Bombay High Court
Nicholas Piramal India Limited vs Nicholas Employees Union on 3 July, 2008
Bench: J.P. Devadhar
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.3505 OF 2008
Nicholas Piramal India Limited )
A Company incorporated under )
The provision of the Companies )
Act, 1956 and having its office )
Nichoclas Piramal Tower, )
Ganpatrao Kadam Marg, Lower )
Parel, Mumbai 400 013. )..Petitioner.
V/s.
Nicholas Employees Union, 48. )
Chanchal Smruti, Katrak Road, )
Wadala, Mumbai - 400 031. )..Respondent.
ig WITH
ORIGINAL SIDE
WRIT PETITION NO.1304 OF 2008
Nicholas Employees Union, having )
its office at 48, Chanchal Smruti, )
Katrak Wadala Road, Mumbai-400 031. )..Petitioner.
V/s.
1. M/s. Nicholas Piramal India Ltd. )
having its registered office )
Nichoclas Piramal Tower, )
Ganpatrao Kadam Marg, Lower )
Parel, Mumbai 400 013. )
)
2. Mr. Ajay Piramal, Chairman )
Nichoclas Piramal Tower, )
Ganpatrao Kadam Marg, )
Lower Parel, Mumbai 400 013. )
)
3. Mr.D.B.Shelarkar, General )
Manager -HRD, Haemaccel Plant, )
M/s.Nicholas Piramal India Ltd. )
L.B.S.Marg, Mulund (W), )
Mumbai 400 080. )
)
4. Mr.A.B.Khot, GM Mfg. Operations )
(Haemaccel) Nicholas Piramal )
::: Downloaded on - 09/06/2013 13:33:21 :::
- = : 2 : = -
India Ltd., L.B.S. Marg, )
Mulund (W), Mumbai - 400 080. )
)
5. Mr.Adhir Mane, Vice President )
H.R. Nicholas Piramal India Ltd. )
Nichoclas Piramal Tower, )
Ganpatrao Kadam Marg, Lower )
Parel, Mumbai - 400 013. )
Mr.J.P.Cama, senior Advocate i/b. M/s. Haresh
Mehta for Company.
Mr.Arshad Shaikh, Advocate with Piyush Shah for
Union.
CORAM : J.P.DEVADHAR, J.
ig DATED : 3RD JULY, 2008.
JUDGMENT
1. In these two Writ Petitions the interim
order passed by the Industrial Court, Mumbai on
5/5/2008 in Complaint (ULP) No.118 of 2008 is
challenged. By the said interim order, the
Industrial Court has rejected the application of the
Complainant-Union by declining to stay the transfer
of the employees from Mulund in Mumbai to Baddi in
Himachal Pradesh except in the case of 7 employees.
2. Complaint (ULP) No.118 of 2008 was filed
by the Nicholas Employees Union ('Union' for short)
alleging unfair labour practice on the part of
Nicholas Piramal India Ltd. ('Company' for short)
- = : 3 : = -
in closing the Mulund Unit and transferring the
permanent employees working in the Mulund Unit to
Baddi a place in Himachal Pradesh. The Union
contended that the decision of the Company in
shifting the Mulund Unit and consequently
transferring the employees is vitiated by malafides
and constituted unfair labour practice under the
MRTU & PULP Act, 1971. As the Industrial Court
declined to grant interim relief except in the case
of 7 employees, both the Company as well as the
Union have filed these two Writ Petitions.
3. Writ Petition No.3505 of 2008 is filed by
the Company to challenge the order of the Industrial
Court in so far as it relates to directing the
Company to absorb 7 employees of the Mulund Unit at
its other establishments of the Company in Mumbai /
Thane region. Writ Petition No.1304 of 2008 is
filed by the Union to challenge the order of the
Industrial Court in so far as it relates to
declining to stay the transfer of the remaining 19
employees.
4. Since both the Writ Petitions arise from
a common order passed by the Industrial Court dated
5/5/2008, both the writ petitions are admitted and
heard finally by consent of the parties and disposed
- = : 4 : = -
of by this common Judgment.
5. The Company is engaged in the business of
manufacturing and marketing various pharmaceutical
products. For that purpose, the Company has
established various units in Maharashtra, Madhya
Pradesh, Himachal Pradesh, Andhra Pradesh and Tamil
Nadu.
