1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION Writ Petition No. 1284 of 2008 Borosil Glass Works Ltd. Employees Union a registered Trade Union having his office at 4, Vakola Dhavalgiri Datta Mandir Road, Vakola Bridge Santacruz (East), Mumbai 400 0551 ..Petitioner vs. 1. Borosil Glass Works Limited Khanna Construction House 44, Dr.R.G.Thadani Marg, Worli, Mumbai 400 018 2. Shri P.K.Kheruka Vice Chairman and Managing Director Borosil Glass Works Limited Khanna Construction House 44, Dr.R.G.Thadani Marg, Worli, Mumbai 400 018 3. Shri S.D.Sharma Sr.General Manager, HRD & Persoonel Borosil Glass Works Limited Khanna Construction House 44, Dr.R.G.Thadani Marg, Worli, Mumbai 400 018 ..Respondents Mr.Deshmukh with Mr.R.D.Bhat for petitioner. 2 Mr.C.U.Singh, Sr.Counsel with Mr. R.N.Shah i/b M/s Udeshi and Co. for respondent no.1. Mr.S.C.Talsania, Sr.Counsel with Mr.M.Londhe for respondent nos.2 and 3. Judgment Reserved on 4th June, 2008 CORAM: S.C.DHARMADHIKARI J. 10th JULY, 2008. J U D G M E N T: 1. Rule. Responents waive service. A 35 page interim order of the Industrial Court being impugned and lengthy arguments being canvassed, therefore, this lengthy judgment. The court below lost sight of the salutory principle that a prima facie case is not one which will ultimately succeed but a case which is not such as is apparently barred by a provision of law and in respect of which something can be said in favour of a party approaching the Court. A prima facie case means that there was a bonafide contention between the parties or a serious question to be tried. (see 1979 Mh.L.J. 514 (Inayat Hussain Fakhruddin and 3 another Vs. Union of India and another) and AIR 1981 S.C. 1426. (United Commercial Bank Vs. Bank of India and others.) 2. By consent of both sides Rule made returnable forthwith. 3. By this petition under Article 226 of the Constitution of India, the petitioner Union is challenging the order dated 6th May, 2008 in complaint (ULP) no. 161 of 2008. The order under challenge has been passed on the application Exh. U-2 which was preferred by the petitioner Union. The petitioner Union invoked the jurisdiction of the Industrial Court at Mumbai by filing a complaint alleging unfair labour practice under Item 5 of Schedule II and items 3, 9 and 10 of Schedule IV of M.R.T.U. and P.U.L.P. Act, 1971. The above application was filed for interim relief. It is on that application that the impugned order has been passed. 4. The complainant Union, which is petitioner before me, had filed the complaint alleging unfair labour practice in the light of facts set out in the complaint. It is the Union’s case that it is recognized Union in the first respondent Company since 1988. 4 The Union has been settling all differences and disputes through collective bargaining and/or following constitutional machinery. The Union is not only serving the interest of the members but that of other of the company also which is evident from the fact that there is not a single man-day loss on account of any conflict situation. After high lighting this aspect and contending that the company was set up way back in 1966 by one Dr. Lele who had developed his own formulae of manufacturing glass ware by use of Borocylicate glass. It is urged that the same formulae was known as 7740, which is still being used. Subsequently, the company entered into collaboration with M /s Corning Glass of USA. For a period of time M/s Corning Glass incurred some financial liabilities and that is how a settlement was arrived at between M/s Corning Glass and respondent no.1 transferring the shareholdings in 1988 to the present management. It is stated that the company is highly profit making company and known for quality of its products. 5. It is stated that the company is the sole manufacturer in 5 India of low expansion borosilicate glass which is used by it to manufacture a wide variety of scientific, industrial, lighting and consumer wasre items. The company supplies tubing and other products which are used by the small scale down stream processing units to manufacture various finished products like burettes, pipettes, flasks, condensers, ground joints, extractors etc. The entire research and development, industry, education and health segments of the market are major users of scientific and industrial products, whereas consumer ware items cater to the need of domestic sector. The consumer glassware items of the Company have become widely popular not only in India but also abroad. The company exports substantial quantity of its products, especially consumer ware. 6. As at the end of the last financial year the Company had accumulated reserves and surplus to the tune of Rs.57.8 crores as against share capital of Rs.3.6 crores. The gross profit of the Company as of 31st March, 2007 was Rs.11 crores. There have been periodical settlements pursuant to collective bargaining 6 between the Union and the Company concerning wages and other service conditions applicable to workmen of the Compay. The last settlement was signed on 1st March, 2007 and is effective from 1st March, 2007 to 28th February, 2011. 