Case: Swadesamitran Limited, Madras Vs. Their Workmen

the preferential treatment given to juniors ignores the well recognised principles of industrial law of first come last go without any acceptable or sound reasoning a tribunal or an adjudicator will be well justified to hold that the action of the management is not bona fide. We do not see how either of the two propositions set out in this judgment can support the appellants argument before us. The position under the industrial law seems to us to be fairly clear.The management has the right to retrench the workmen provided retrenchment is justified. In effecting retrenchment the management normally has to adopt and give effect to the industrial rule of retrenchment. For valid reasons it may depart from the said rule. If the departure from the said rule does not appear to the industrial tribunal as valid or satisfactory, then the action of the management in so departing from the rule can be treated by the tribunal as being mala fide or as amounting to unfair labour practice; in other words, departure from the ordinary industrial rule of retrenchment without any justification may itself, in a proper case, lead to the inference that the impugned retrenchment is the result of ulterior considerations and as such it is mala fide and amounts to unfair labour practice and victimisation. That is precisely what this Court has held in the case of J. K. Iron and Steel Co. Ltd. C. A. No. 266 of 1958, D/- 11-2-1960. We are, therefore, satisfied that there is no substance in the appellants contention that the tribunals below have exceeded their jurisdiction in enquiring into the validity of the retrenchment of the 39 workmen in question.12. There is one more point which may briefly be mentioned in this connection. After the matter was remanded the industrial tribunal has carefully considered the evidence given by the appellant. In fact it is clear from the record that at the original enquiry no evidence has been led by the appellant to justify the departure from the rule even though it was conceded that the rule had not been followed. The Labour Appellate Tribunal, therefore, fairly gave a chance to the appellant to justified the said departure, and accordingly evidence was led by the appellant. This evidence consists of the testimony of Mr. Lakshminarasimhan, who has been working with the appellant for 32 years. He works as an Assistant Editor, and in addition attends to press work. He stated that he was having a personal supervision of the entire work and that when retrenchment was actually effected a committee was appointed consisting of himself, the Manager Mr. Ayyangar and the Press Manager Mr. Rajagopala Ayyangar. At the time of the enquiry the Manager was dead. According to the witness the committee took the advice of the Foremen of various sections in deciding which workmen should be retained and which should be retrenched. The witness gave evidence about the defects in the cases of the 39 workmen who were retrenched; and in support of his oral testimony he filed two statements T-1 and T-2 giving material particulars in respect of all the said workmen. It is admitted that no records were made at the time when the cases of these workmen were examined, and so the witness was driven to give evidence merely from memory. The tribunal has held that having regard to the nature of the defects attributed to the several workmen to which the witness deposed it was impossible to accept his testimony as satisfactory, and the tribunal was also not satisfied that it was likely that the witness should have any personal knowledge in regard to the said defects. In the result the tribunal rejected this testimony. It also examined some cases in detail, and it was satisfied that the reasons given for retrenching them were demonstrably unsatisfactory. It is on these findings that the tribunal came to the conclusion that the appellant had not shown any valid or reasonable ground for departing from the usual rule, and this finding has been accepted by the Labour Appellate Tribunal. In such a case we do not see how in the present appeal the appellant can successfully challenge the correctness of the conclusion that in substance the retrenchment of the 15 workmen amounts to an unfair labour practice and victimisation.13. That leaves two minor questions which were formulated for our decision by the learned Attorney-General. He contended that, even if the impugned retrenchment of the 15 workmen in question was not justified, reinstatement should not have been directed; some compensation instead should have been ordered; and in the alternative he argued that the order directing compensation to the remaining 24 retrenched workmen was also not justified. We do not see any substance in either of these two contentions. Once it is found that retrenchment is unjustified and improper it is for the tribunals below to consider to what relief the retrenched workmen are entitled. Ordinarily, if a workman has been improperly and illegally retrenched he is entitled to claim reinstatement. The fact that in the meanwhile the employer has engaged other workmen would not necessarily defeat the claim for reinstatement of the retrenched workmen; nor can the fact that protracted litigation in regard to the dispute has inevitably meant delay, defeat such a claim for reinstatement. This court has consistently held that in the case of wrongful dismissal, discharge or retrenchment, a claim for reinstatement cannot be defeated merely because time has lapsed or that the employer has engaged fresh hands (Vide : The Punjab National Bank Ltd. v. The All-India Punjab National Bank Employees Federation, Civil Appeals Nos. 519 to 521 of 1958, D/- 24-9-1959 : (AIR 1960 SC 160 ); and National Transport and General Co. Ltd. v. The Workmen, Civil Appeal No. 312 of 1956, D/- 22-1-1957). Then as to the compensation awarded to the 15 and 24 workmen respectively, it is a matter of discretion and as such is not open to challenge in the present appeal.