6. The dispute in the present case, relates
to Haemaccel
Plant at Mulund ('Mulund
short) which was acquired by the Company in the year
Unit' for
2000, from Hoechst Marion Roussel Ltd. In the said
plant, life saving drug known as 'Haemaccel' was
manufactured.
7. The Company had acquired the Mulund Unit
consisting of plant and machinery and not the labour
force attached to it. Therefore, for running the
newly acquired Mulund Unit, the Company transferred
some employees from its Deonar Unit to the Mulund
unit. The Company had also hired the services of
some of the technical staff on contract basis, who
were working in the said unit prior to the
acquisition, so as to train the employees who were
transferred from Deonar Unit to Mulund Unit. It is
not in dispute that the employees transferred from
- = : 5 : = -
the Deonar Unit as well as the technical staff hired
from Hoechst Marion Roussel Ltd. continued to work
in the Mulund Unit till the operations were closed
in March, 2008.
8. It may be noted that these employees who
were transferred from the Deonar Unit had challenged
their transfer to the Mulund Unit by filing a
Complaint through their Union under the MRTU & PULP
Act and in those proceedings, a Division Bench of
during
this Court by an order dated 19/1/2004 directed that
the pendency of the complaint, the services
of the employees transferred from Deonar Unit to the
Mulund Unit shall not be terminated without first
seeking permission of the Court. The said complaint
is still pending. Accordingly, since 2000 the
employees transferred from the Deonar Unit have been
working in the Mulund Unit.
9. Some time in April 2007, these
transferred employees working in the Mulund Unit
became apprehensive that the company may close the
Mulund unit. The Union representing these employees
addressed a letter to that effect to the Company on
26/4/2007. By its letter dated 29/5/2007 the
Company informed the Union that there is no basis
for such apprehension and if any action contemplated
- = : 6 : = -
by the Company has adverse impact on the workmen,
then the same will be done by following the due
process of law.
10. Thereafter, the Company by its letter
dated 1/2/2008 called upon the Union leaders to
attend a meeting inter alia to discuss the issue
relating to the shifting of the Mulund Unit. In the
said meeting, the Union leaders were informed that
the Company has decided to shift the Mulund Unit to
exigencies.
their factory site at Baddi in H.P. due to business
The basic reason given for shifting the
unit was that the Form Fill and Seal (FFS) Machine
at Mulund Unit used for manufacturing 'Haemaccel'
has the capacity to manufacture 40 lakh bottles per
year whereas it is utilised only to the extent of 18
lakhs bottles per year. To utilise the FFS machine
to its full capacity at Mumbai, it would be
necessary to modernise the Mulund unit and for that
purpose, the Unit will have to be shut for atleast 6
months for modernisation which will lead to short
supply of life saving drug manufactured at the said
unit. Moreover, modernisation of the Mulund unit
would mean incurring huge expenditure which can be
avoided by shifting the Unit from Mulund to Baddi in
H.P. where the requisite infrastructure is readily
available with the Company. Further, shifting of
- = : 7 : = -
the unit from Mulund to Baddi in H.P. would give
the company tax benefits as also other benefits.
The Company informed the Union that the dismantling
work of the Mulund Unit would commence from
1/3/2008. The Union leaders were informed that the
permanent employees in the Mulund Unit would be
transferred to Baddi with effect from 1/3/2008 on
the existing terms and conditions of service. It
was further intimated that the reasonable travelling
expenditure from Mumbai to Baddi would be borne by
the
Company and temporary accommodation would
be provided to these employees.
also
11. Challenging the action of the company,
complaint (ULP) No.118 of 2008 was filed by the
Union alleging that closing the Mulund and
transferring the 26 permanent employees from Mulund
in Mumbai to Baddi in the State of H.P. was
vitiated by malafides and constituted unfair labour
practice covered under section 28 read with item 5
of schedule II and items 3, 9 & 10 of schedule IV of
the Maharashtra Recognition of Trade Unions and
Prevention of Unfair Labour Practices Act, 1971
('MRTU & PULP Act' for short). In the said
complaint, an application was filed by the Union
seeking an order that the transfer of the employees
from Mulund to Baddi in the State of Himachal
- = : 8 : = -
Pradesh be stayed till the disposal of the
complaint.