7. It was contended that the company has a factory at Marol which is known as Marol Works. The company introduced new production/productivity and incentive bargain plan at these works. The plan is known as equivalent test tube payment (ETT for short). The ETT payment is in addition to the basic incentive. After referring to the earlier settlement and broad features of ETT payment, it is urged that this scheme is continued with some modifications from time to time and even under the latest settlement referred to above. As per ETT scheme the entire finished factor is taken into account for the purpose of calculations. The payment is made on 20th of every month. Every workman irrespective of nature of his work is entitled to such payment. The payment is the same for every workman working in a particular grade. After referring to the earlier proceedings regarding the 7 scheme, it is contended that the scheme was worked out on the basis of revised proposal. The other demands and issues were discussed and at that time even the ETT payment issue was sortted out. Thereafter both sides decided to withdraw the related litigation pending in Court. 8. It is urged that one settlement dated 1st February, 2000 was to remain in force for a period of four years upto 31st January, 2004. The Union terminated the settlement by letter dated 30th November, 2003 and submitted a fresh charter of demands on 15th January, 2004. During the course of discussion on the said charter of demands, the Company also raised several issues. It is contended that the issue raised was that there is general global recession and with liberalization of Imports and reduced duty, imported glass products are readily available in the market which badly affects the first respondent’s market position. In today’s industrial scenario down sizing and costs reduction is the order of the day. Many companies and multi national Corporations have come out with V.R.S. as part of their trading and costs reduction 8 strategy. The global competition is almost in every field as growing costs sconcern many running industries/manufacturing companies. Some of them had to close down rendering thousand of people jobless. Stating thus, the company raised the issue of Voluntary Retirement. It is stated that it is desirous of proposing a scheme in that behalf. In this situation, negotiations had to be undertaken in details. Therefore, there was a delay of 3 years in arriving at the last settlement. It is stated that though latest statement is comprehensive, some of the terms and conditions of the earlier settlement continued to bind the management and Union. This settlement takes into account all relevant aspects. The complainant highlighted the clauses in the settlement and more particularly clause 9.4. It is alleged that the company and Union were required to implement the settlement without any material changes. Unless the changes were agreed between the parties by collective bargaining, there was no question of settlement terms being changed unilaterally. In para 3.8.1 it was alleged that the first respondent has committed unfair labour practice under item 5 9 of Schedule II. After referring to clauses 2.1, 2.2 and 2.3 of the settlement dated 1st March, 2007 so also further clauses it was stated that the company forwarded a purported V.R.S. to the Union. There are no negotiations between the Union and the first respondent after the settlement dated 1st March, 2007. Therefore, it is alleged that there was no warrant of introducing the V.R.S. hardly within six weeks from the date of settlement. The Union, therefore, by its letter dated 8th May, 2007 stated that though the issue of V.R.S. was raised by the company, it was mutually recognized that the same is not relevant in the light of the comprehensive settlement that was negotiated and discussed. The Union’s stand was that the V.R.S. is not a matter of discussion and negotiations. After the settlement was arrived at the issue of VRS is given up and, therefore, no scheme can be introduced during the period of latest settlement. 