Mackinon Mackenzie Ltd vs Mackinnon Employees Union

The relevant facts are briefly stated to appreciate the rival legal contentions urged on behalf of the parties in this appeal.

The appellant-Company was engaged in shipping business from its premises at Mackinnon Building, Ballard Estate, Mumbai. The activities were divided into ship agency, shipping management, ship owning and operating, travel and tourism, clearing and forwarding, overseas recruitment and property owning and development. It had approximately 150 employees who were all workmen and members of the respondent-Union. The respondent-Union is registered under the provisions of the Trade Union Act, 1926. A letter dated 27.07.1992, purportedly a notice of retrenchment together with the statement of reasons enclosed therewith was served upon approximately 98 workmen by the appellant-Company stating that the same will be effective from closing of business on 04.08.1992. In the statement of reasons, it was stated that the appellant-Company was accumulating losses and the proprietors had taken a decision to rationalise its activities apart from the property owning and development department, a portion of the clearing and development business relating to contracts with the Government of India, Institutions such as, Central Railway and Lubrizol India Ltd. The respondent-Union who are the concerned workmen filed the complaint before the Industrial Court. Since there was a deviation from the seniority list of some workers in the clearing and forwarding departments and some of the remaining workers from the alleged closed departments of the appellant- Company were to be transferred to the aforesaid retained departments of the appellant-Company, a seniority list of all the workmen in the establishment was also allegedly put up on the notice board. However, the finding of fact recorded by the Industrial Court while answering the relevant contentious issues is that this plea taken by the appellant-Company was not proved.

Aggrieved by the said action of the appellant-Company, the concerned workmen of the respondent-Union filed a complaint before the Industrial Court at Mumbai alleging the unfair labour practices on the part of the appellant-Company in not complying with certain statutory provisions under item No. 9 of the Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (hereinafter referred to as the "MRTU & PULP Act"), in proposing to retrench the concerned workmen. It has assailed the legality and validity of the notice of retrenchment served upon the concerned workmen by the appellant-Company. The legal contentions urged by the workmen in the complaint were as follows:

Before the Industrial Court the appellant-Company has filed its counter statement denying the averments made on the alleged contraventions made by the appellant-Company under the I.D. Act, and MRTU PULP Act in issuing retrenchment notice to the concerned workmen. It has further denied the various averments made in the complaint filed by the respondent-trade Union against the appellant-Company in justification of its retrenchment of the concerned workmen on the alleged closure of the department/unit of the appellant-Company. Nine witnesses on behalf of the concerned workmen and two witnesses on behalf of the appellant-Company were examined before the Industrial Court to justify their respective claims and counter claims.

The learned senior counsel Mr. Jamshed Cama, appearing for the appellant- Company, sought to justify the action of the appellant-Company, inter alia, contending that due to severe recession in the dominant areas of the industry in which the concerned workmen were engaged and various other factors having a direct bearing on their business activities, it was found imperative for the appellant-Company to shut down some of their activities as detailed by them in their statement of reasons appended to the retrenchment notice. Further it has been stated that in the circumstances, the appellant-Company, according to their business needs had decided to let out a part of the premises housing their office on leave and licence basis to M/s. Urmila & Co. Pvt. Ltd that as the same would not be required for the respondent-workmen as the appellant-Company had contemplated the retrenchment of the concerned workmen. The said decision was also taken by the appellant-Company to further ensure availability of funds to pay the employees. Therefore, the concerned workmen were retrenched from employment and their legal dues were paid as contemplated under the provisions of Section 25F clause (b) of the I.D. Act. The retrenchment of the concerned workmen in fact came into force at the close of business on 04.08.1992 at 4:45 p.m. as per the retrenchment notice itself served upon them. Intimation of passing of the ex-parte ad interim order dated 04.08.1992 by the Industrial Court was allegedly communicated to the appellant-Company by the respondent-Union vide its letter dated 04.08.1992 itself at 5:30 p.m., by which time the possession of the premises of the appellant-Company where the retrenched workmen were employed was already handed over to three independent Companies, who had acquired leave and licence agreement with the premises of the appellant-Company on 28.07.1992. Their occupation of the premises alleged to have been deferred up to 04.08.1992 i.e. until the completion of the process of retrenchment of the concerned workmen of the respondent-Union, which process had started much earlier.

Needless to add, the Company will pay off all workmen who have not been retained, their legal terminal dues.

For the foregoing reasons, the appeal is dismissed. We affirm the impugned judgment and order of the Division Bench of the High Court. The order dated 14.08.2006 extending protection to the appellant-Company shall stand vacated. Since, the concerned workmen have been litigating the matter for the last 23 years, it would be appropriate for us to give direction to the appellant-Company to comply with the terms and conditions of the award passed by the Industrial Court by computing back-wages on the basis of revision of pay scales of the concerned workmen and other consequential monetary benefits including terminal benefits and pay the same to the workmen within six weeks from the date of receipt of the copy of this Judgment, failing which, the back-wages shall be paid with an interest at the rate of 9% per annum. The appellant-Company shall submit the compliance report for perusal of this Court. There shall be no order as to costs.