12. By the impugned order dated 5/5/2008 the
Industrial Court rejected the application for stay
by holding that, prima facie, as per service
conditions the company had a right to shift the
plant and machinery from the Mulund Unit along with
its employees and that the company has prima facie
taken all necessary steps in arranging for the
transfer
which
of
its employees and their
are reasonably expected from an employer.
accommodation
In
spite of holding that no case was made out for
staying the transfer, the Industrial Court on
humanitarian grounds directed the company to absorb
7 out of the 26 employees in other establishments of
the company in Mumbai / Thane region and as regards
remaining 19 employees, the Industrial Court held
that their transfer to Baddi will be subject to the
outcome of the complaint. Challenging the aforesaid
order, both the company as well as the union have
filed the aforesaid two petitions.
13. Mr.Arshad Shaikh, learned counsel
appearing on behalf of the Union submitted that the
action of the Company in closing the Mulund Unit and
shifting the machinery to Baddi in H.P. and
- = : 9 : = -
directing the employees of the company working in
the Mulund Unit to report for duty at Baddi is in
gross abuse of the process of law and is vitiated by
malafides. He submitted that since prima facie case
of malafides and unfair labour practice was made
out, the Industrial Court ought to have stayed the
transfer of all the employees during the pendency of
the complaint.
14. Elaborating his arguments, Mr.Shaikh
legal
submitted that the action of the Company is vitiated
by malafides as well as factual malafides.
The legal malafides are that in the absence of any
clause in the service conditions, the Company could
not have transferred the employees from Mulund to
Baddi. In the appointment letters issued by the
Company to all these 26 employees, nowhere it is
stated that their services are liable to be
transferred to an establishment which may be set up,
established or acquired at any time in the future.
As the Unit at Baddi has been established in the
year 2008, that is subsequent to the appointment of
these 26 permanent employees, the Company could not
have transferred these employees to Baddi. He
submitted that while engaging the services of the
technical staff on contract basis in the year 2000,
the Company had specifically incorporated a clause
- = : 10 : = -
in the appointment letter to the effect that their
services are liable to be transferred to an
establishment which may be set up, established or
acquired at any time in future. Thus, wherever the
Company wanted to transfer the employees to any
future establishment, a specific clause was
incorporated to that effect in the appointment
letter itself. Therefore, transferring these 26
employees from Mulund to Baddi without there being
any clause to that effect in the service condition
constitutes
Company
legal malafides
and, therefore, the Industrial Court
on the part of the
ought
to have stayed the transfer orders of all the
permanent employees from Mulund to Baddi. In this
connection, he relied upon a decision of the Apex
Court in the case of Kundan Sugar Mills V/s.
Ziyauddin reported in AIR 1960 S.C. 650 as well as
decisions of this Court in the case of Crest
Communication Limited V/s. Ms. Sheetal Shenoy
reported in 2001 II CLR 1036, Maharashtra General
Kamgar Union V/s. All India Handloom Fabrics
Marketing Coop. Society Limited reported in 1991 II
CLR 293, Group Pharmaceuticals Limited V/s. Blossom
Godinho reported in 1998 I LLJ 1182 and P.T.I. Ltd.
V/s. P.T.I. Employees Union reported in 2002 III
CLR 879.
- = : 11 : = -
15. Mr.Shaikh further submitted that apart
from the legal malafides, the transfer order suffers
from factual malafides, because, when Mulund unit
was running smoothly and was making profits, there
was no need to close the unit and shift the
machinery. Even if the Company wanted to enhance
the production, it could be done at the existing
Mulund Unit and there is nothing on record to
suggest that the modernisation of the said Unit was
necessary. In fact upgradation of the Mulund Unit
was done
prescribed by
from time to time to meet
the Food & Drug
the standards
Administration.
