Case: Workmen Of Dahingeapar Tea Estate Vs. Dahingeapar Tea Estate

staff of Dahingeapar Tea Estate. The Industrial Tribunal answered this question in favour of the workmen and made necessary directions as to re-instatement and payment of salary for the period of forced unemployment. On what findings did the Industrial Tribunal so answer the main question? It found that (a) the tea estate was sold as a running or going concern, with a reservation as to employment of members of the staff; (b) that all the manual labourers as distinguished from members of the staff were continued in employment to their previous terms with continuity of service; (c) three members of the staff also were continued in employment but as new recruits, without continuity of service; and (d) there were no trade reason or reasons of efficiency etc. for which the remaining 18 or 19 members of the staff were not taken. The Tribunal said : - "It was nobodys case that those members of the staff were guilty of any breach of the services conditions or rules or of any misconduct for which their services were liable to be terminated forthwith or for which they could be deprived of their right of service and of the continuity of their service in the estate concerned in which they were so long serving without any fault." During the conciliation proceedings the respondents made its position quite clear that it was willing to take 12 members of the staff out of the then existing 16 members on their old scales of pay, but only as new comers on formal petitions for appointment. In other words, the respondent insisted on two conditions; (a) the old members of the staff must make fresh applications and (b) they must come in as new entrants, thereby losing their continuity of service and such other rights as they might have acquired as to gratuity, bonus etc. The Tribunal held that these were unreasonable conditions and further observed : "In the instant case, the incoming management proposed to disturb the staff members only and not the labour force of the garden. Nothing else would tend to create unrest more than such discrimination would." 19. On the aforesaid findings arrived at by the Industrial Tribunal it had jurisdiction to make the order it did, irrespective of any purely legal question as to whether there was any contractual relation of employer and workmen between the respondent and the discharged members of the staff. The Appellants Tribunal did not displace any of the findings arrived at by the Industrial Tribunal, but approached the two questions for adjudication as abstract questions of law - which, in our view, was a fundamentally wrong approach, though the President said in one part of his judgment that an Industrial Tribunal has nothing to do with the decision of an abstract question of law. The President proceeded mainly on this basis: the services of the workmen were terminated by the old management by proper notice, and as they did not, except a few, apply for fresh appointment on the new terms and conditions, there was no contract of service, enforceable in law, between the workmen and the two managements in question. This line of reasoning overlooked two essential circumstances; one was that the notice of discharge was given by the outgoing management during the dispute and pendency of conciliation proceedings and was hit by S. 33 of the Act, and the other was that in spite of the notice all the members of the staff were allowed to continue in service till 4-1-1954. The third circumstances was that the Industrial Tribunal found that the conditions which the incoming management sought to impose were intended to discriminate between workmen and most likely to create industrial unrest. The clause in the memorandum of agreement or the sale deed which gave the respondent a discretion to employ or not employ members of the staff or to give them fresh employment was indeed found by the Appellate Tribunal to be a bona fide clause as between the vendor and purchaser; but the question before the Industrial tribunal was as to how it would operate against the workmen in the context of the industrial dispute referred to it for adjudication. In the circumstances of the present case the Industrial Tribunal found that it operated to their prejudice, and we are not satisfied that the Appellate Tribunal has given cogent reasons for going behind that finding. 20. There was a difference between the two members of the Appellate Tribunal as to whether the discharged members of the staff were entitled to retrenchment compensation or not from the outgoing management. In the view which we have taken, that question is no longer relevant. 21. A number of points were discussed and a number of decisions of High Courts and Labour Courts were cited at the bar on the question whether on a transfer of business as a going concern, the incoming management becomes a successor to the outgoing management; and in so, to what extent the incoming management must recognise the rights of labour already accrued as to gratuity, bonus etc., and continuity of service of such labour of such labour as was employed by the outgoing management. In the view we have taken on the facts of this case it is not necessary for us, on this occasion, to express any opinion on those questions or pronounce any opinion on the correctness of any of those decisions. 22. We prefer to base our decision in this case on this short ground; there was an industrial dispute which was referred to the Industrial Tribunal for adjudication; the reference being competent, the Industrial Tribunal had jurisdiction to make an adjudication and in doing so it could exercise all its functions under the Act, and in the exercise of those functions it came to certain findings on the facts of the present case on which it had jurisdiction to make the order it did; it Appellate Tribunal did not displace those findings of the Industrial Tribunal.