9. Para 3.8.3 to 3.8.5 of the complaint reads thus: “3.8.3: In subsequent Joint Meeting dated 28th December, 2007 the Company raised 10 issue of shifting/relocating Cold End operations. The Union raised queries as to the necessity of anysuch relocation of an important production department of the company employing 135 workmen out of a total of 366 workmen. The Company replied by a letter dated January 25, 2008 to the Union once again raising the same circumstances which were considered at the time of signing of the Settlement dated 1st March, 2007 viz. Marol Plant being surrounded by residential building, restriction in expansion of industries, especially hazardous industries in Mumbai and liberalized import permitted by the Government as part of globalization drive resulting in cut throat competition etc. Even during the initial discussion the Union had objected to any such relocation of Cold End department when Respondent no.2 held out a threat of termination of the services of the employees. The said letter dated January 25, 2008 of the company was responded by the Union by their letter dated 1st March, 2008. 11 The threat held out by the Company has been recorded in the said letter. It was also pointed out that the Company intended to and had initiated measures towards closure of Marol factory so that the Company's land and other property will be available for sale to make monetary gains in view of unprecedented rise in land prices in Mumbai. The Union also pointed out that any such measures on the part of the Company would amount to failure to implement lSettlement dated 1st March, 2007 and amounts to unfair labour practice under Item 9 of Schedule IV of the Act. It was also pointed out that provisions of Chapter V-B are applicable to the Company and provisions of Section 25, more particularly, Section 25-N and 25-O are applicable to the Company. As far as VRS is concerned, theUnion stated that the low- wage employees should not get less than Rs.12 lakhs and others to get proportionately higher amounts in the event the Company insisted upon implementing VRS. Above all, it was pointed out that any shifting/relocating 12 of Cold End Department would disturb the manpower structure and adversely affect incentive payment rate and considerable actual earning resulting from failure to implement the ETT scheme. 3.8.4. : There are mainly two production departments viz. “Hot End' and ' Cold End'. “Hot End” Department manufactures products which are mainly produced by blowing into molten glass. Glass tubes are also manufactured in that department. Glass tubes so manfuactured are subsequently processed in the “Cold End” department according to the market requirements. The glass tubes are cut by internal machinery. The tubes are thereafter loaded on the external machine. Glass beaker, patromax, test tubes etc. are manufactured in the 'Cold end' department also manufactures lamps on Lamp Working Table, condensers, auto duretts, hot plates etc. After the job is ready annealing is done. There are several other processes carried out in the Cold End 13 department whereafter the products are treated as com,pleted and are packed. 3.8.5: ETT Scheme is Equivalent Test Tube provides for incentive payment as stated hereinabove. In other words a Test Tube of the dimension of 12 x 75 mm is considered as standard unit to calculate ETT payment. For this purpose only the products which are completed and packed are taken into account. Shifting of entire Cold End deartment out of the present manufacturing facility at Marol would mean that the entire production from Cold End department will come to an end which will completely affect the incentive payment of all the workmen who will continue to be working in Marol ifthe cold End department is relocated in Bharuch as proposed bythe Company. By shifting entire production department the comprehensive Settlement dated 1st March, 2007 will be totally disturbed. Thus, the company will be failing to implement Settlement dated 1st March, 2007 amounting 14 to unfair labour practice under item 9 of Schedule IV of the Act.” 10. The company in reply to the Union’s letter stated that the Union has taken “U” turn in respect of V.R.S. It is alleged that the Union is trying to correlate the V.R.S. with the process of shifting. The V.R.S. is not germane to that issue. The company denied that there was any breach of section 25-N or section 25-O of the Industrial Disputes Act, 1947. The company again reiterated the same problems which were taken into account at the time of sanctioning of the settlement dated 1st March, 2007. 11. The company denied that the factory at Marol was integranted and that shifting of cold end department and consequent transfer of employees of the said department would change or adversely affect the service conditions. The company denied that proposed shifting would violate the settlement dated 1st March, 2007. 