Moreover, the transfer order has been issued without
application of mind and without considering as to
whether any employee is due to retire in the near
future and whether there were exceptional
circumstances such as serious ailment, family
problems, etc. of the employees. Even an employee
who is due to retire in the first week of July, 2008
is also transferred. Three lady employees who had
put in more than 35 years of service had serious
family problems and there were three employees
having heart problem. None of these factors have
been considered by the Company and, therefore, the
Industrial Court had to interfere and stay their
transfer. Thus, closing the Mulund Unit without any
justification was vitiated by factual malafides.
- = : 12 : = -
Assuming that there was any commercial expediency in
closing the Mulund Unit, the Company ought to have
absorbed these 26 employees in its other
establishments in Mumbai - Thane Region as these
employees were transferred from Deonar Unit and in
the proceeding relating to that transfer, this Court
by its order dated 19-1-2004 had directed the
Company to obtain prior permission from the Court in
case the Company decided to close the Mulund Unit
during the pendency of the Complaint. Even though
the Company
has decided to close the Mulund
with a view to avoid seeking approval of this Court,
Unit,
the Company claims to have 'shifted' the Mulund Unit
when in fact it had decided to close the Mulund
Unit. Therefore, the action of the Company which is
vitiated by legal and factual malafides ought to
have been stayed by the Industrial Court.
16. Mr.Shaikh further submitted that in the
proceeding relating to the transfer of these
employees from the Deonar Unit to the Mulund unit,
the Company had filed an affidavit stating that the
transfer from Deonar unit to Mulund Unit was in the
interest of the employees as it was in the nature of
having a permanent job in Mumbai. In spite of the
above solemn statement on oath, it was not open to
the Company to transfer these employees from Mumbai
- = : 13 : = -
to Baddi in the State of H.P.
17. Mr.Shaikh further submitted that the fact
that the services of the technical staff hired from
the Hoechst Marion Roussel Limited have been
discontinued from March 2008 clearly shows that the
Company has in fact decided to close the Mulund Unit
and the contention that the Mulund Unit has been
shifted is totally false, because, without the
technical staff it is impossible to run the unit at
Baddi.
requisite
Moreover,
licence
when the Company does
to manufacture
not
'Haemaccel'
have
at
Baddi, directing the 26 employees who are only the
packing staff, helpers, sweepers etc. to report for
duty at Baddi is wholly unjustified and therefore,
pending the hearing and final disposal of the
Complaint, the transfer of all the employees be
stayed.
18. Relying upon a decision of this Court in
the case of Brihanmumbai Union of Journalists V/s.
Nav Bharat Press Limited reported in 2002 II CLR 67,
Mr.Shaikh submitted that the alleged shifting of the
Unit and transferring the 26 employees from Mulund
to Baddi without any justification is colourable
exercise of power and such an action ought not to
have been permitted to be implemented.
- = : 14 : = -
19. Relying upon the decisions of the Apex
Court in the case of Workmen V/s. Associated Rubber
Industry Limited reported in 1986 I CLR 284, B.
Varadha Rao V/s. State of Karnataka reported in
(1984) 4 SCC 131, State of M.P. V/s. Shankarlal
reported in AIR 1980 SC 643,
643 Mr.Shaikh submitted
that unwarranted and unreasonable transfer from
Mulund in Mumbai to Baddi in H.P. is bound to cause
irreparable harm to the employees as it disrupts the
education
other
of
complications
their children and lead
and problems and
to numerous
results in
hardship and demoralisation and therefore, the
Company should not have abruptly closed the unit and
transferred the employees to a new establishment.
He submitted that since the complaint can be decided
in a time bound manner, it is just and proper that
the transfer order be stayed and the employees be
paid wages subject to the final decision in the
Complaint and subject to adjustment of the said
wages from the gratuity amount etc. payable to the
employees. Mr.Shaikh lastly submitted that the
employees would go to Baddi if the services of these
employees who are packing staff, helpers, sweepers
etc. is absolutely necessary and the Company takes
effective steps to ameliorate their hardships by way
of monetary benefits and till then the transfers be
- = : 15 : = -
stayed.
20. Mr.Cama, learned Senior Advocate
appearing on behalf of the Company on the other hand
submitted that the Industrial Court having held that
the transfer was prima facie in accordance with law
could not have directed that pending the complaint,
7 out of the 26 employees be absorbed in the other
establishments of the Company. Mr.Cama fairly
stated that as regards the employee who is due to
retire
pressing
in
the case.
the first week of July 2008, he
However, as regards the other 6
is not
employees, he submitted that the Industrial Court
committed an error in directing the Company to
absorb them in other establishments of the Company
in the Mumbai / Thane region, in spite of the clear
stand taken by the Company that no vacancies exist
in those establishments.