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

Explanation:
1[ds]In the case before us as between the vendor and the discharged workmen, the latter came within the definition of workmen as they were discharged during the pendency of conciliation proceedings. This fact did not, however, make them workmen of the purchaser. Even then they were persons in whose employment or non-employment the actual workmen of the Dahingeapar Tea Estate were directly interested. Therefore, the ratio of the Western India, Automobile Association v. Industrial Tribunal, Bombay, 1949 FCR 321: (AIR 1949 FC 111) (B), as also of the later decision in workmen of the Dimakuchi Tea Estate (supra) applied, and the dispute was clearly an industrial dispute within the meaning of the ActOne of the difficulties in the present case arose out of the somewhat wide and general terms in which question No. 1 was framed. That question consisted of two parts : (i) whether the transfer of management of the Dahingeapar Tea Estate consequent on its sale as a going concern to the respondent put an end to the services of the members of the staff; and (ii) whether any agreement between the buyer and the seller can deprive the members of the staff of their rights of service under the original contracts and disturb their continuity of service. In our opinion, the Industrial Tribunal could not deal with those questions as mere abstract questions of law; and we doubt if they could answer them as such. Much of the controversy in this case, and perhaps a good part of the difference of opinion between the Industrial Tribunal and the Labour Appellate Tribunal and also between the two members of the latter body inter se have arisen by reason of the different standpoints from which question No. 1 has been approached.We do not think that it was necessary, and we go further and say that we doubt if it was the function of the Industrial Tribunal, to decide the abstract question of law whether on a transfer of management consequent on a sale, the services of workmen - be they members of the staff or labourers - are automatically put an end to22. We prefer to base our decision in this case on this short ground; there was an industrial dispute which was referred to the Industrial Tribunal for adjudication; the reference being competent, the Industrial Tribunal had jurisdiction to make an adjudication and in doing so it could exercise all its functions under the Act, and in the exercise of those functions it came to certain findings on the facts of the present case on which it had jurisdiction to make the order it did; it Appellate Tribunal did not displace those findings of the Industrial Tribunal19. On the aforesaid findings arrived at by the Industrial Tribunal it had jurisdiction to make the order it did, irrespective of any purely legal question as to whether there was any contractual relation of employer and workmen between the respondent and the discharged members of the staff. The Appellants Tribunal did not displace any of the findings arrived at by the Industrial Tribunal, but approached the two questions for adjudication as abstract questions of law - which, in our view, was a fundamentally wrong approach, though the President said in one part of his judgment that an Industrial Tribunal has nothing to do with the decision of an abstract question of law. The President proceeded mainly on this basis: the services of the workmen were terminated by the old management by proper notice, and as they did not, except a few, apply for fresh appointment on the new terms and conditions, there was no contract of service, enforceable in law, between the workmen and the two managements in question. This line of reasoning overlooked two essential circumstances; one was that the notice of discharge was given by the outgoing management during the dispute and pendency of conciliation proceedings and was hit by S. 33 of the Act, and the other was that in spite of the notice all the members of the staff were allowed to continue in service till 4-1-1954. The third circumstances was that the Industrial Tribunal found that the conditions which the incoming management sought to impose were intended to discriminate between workmen and most likely to create industrial unrest. The clause in the memorandum of agreement or the sale deed which gave the respondent a discretion to employ or not employ members of the staff or to give them fresh employment was indeed found by the Appellate Tribunal to be a bona fide clause as between the vendor and purchaser; but the question before the Industrial tribunal was as to how it would operate against the workmen in the context of the industrial dispute referred to it for adjudication. In the circumstances of the present case the Industrial Tribunal found that it operated to their prejudice, and we are not satisfied that the Appellate Tribunal has given cogent reasons for going behind that finding20. There was a difference between the two members of the Appellate Tribunal as to whether the discharged members of the staff were entitled to retrenchment compensation or not from the outgoing management. In the view which we have taken, that question is no longer relevantIn the view we have taken on the facts of this case it is not necessary for us, on this occasion, to express any opinion on those questions or pronounce any opinion on the correctness of any of those decisions.