12. The Union thereafter alleged in the complaint that the company is contemplating drastic reduction in the work force at its 15 Marol plant. The company has not set up any facilities whether the work presently done in the said department can be continued. The company is threatening the workmen with the termination of service if they do not accept the transfers. Thus, the company has used force and coercion on the workmen and are compelling them to accept the transfer or some nominal amount by way of V.R.S. The entire efforts on the part of the company is to reduce the work force which will result in large scale retrenchment without following the procedure laid down under sec.25-N of the Industrial Disputes Act, 1947. This amounts to unfair labour practice under items 9 and 10 of Schedule IV of the M.R.T.U.and P.U.L.P.Act, 1971. 13. The Union alleged that proposal of shifting was implemented by the company arbitrarily by relocating and shifting of cold end department. This is nothing but closure of the said cold end department in Mumbai. It was stated that even if the company starts fresh cold end department in Bharuch, still, that would attract the definition of closure under the Industrial Disputes Act. There is closing down of the place of employment or a part 16 thereof. It is alleged by the Union that the company is required to comply with the provisions of Chapter V-B of the Industrial Disputes act in order to reduce the work force at Marol and/or close the cold end department functioning at Marol. The provisions in the said chapter are part of service conditions of the workmen. Hence, the proposal of relocating this cold end department amounts to failure on the part of the company to implement the settlement. This is unfair labour practice under item 9 of Schedule IV of the M.R.T.U.and P.U.L.P.Act, 1971. 14. Thereafter it is alleged that before the Union could respond to the company’s letter dated 1st March, 2008, the Company put up a notice dated 12th March, 2008 stating therein that 135 workmen whose names are set out at annexure to the letter working in cold end department are transferred from Marol to Boridra in State of Gujarat. The transfer order is annexed to the complaint as Annexure I. Thus, it is alleged that the company unilaterally proceeded with implementing its proposal to shift/relocate the department without collective bargaining. This is 17 a major issue. The company should have discussed it with the recognized Union, more particularly, in the light of the comprehensive settlement dated 1st March, 2007. In these circumstances there is unfair labour practice committed under item 5 of Schedule III of the Act. 15. It was alleged that the company’s plan to shift/relocate its unit at Marol on account of Govt. policy and compelling events trasnpired at Delhi is nothing but trying to justify the illegal act. The company has not taken permission from the Govt. to close down the department. The Union alleged that despite addressing letters dated 17th March, 2008 to hold negotiations, the company refused to do so. Instead it is illegally transferring 135 employees from Mumbai to Boridra, Bharuch under the guise of following management’s policy. This is malafide. The company has referred to clause of transferability mentioned in the appointment letter. However, it is alleged that the said clause is of no assistance. The company has no other factory except in Tamil Nadu. The factory at Tamil Nadu was purchased in the year 1995. Today the company 18 has proposed to set up the manufacturing activities at Boridra. The matter is at the proposal stage. There is no production facility at the address mentioned in the transfer order. Besides this the transfers can be done only in case of exigency of work, which is temporary in nature. The present decision/proposal to shift the entire department cannot be justified in terms of the above referred clause of the appointment letter. In such circumstances there is unfair labour practice in terms of item 3 of Schedule IV of the MRTU and PULP Act, 1971. The Union expressed its willingness to work and continue to work in cold end department at Marol as per the comprehensive settlement. However, it was aggrieved by the transfer of 135 workmen out of total 366 workmen and termed it as drastic reduction of work force. It also alleges that shifting of this department is indication that the company is ultimately closing down the factory at Marol. The company does not want to abide by the procedure prescribed by law. In these terms it is alleged unfair labour practice under item 10 of Schedule IV of the MRTU and PULP Act, 1971. The 19 allegations in that behalf are set out in para 3.9.3. After the usual clauses, the Union prayed for the following relief:- “(i) That this Hon' ble Court be pleased to hold and declare that the Respondents are engaged in unfair labour practice in terms of Item 5, Schedule II and Items 3, 9 and 10 of Schedule IV of MRTU and PULP Act, 1971 (ii) That