21. Mr.Cama submitted that the direction of
the Industrial Court to accommodate / absorb some of
the employees in other establishments of the Company
at Mumbai / Thane region is based on inferences and
not warranted by facts and such a presumption is not
permitted in law. He submitted that having held
that the personal difficulties and hardships are no
grounds for staying the transfer, the Industrial
- = : 16 : = -
Court could not have stayed transfer of some of the
employees. The fact that the three lady employees
had put in more than 35 years of service and the
fact that three other employees were suffering from
heart ailment could not be a ground to stay the
transfer. The impugned order in so far as it
pertains to directing the Company to absorb the
employees in other establishments in the Mumbai /
Thane region without any cogent reasons and
exceptional circumstances, cannot be sustained.
22.
Dealing with the case of 19 employees who
were denied interim relief by the Industrial Court,
Mr.Cama submitted that in their appointment letter,
it was specifically stated that their services are
liable to be transferred to any other inter
department or inter establishment of the Company.
Therefore, the Company was within its rights to
transfer the employees. The fact that in the
appointment letter issued to the technical staff
employed in the year 2000 the Company had stated
that their services liable to be transferred to any
establishment which may be set up, established or
acquired at any time in future, it cannot be
inferred that these 26 employees were not liable to
be transferred to Baddi. The submission is that
what was implicit in the existing transfer clause
- = : 17 : = -
was made explicit in the transfer clause contained
in the appointment letters issued to the technical
staff in the year 2000. Therefore, there is no
merit in the contention that the Company could not
have transferred these employees.
23. Mr.Cama further submitted that the
decision to shift the Mulund Unit to Baddi in H.P.
was a commercial decision taken by the Company due
to business exigencies. After taking decision to
shift
the
the
services
Unit, the Company could have
of these employees, however,
terminated
with a
view to maintain industrial harmony, the Company has
decided to transfer the services of all the
permanent employees on the same terms and conditions
to the shifted place. Moreover, the Company has
agreed to bear the reasonable travelling expenses of
the employees and has also made temporary
arrangements for their stay at Baddi till, they find
suitable accommodation. In these circumstances, the
decision of the Industrial Court in declining to
stay the transfer cannot be faulted.
24. Mr.Cama further submitted that in the
proceedings relating to the transfer of the
employees from Deonar Unit to Mulund unit, the Union
leaders as well as the employees had specifically
- = : 18 : = -
expressed their willingness to work in any of the
establishments of the Company including the Unit at
Madhya Pradesh. Therefore, it is not open to the
employees to blow hot and cold and contended that
the service conditions do not permit the Company to
transfer the employees to Baddi.
25. Mr.Cama further submitted that 100% of
the Plant & Machinery from the Mulund Unit has
already been shifted to Baddi, however, the Company
is unable
to obtain the licence, because,
rule 79 framed under the Drugs & Cosmetics Act, 1940
as per
when the concerned officer visits the Unit for the
purpose of granting licence, it is necessary that
the requisite staff is present. Therefore, it is
essential that these employees must report for duty
at Baddi immediately.
26. Relying upon a Division Bench decision of
this Court in the case of Biddle Sawyer Limited V/s.
Chemical Employees Union reported in 2007 III LLJ
391,
391 Mr.Cama submitted that shifting the place of
manufacturing from one location to another and
discontinuing the manufacture at the former location
does not amount to closure of business. He
submitted that whether to shift the place of
business or not is a commercial decision which can
- = : 19 : = -
be taken exclusively by the Company and the
employees have no say in that behalf. Whether such
discretion exercised by the Company is vitiated by
malafides is a question which the labour Court will
go into in the complaint filed by the Union. As the
Union failed to establish prima facie case of
malafides the Industrial Court was justified in
refusing to grant interim relief to the employees.
