Case: ARMED FORCES EX OFFICERS MULTI SERVICES COOPERATIVE SOCIETY LTD Vs. RASHTRIYA MAZDOOR SANGH (INTUC)

relied on the testimonies of retrenched drivers, admitting to unemployment post retrenchment. He relied on the decisions of this Court in Mackinnon Mackenzie and Company Ltd v. Mackinnon Employees Union (2015) 4 SCC 544, and Workmen of Subong Tea Estate, Represented by the Indian Tea Employees Union v. Outgoing Management of Subong Tea Estate and Anr (1964) 5 SCR 602. 13. In his rejoinder, Shri C.U. Singh submitted that even as per the Statement of Claim submitted by the Respondent Union before the Tribunal, it was clear that the employees always understood their termination as retrenchment and not in course of a closure. Analysis: 14. With respect to the first submission of Shri C. U. Singh, that this is not at all a case of closure but a simple case of retrenchment, the Tribunal as well as the High Court have held that the method and manner by which the workmen were retrenched clearly demonstrates that it is virtually a closure. We have no hesitation in confirming these findings of fact. The act of terminating the services of all the drivers at the same time, coupled with the statement of the Appellant that the entire business is closed down, was sufficient to convey to the workers and the Union that the transport business had come to a standstill and that there was no scope of continuing the business any further. Further, we also concur with the findings of fact about the lack of bona fide in the Appellants offers of re-employment on new terms and conditions, and without continuity of service. It is for these reasons that the Tribunal and the High Court held that it was virtually a case of closure and correctly so. 15. The second submission of Shri C.U. Singh that the management has a right to organise its business based on economic considerations is well taken. 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 reorganising the business based on economic considerations is within an enterprises proprietary decision and retrenchment in this context must be accepted as an inevitable consequence. The answer is here itself, and pertains to the material requirement of bona fide of the decision. In the present case, the Tribunal has come to the conclusion that the entirety of business is not lost due to the strike and the retrenchment seems to have been imposed as retribution against the workmen for going on a strike. It is for this reason that the decision of this Court in the case of Parry Company (supra) will not apply to the facts of the present case. 16. The further submission of the Appellant that the Tribunal is not justified in directing continuity of service, as in the case of retrenchment followed by reemployment, the workmen are not entitled to continuity of service needs to be answered. Even here, there is no quarrel with the principle of law that reemployment of retrenched workmen does not entitle them to claim continuity of service as held in Cement Corpn. of India Ltd. v. Presiding Officer Industrial Tribunal-cum-Labour Court and Anr. (2010) 15 SCC 754, as well as the Maruti Udyog Ltd v. Ram Lal and Ors. (2005) 2 SCC 638 . However, the principle laid down in these judgments will only apply to cases where the retrenchment is bona fide. The Tribunal has held that the retrenchment of all the drivers followed by an offer of re-employment on new terms and conditions is not bona fide. 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. 17. As regards the last submission by Shri C.U. Singh, about the legality of awarding 75% back wages, it was argued before us that the workmen were obligated to prove that they were not gainfully employed after the dismissal from service. It was also submitted that they must at least plead on oath that they were unemployed. Shri C.U. Singh took us through the evidence and on the basis of statements made therein has submitted that the parties have admitted to have worked at some place or the other through the pendency of the litigation. 18. The Tribunal has considered the matter in detail and after appreciating the oral and documentary evidence, the Tribunal directed reinstatement of the employees with only 75% back wages. Whether a workman was gainfully employed or not is again a question of fact, and 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 following findings of the Tribunal are conclusive: In so far as back wages to be paid to the workers are concerned, it is a matter of record that 27 workers have stepped into the witness box. Even the President of the Second Party union is also examined. All the workers and President of the Union have consistently stated in their examination in chief that they have remained unemployed after their termination and they failed to procure alternate employment also. 19. In Deepali Gundu Surwase v. Kranti Junior Adhyapak Mahavidyalaya (supra), this Court held: 38.3 ……If the employer wants to avoid payment of full back wages, then it has to plead and also lead cogent evidence to prove that the employee/workman was gainfully employed and was getting wages equal to the wages he/she was drawing prior to the termination of service…….. (emphasis added) With respect to the obligation of the Appellant, the finding of the Tribunal is simple that: On the contrary, in the entire evidence filed by the First Party, the First Party has not brought an iota of evidence to show that all the workers were employed elsewhere and were earning for their livelihood.

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

Explanation:
0[ds]14. With respect to the first submission of Shri C. U. Singh, that this is not at all a case of closure but a simple case of retrenchment, the Tribunal as well as the High Court have held that the method and manner by which the workmen were retrenched clearly demonstrates that it is virtually a closure. We have no hesitation in confirming these findings of fact. The act of terminating the services of all the drivers at the same time, coupled with the statement of the Appellant that the entire business is closed down, was sufficient to convey to the workers and the Union that the transport business had come to a standstill and that there was no scope of continuing the business any further. Further, we also concur with the findings of fact about the lack of bona fide in the Appellants offers of re-employment on new terms and conditions, and without continuity of service. It is for these reasons that the Tribunal and the High Court held that it was virtually a case of closure and correctly so.15. The second submission of Shri C.U. Singh that the management has a right to organise its business based on economic considerations is well taken. 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 reorganising the business based on economic considerations is within an enterprises proprietary decision and retrenchment in this context must be accepted as an inevitable consequence. The answer is here itself, and pertains to the material requirement of bona fide of the decision. In the present case, the Tribunal has come to the conclusion that the entirety of business is not lost due to the strike and the retrenchment seems to have been imposed as retribution against the workmen for going on a strike. It is for this reason that the decision of this Court in the case of Parry Company (supra) will not apply to the facts of the present case.16. The further submission of the Appellant that the Tribunal is not justified in directing continuity of service, as in the case of retrenchment followed by reemployment, the workmen are not entitled to continuity of service needs to be answered. Even here, there is no quarrel with the principle of law that reemployment of retrenched workmen does not entitle them to claim continuity of service as held in Cement Corpn. of India Ltd. v. Presiding Officer Industrial Tribunal-cum-Labour Court and Anr. (2010) 15 SCC 754,  as well as the Maruti Udyog Ltd v. Ram Lal and Ors. (2005) 2 SCC 638 . However, the principle laid down in these judgments will only apply to cases where the retrenchment is bona fide. The Tribunal has held that the retrenchment of all the drivers followed by an offer of re-employment on new terms and conditions is not bona fide. 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.18. The Tribunal has considered the matter in detail and after appreciating the oral and documentary evidence, the Tribunal directed reinstatement of the employees with only 75% back wages. Whether a workman was gainfully employed or not is again a question of fact, and 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 following findings of the Tribunal are conclusive:In so far as back wages to be paid to the workers are concerned, it is a matter of record that 27 workers have stepped into the witness box. Even the President of the Second Party union is also examined. All the workers and President of the Union have consistently stated in their examination in chief that they have remained unemployed after their termination and they failed to procure alternate employment also.19. In Deepali Gundu Surwase v. Kranti Junior Adhyapak Mahavidyalaya (supra), this Court held:38.3 ……If the employer wants to avoid payment of full back wages, then it has to plead and also lead cogent evidence to prove that the employee/workman was gainfully employed and was getting wages equal to the wages he/she was drawing prior to the termination of service……..With respect to the obligation of the Appellant, the finding of the Tribunal is simple that:On the contrary, in the entire evidence filed by the First Party, the First Party has not brought an iota of evidence to show that all the workers were employed elsewhere and were earning for their livelihood.