this Hon' ble Court be pleased to direct the respondents to cease and desist from engaging in and continuing to engage in the unfair labour practices mentioned above. (iii) That by way of affirmative action to quash and set aside orders of transfer issued to 135 workmen whose names are mentioned in Annexure I to notice dated March 12, 2008 (Annexure F) hereto. (iv) Pending hearing and final disposal of this complaint, - 20 (a) to direct the respondents not to act in any manner in furtherence of transfer orders dated 12th March , 2008 issued to 135 workmen. (b) to direct the respondents to continue to permit the concerned employees to report for work, not to close down Cold End Department and to work and shift machinery at its Marol factory and pay them wages as per their entitlement. (c) Ad-interim reliefs in terms of prayer clause (iv) (a) and (b) above. (v) for costs of the complaint. (vi) for such other and further reliefs that this Hon'ble Court may deem fit and proper under the facts and circumstances of this case. '' 16. It is in the backdrop of the above allegations in the complaint that the Union applied for interim/ad-interim relief. It invoked the jurisdiction of the Industrial Court under section 30(1) 21 of the MRTU and PULP Act, 1971. It prayed for the direction not to act in furtherance of the transfer order dated 12th March, 2008 issued to 135 workmen and further the company should be directed to permit these workmen to report for work at cold end department at Marol. The company be directed not to close down this department but allow the concerned workmen to work there and pay them wages as per their entitlement. 17. The company was duly served with the papers and proceedings. It filed its reply to the application for interim relief. It alleged that the complaint is not maintainable in as much as there is no unfair labour practice committed much less under the items referred to in the complaint. The complainant desires that the Court should interfere in the management functions and decisions which are taken in the interest of business and for the reasons set out in the notice dated 12th March, 2008. The company denied that there is any clause in the settlement dated 1st March, 2007 which prohibits transfer of employees from one place to another and/or shifting the department from Mumbai to any other place. It stated 22 that shifting of units or undertakings from one place to another while protecting the employment of the concerned workmen does not amount to “closure” as envisaged by section 2(cc) of the Industrial Disputes Act, 1947. It is only when the termination of service is effected that it constituted closure. In the present case, it is not even the case of shifting of undertaking but shifting of department from Mumbai to Boidra District Bharuch in the State of Gujarat. The shifting is with transfer of workmen but by protection of their wages and service conditions. Therefore, the provisions pertaining to “closure” under the Industrial Disputes act are not applicable. Therefore, the complaint deserves to be dismissed. Further there is a specific provision in the appointment letter which would demonstrate that the services of the concerned workmen are transferable. The workmen cannot go back on their obligation and approbate and reprobate in this manner. It was alleged that the final relief cannot be sought at the interlocutory stage. 18. For all these reasons the company contended that the Union has failed to make out a prima facie case much less strong 23 prima facie case. It urged that the balance of convenience is also not in favour of the Union but the company and it will suffer grave harm and irreparable loss and damge if the interim relief is granted. 19. The stand of the company appears to be that Marol plant is situated in thickly populated residential zone having high rise buildings. The company is facing enormous pressure and rapidly escalating costs at this location. It is unable to expand the factory. Further, on account of Government policy prices have to be dropped with a view to maintain the market share. Therefore, on account of rising costs manufacturing process at the present location, is not possible. This pressure on price in likely to continue intensely in future. Further, there is total ban on expansion of hazardous industries within Mumbai city limits. Therefore, expansion is not possible. There are also further constraints in as much as fuel costs, increasing electricity charges, lack of constant supply of natural gas at reasonable rate, location disadvantages, high production costs which rule out the 24 possibility of any expansion in the manufacturing facility at Marol. In such circumstances, the company took a decision to shift the cold end department.