27. Referring to the decision of the Apex
Court in the
case of Kundan Sugar
which is strongly relied upon by the counsel for the
Mills (supra)
Union, Mr.Cama submitted that the said decision has
no application to the facts of the present case,
because in that case the transfer was to a new
establishment started by the employer, whereas, in
the present case, the transfer is to a place where
the existing unit is shifted. In this connection,
he relied upon the unreported decisions of this
Court in the case of M/s.Associated Breweries &
Distilleries V/s. Shri Purshottam G. Patil (W.P.
No.1570 of 1994) decided on 21-7-1994 and V.I.P.
Industries Limited V/s. Maharashtra Kamgar
Karmachari Sanghatana (W.P. No.1410 of 2008)
decided on 9-4-2008.
28. Relying upon a decision of the Apex Court
- = : 20 : = -
in the case of National Hydroelectric Power
Corporation Limited V/s. Shri Bhagwan reported in
(2001) 8 SCC 574,
574 and a decision of this Court in
the case of Executive Engineer V/s. Sadashiv D.
Deshmukh reported in 1997 I CLR 68,
68 Mr.Cama
submitted that unless an order of transfer is shown
to be an outcome of malafide exercise of power or
stated to be in violation of statutory provisions
prohibiting any such transfer, the Court should not
substitute its own decision for that of the
management.
the Union /
He submitted that the proper course for
employees was to report for duty at
Baddi without prejudice to their right to challenge
the decision of the Company. In the present case,
the employees have failed to report for duty since
March, 2008 and moved the Industrial Court by filing
a Complaint. Even after the Industrial Court
declined to grant stay, the employees failed to
report for duty at Baddi. In these circumstances,
the employees are not entitled to any relief and the
petition filed by the Union is liable to be
dismissed.
29. I have carefully considered the rival
submissions.
30. The short question to be considered in
- = : 21 : = -
these two writ petitions is, whether the Industrial
Court was justified in holding that, prima facie,
strong case is not made out for staying the transfer
order during the pendency of the Complaint and at
the same time direct the Company to accommodate 7
employees in other establishments of the Company at
Mumbai / Thane region.
31. Taking up the petition filed by the
Company to challenge the decision of the Industrial
7 employees in
Court to the extent it directs the Company to absorb
its other establishments in the
Mumbai / Thane region, it is pertinent to note that
the Company has not pressed its case against one
permanent employee who is due to retire in the first
week of July, 2008. In respect of the remaining 6
permanent employees, the Industrial Court has
directed the Company to absorb them in its
establishments in the Mumbai / Thane region on the
ground that out of the six employees, three are lady
members who have put in more than 35 years of
service and the remaining three employees are heart
patients. The fact that the three lady employees
have put in more than 35 years of service, cannot be
a ground to stay their transfer. Nowhere, in the
service conditions of these employees it is stated
that they would not be transferred on completion of
- = : 22 : = -
35 years of service. Moreover, the type of
difficulties faced by the three lady members which
could be said to be exceptional circumstances so as
to stay their transfer have not been elucidated in
the impugned order. As per the service conditions,
it was not obligatory on the part of the company to
provide accommodation at the transferred place.
However, in the present case, the Company has
offered temporary accommodation to these employees
at Baddi. In these circumstances, the transfer
could not
have been stayed on the ground that
Company has not provided guaranteed accommodation.
the
32. Similarly, in the case of three employees
who are said to be heart patients, the Industrial
Court has directed the Company to absorb them in
other establishments in the Mumbai / Thane region
without discussing the type of their sickness and
without recording any finding as to why they could
not be transferred. In the absence of any finding
that it was not medically feasible to transfer these
three employees to Baddi, the decision of the
Industrial Court to the above effect cannot be
sustained.
33. In the result, the direction to absorb
the employees in other establishments of the Company
- = : 23 : = -
in the Mumbai / Thane region, except in the case of
one employee who is due to retire in the first week
of July, 2008 is quashed and set aside.
34. The question now to be considered is
whether the Industrial Court was justified in
holding that no prima facie case of malafides has
been established so as to decline stay of the
transfer order during the pendency of the Complaint?
35.
