid down by Apex Court in M.L. Singla vs Punjab National Bank3 , Deepali Gundu Surwase vs Kranti Junior Adhyapak Mahavidyalaya (D. Ed.) & Ors, (2013) 10 SCC 324.
Respondent: That there was no de facto closure of Appellant’s transport business. Even if such a closure was effected, it is illegal as sixty-days’ notice was not given in terms of Section 25FFA of the Act.
Court Observation
SC while analyzing the statutory provision in order to address the Contention raised by the appellant observed that; There is also no quarrel with the principle of Parry & Co. Ltd. v. P.C. Pal, (1969) 2 SCR 976, which laid down the proposition that a bona fide policy decision for re-organising the business based on economic considerations is within an enterprise’s proprietary decision and retrenchment in this context must be accepted as an inevitable consequence.
Further Court observed there is no quarrel with the principle of law that reemployment of retrenched workmen does not entitle them to claim continuity of service. The only condition needs to be satisfied that the retrenchment is bona fide.
Court Judgment
The SC while dismissing the appeal has held that the finding of the Tribunal as upheld by the High Court, cannot be interfered with by the Supreme Court in exercising its power under Article 136 of the Constitution of India.
The SC further held that, once the orders of retrenchment are set aside, the workmen will naturally be entitled to continuity of service with order of back wages as determined by a Tribunal or a Court of law. Hence findings of the Tribunal are proof to be conclusive.
Case: Armed Forces Ex Officers Multi Services Cooperative Society ltd. vs Rashtriya Mzdoor Sangh.
Citation: CIVIL APPEAL No. 2393 of 2022
Bench: Hon’ble Justice Pamidighantam Sri Narasimha
Decided on: 11th August, 2022.
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