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]It is in regard to this aspect of the matter that the appellants bona fides have no doubt been found; but the bona fides of the appellant in coming to the conclusion that 39 workmen had to be retrenched have no material bearing nor have they and relevance in fact with the question as to whether the appellant acted fairly or reasonably in selecting for retrenchment the 39 workmen in question. It is in regard to this latter aspect of the matter that concurrent findings have been recorded against the appellant that it acted without justification and the retrenchment of the 15 workmen in question amounts to an unfair labour practice.Therefore, it is not possible to accept the argument that there is any inconsistency in the two findings. They deal with two different aspects of the matter and so they cannot be said to conflict with each other atought to add that the same principle has now been statutorily recognised by S. 25-G of the Act.This section provides inter alia that where any workmen in an industrial establishment, who is a citizen of India, is to be retrenched, the employer shall ordinarily retrench the workmen who was the last person to be employed in the same category, unless for reasons to be recorded, the employer retrenches any other workman; in other words, by this section a statutory obligation is imposed on the employer to follow the rule, and if he wants to depart from it to record his reason for the saidwith the argument of the appellant that the order of retrenchment, should be left to the management and that the decision by the management that some employees are better qualified than others should not be questioned by the adjudicator unless he came to the conclusion that the preferential treatment was deemed to be mala fide, this Court observed that the proposition involved in the argument was unexceptionable, but it was added that, if the preferential treatment given to juniors ignores the well recognised principles of industrial law of first come last go without any acceptable or sound reasoning a tribunal or an adjudicator will be well justified to hold that the action of the management is not bona fide. We do not see how either of the two propositions set out in this judgment can support the appellants argument before us. The position under the industrial law seems to us to be fairly clear.The management has the right to retrench the workmen provided retrenchment is justified. In effecting retrenchment the management normally has to adopt and give effect to the industrial rule of retrenchment. For valid reasons it may depart from the said rule. If the departure from the said rule does not appear to the industrial tribunal as valid or satisfactory, then the action of the management in so departing from the rule can be treated by the tribunal as being mala fide or as amounting to unfair labour practice; in other words, departure from the ordinary industrial rule of retrenchment without any justification may itself, in a proper case, lead to the inference that the impugned retrenchment is the result of ulterior considerations and as such it is mala fide and amounts to unfair labour practice and victimisation. That is precisely what this Court has held in the case of J. K. Iron and Steel Co. Ltd. C. A. No. 266 of 1958, D/- 11-2-1960. We are, therefore, satisfied that there is no substance in the appellants contention that the tribunals below have exceeded their jurisdiction in enquiring into the validity of the retrenchment of the 39 workmen insuch a case we do not see how in the present appeal the appellant can successfully challenge the correctness of the conclusion that in substance the retrenchment of the 15 workmen amounts to an unfair labour practice anddo not see any substance in either of these two contentions. Once it is found that retrenchment is unjustified and improper it is for the tribunals below to consider to what relief the retrenched workmen are entitled. Ordinarily, if a workman has been improperly and illegally retrenched he is entitled to claim reinstatement. The fact that in the meanwhile the employer has engaged other workmen would not necessarily defeat the claim for reinstatement of the retrenched workmen; nor can the fact that protracted litigation in regard to the dispute has inevitably meant delay, defeat such a claim for reinstatement. This court has consistently held that in the case of wrongful dismissal, discharge or retrenchment, a claim for reinstatement cannot be defeated merely because time has lapsed or that the employer has engaged freshas to the compensation awarded to the 15 and 24 workmen respectively, it is a matter of discretion and as such is not open to challenge in the present appeal.