Counsel
The
principle argument canvassed by
for the Union is that as per the clause
the
in
the service conditions the Company could not have
transferred the employees from Mulund unit to Baddi
in H.P. and, therefore, the transfer order suffers
from legal malafides. The transfer contained in the
appointment letter of these 26 employees contained a
clause which reads thus :-
"Transfer : You should note that your
service will be subject to inter-
departmental or inter-establishment
transfers temporarily or permanently,
without any additional remuneration or
compensation, depending upon the
exigencies of work, of which the
management will be the sole judge."
From the aforesaid clause, it is clear
that the Company could transfer the employees
inter-departmentally or from one establishment to
- = : 24 : = -
another establishment. The question is, whether
shifting the plant and machinery from Mulund to
Baddi and consequently transferring the employees to
Baddi constitutes transfer from one establishment to
another establishment ?
36. Where the Plant & Machinery in an
establishment are shifted from one place to another,
it would not be a case of establishing a new unit
but a case of shifting the existing unit to a new
place.
but
In other words, the existing unit continues
at a new place. In such a case, actually there
is no transfer but only shifting the employees to
the place where the existing Unit has been shifted.
Therefore, the argument of the Union that the
transfer constitutes transfer to a new establishment
set up after they were employed cannot be accepted.
Once it is held that the transfer is to the existing
unit but at a new place, then such a transfer, would
prima facie be covered by the aforesaid service
conditions.
37. Strong reliance was placed by the counsel
for the Union on the decision of the Apex Court in
the case of Kundan Sugar Mills (supra) and various
other decisions of this Court where the aforesaid
decision of the Apex Court has been followed. In my
- = : 25 : = -
view, all those decisions are distinguishable on
facts. In the case of Kundan Sugar Mills (supra)
while continuing with the Sugar Mill at Amroha, the
employees working therein were sought to be
transferred to the new sugar mill started at
Bulandshahr. In that context, the Apex Court held
that in the absence of either express or implied
condition of service, the employer cannot transfer
the employees to a new concern started by him
subsequent to the date of their employment. In the
present
machinery
case,
has
igadmittedly
been
100% of
shifted from
the
Mulund
plant
Unit
and
to
Baddi. Prima facie, shifting the Mulund Unit to
Baddi would not constitute establishing a new Unit
but it would be a case of transferring the employees
to a place where the existing unit is shifted.
Therefore, the facts in the case of Kundan Sugar
Mills (supra) being totally different the said
decisions would have no application to the facts of
the present case. Similarly, in none of the
decisions of this Court wherein the aforesaid
decision of the Apex Court have been followed, the
entire Unit has been shifted to a new place. In
fact, in all those cases while continuing with the
existing Unit wholly or partially, the employees
were directed to report for duty at the newly
established Unit, whereas in the present case, the
- = : 26 : = -
Unit as a whole has been shifted to Baddi.
Therefore, various decisions of this Court relied
upon by the Counsel for the Union are
distinguishable on facts.
38. The question, however, to be considered
is, whether the commercial decision taken by the
Company to shift the Mulund Unit to Baddi was a
bonafide decision and whether the said decision
constituted unfair labour practice is a question
required
complaint
to
filed
be
ig gone into at the
by the Union.
hearing
Prima facie,
of the
the
decision of the Company to shift the Unit to Baddi
does not appear to be vitiated by malafides. The
argument that the Company was running in profit and
the argument that the Company could achieve the
enhanced production at Mulund Unit would not be
sufficient to arrive at a conclusion that the
decision to shift the Unit is vitiated by malafides.
Because, even if the Unit was running in profit, it
was open to the Company to arrive at a bonafide
conclusion that utilisation of the plant to its full
capacity would be economically viable at Baddi than
at Mulund. Therefore, merely on the basis of the
argument that the Unit was running at a profit and
that the plant could be used to its full capacity at
Mulund, it cannot be inferred that the shifting of
- = : 27 : = -
the Unit was vitiated by malafides. It is open to
the Union to lead evidence before the Industrial
Court at the hearing of the Complaint and establish
that the decision to shift was in fact a decision to
close the existing unit and establish a new unit at
Baddi. In the absence of any statutory /
contractual obligation, the argument of the
employees that the Company has failed to give
additional emoluments to the transferred employees
cannot be accepted.
39. The
argument that in view of the
statement made on oath while transferring these
employees from Deonar Unit to Mulund Unit, the
Company was bound to retain these employees at the
Mulund Unit cannot be accepted, because, over the
years if the Company bonafidely considers it
necessary to shift the Unit due to business
exigencies, then it cannot be said that because of
the statement made in the year 2000, the Company
cannot shift the employees in the year 2008 to the
place where the existing unit is shifted.
40. The contention that in view of the order
passed by this Court on 19-1-2004 in the earlier
proceedings, the Company ought to have taken
permission before transferring the employees to
- = : 28 : = -
Baddi is also without any substance because the said
order applies only in case of closure of Mulund
Unit. As seen earlier the Mulund unit has not been
closed but only shifted and, therefore, the order
passed by this Court on 19-1-2004 has no relevance
in the present case.
41. Similarly, the argument that the decision
to shift the unit is a colourable exercise of power
and various decisions relied upon by the Counsel for
the
and unwarranted
Union to show that the transfer is unreasonable
need not be adverted to at this
stage because, all those questions would arise only
at the final hearing of the Complaint. All that is
required to be looked into at this stage is, whether
the decision to shift the Mulund Unit to Baddi is
ex-facie bad in law or vitiated by malafides ? In
my view there is no such case made out and,
therefore, the Industrial Court was justified in
declining to grant interim relief to the Union.
42. However, the fact to be noted is that the
Company has admittedly discontinued the technical
staff who were engaged in the Mulund Unit on
contract basis for all these years. As per Rule 79
framed under the Drugs & Cosmetics Act, 1940, it is
the technical staff who are required to be present
- = : 29 : = -
at the time when the authorities inspecting the unit
for grant of licence to manufacture 'Haemaccel' at
Baddi. It is contended on behalf of the Company
that although the services of the technical staff
engaged in the Mulund Unit have been discontinued
they have sufficient technical staff already working
in the Baddi establishment and those technical staff
can be employed in the shifted unit. If that be so,
nothing prevented the Company from engaging the said
technical staff and seek manufacturing licence from
the Competent authority at Baddi.
43. As the Company has admittedly not
obtained the requisite manufacturing licence so far
at Baddi but is ready to pay the wages to the
employees even though the unit is operational,
provided the employees report for duty at Baddi, in
my view, considering totality of circumstances it
would be just and proper to direct the Company to
engage the technical staff and obtain requisite
manufacturing licence as expeditiously as possible.
As soon as the licence is granted by the Competent
authority, the Company shall intimate the same to
the Union. Thereupon, the employees within 15 days
of receiving the above intimation shall report for
duty at Baddi. Till such time, that is, till the
intimation is received by the Union from the Company
- = : 30 : = -
regarding the acquisition of manufacturing licence
and 15 days thereafter the Company shall pay the
wages including the arrears of salary to these
employees. It is made clear that the employees will
be entitled to the temporary accommodation which was
offered by the Company. Obviously, the Company will
not be required to pay the wages to these employees
if they fail to report for duty at Baddi within 15
days of the Union receiving the intimation from the
Company regarding the grant of manufacturing
licence.
44. In the result, Writ Petition No.3505 of
2008 filed by the Company is allowed and the
direction given by the Industrial Court to the
Company to absorb the employees in other
establishments of the Company in Mumbai / Thane
region is quashed and set aside, except in the case
of one employee who is due to retire in the first
week of July, 2008.
45. Writ Petition No.1304 of 2008 filed by
the Nicholas Employees Union is dismissed. However,
the employees are directed to report for duty at
Baddi within two weeks from the date the Company
intimates to the Union that the licence to
manufacture Haemaccel at Baddi has been granted by
- = : 31 : = -
the competent authority. Till that time, that is
upto the date of intimation and two weeks thereafter
the Company shall pay the wages including arrears to
these employees. On the employees reporting for
duty at Baddi, the Company shall provide temporary
accommodation to the employees as already proposed
by the Company.
46. The Industrial Court is directed to
dispose of the Complaint (ULP) No.118 of 2008
expeditiously
three months
and preferably within a
from the date of receiving a copy
period of
of
this order.
47. Both the Writ Petitions are disposed of
accordingly with no order as to costs.
(J.P. DEVADHAR, J.)
